It was like watching an era of sports history being erased. In early December, construction workers sawed through the multiple layers of drywall and metal studs separating a row of skyboxes at the Seattle Mariners’ Safeco Field. They tore up the suites’ beech-hardwood floors and carted away their oriental rugs and leather furniture. By the end of the week, the eight skyboxes were gone.
In a reversal that strikes at a cornerstone of pro-sports finances — and of the way corporate America entertains — teams around the country are ripping out luxury suites. These perches have been used to justify billions of dollars in stadium construction over the past two decades. But in many cities, they are losing luster with surprising speed, partly the result of factors that couldn’t have predicted five or 10 years ago, from changes in tax laws to scandal-driven reforms on corporate entertaining.
“At GM, you can’t even buy them a cup of coffee anymore,” says Lin Cummins, the marketing chief at automotive supplier Arvin Meritor in Troy, Mich, which has let the leases expire for its suites in four different sports.
Category: Advertising
Toyota Memogate?
These issues pale in comparison to one problem that could make or break Toyota’s North American operations: their relationship with their hourly workers. In a confidential memo that accidentally ended up in workers’ hands, Seiichi Sudo, president of Engineering and Manufacturing in North America, discussed the cost of American labor and the steps they need to take to control those costs.
The memo, which was inadvertently stored on a shared computer drive, states the US auto industry pays some of the highest manufacturing wages in the world. It compares American wages to those in France and Japan (50 percent higher) and Mexico (500 percent higher). They project their American labor costs will increase by $900m over the next four years.
Ed Wallace on the upcoming truck wars.
“Use the Web, Luke” – Presidential Candidates Embrace the Web
In choosing the Internet to announce she intends to run for the presidency in 2008, Sen. Hillary Rodham Clinton bowed to the burgeoning political power of the medium and offered a preview of how she hopes to harness it to her purposes.
In declaring “I’m in” the White House race in a video clip on her new campaign website, HillaryClinton.com, the New York Democrat did considerably more than simply appear before the cameras; she invited supporters to join an almost Oprah Winfrey-like session of give and take.
“Let’s talk. Let’s chat. Let’s start a dialogue about your ideas and mine…. ” she told viewers.”With a little help from modern technology, I’ll be holding live online video chats … starting Monday.”
By doing this, Clinton signaled her intention of using the Internet to shore up one of her chief political weak points, what independent analyst Charlie Cook called the caricature of her as “this shrill, raving, partisan, liberal lunatic.”
Hilary’s video is here. Take a look through the window – I wonder when it was shot? Sam Brownback announced on the web as well.
Charles Franklin looks at the polls.
The Death of General Interest Magazines?
Of course, there are those who would argue that in a society that seems to have no general interest (other than, say, Paris Hilton and the Super Bowl) there is no room or need for a general interest magazine. But Mr. Stengel said he will not be imprisoned by the tyranny of big numbers in making changes at Time.
“I think it is a false choice to say that something that is mass has to be dumbed-down.” he said. “We want to be accessible, but we want our readers to know that we understand they are smart.”
TSA’s Latest: Sponsored X-Ray Bins
The US Transportation Security Administration (TSA) is launching a one-year pilot programme to allow companies to place advertisements in bins at passenger screening checkpoints at “select” US airports in return for equipment donations.
The effort follows a 3-month test programme at Los Angeles International Airport (LAX) security checkpoints that started in July.
TSA is looking for commercial advertising companies who will team with an airport to provide divestiture bins (the plastic bins used to transport passenger carry-on items through the X-ray machine); divestiture and composure tables; and bin return carts free-of-charge to the TSA. In return, the companies will be allowed to place airport-approved ads “on the bottom of the inside of the bins,” says a TSA spokeswoman. Airports partnered with ad companies will ultimately be required to screen the materials for “offensive, obtrusive, political or controversial” content, she adds.
Not a bad idea, actually. How about a free bottle of water with the ad?
The Creation of American Girl’s 2007 Girl of the Year – Nikki
Christina Binkley visits Middleton’s American Girl (a unit of Mattel):
A little more than a year ago, executives at the dollmaker American Girl sat down to undertake a high-stakes marketing mission: cramming everything the company deems uplifting and authentic about American girls into a single plastic and cloth figure. The goal: to create a character so compelling that parents will pay $86 for an 18-inch doll and a paperback book.
Working with a trove of customer feedback culled from its magazine, Web and book-publishing empire, the company determined that the typical girl these days is dependable, athletic and loves animals. She is also completely overscheduled and stressed out. She skis like a demon, rides horses, trains guide dogs, plans school parties, washes the dishes, battles popularity crises and helps her little brother with his math homework.
The improbable result is Nicki Fleming, the company’s 2007 Girl of the Year — an annual event in which the Mattel Inc. unit releases, on Jan. 1, a new doll meant to capture the current state of girlhood. Nicki’s dog Sprocket, together with training treats, a collar and leash, sells for $24. Her horse Jackson with Western saddle costs $62; his tack box, curry brush and carrots are $34.
Mattel’s (Jill Barrad was CEO at the time) acquisition of Pleasant Rowland’s American Girl for some $700M lead the way to the creation of Madison’s Overture Center. Former Oscar Meyer CEO Bob Eckert currently runs Mattel.
20 Business Ideas & The VC’s with Cash
Michael Copeland & Susanna Hamner:
The result is this list of 20 tantalizing business ideas, ranging from a host of new websites and applications to next-generation power sources and a luxury housing development. This isn’t small-time thinking, either: These investors -which include some of Silicon Valley’s most successful VCs as well as serial entrepreneurs like Steve Case and Howard Schultz are backing their ideas with a collective $100 million in funding to the entrepreneurs who can get them off the ground.
Wal-Mart Culture/Marketing Clash
Two interesting articles on the identity conflict underway (perhaps being resolved?) at Wal-Mart:
- Michael Barbaro & Stuart Elliott:
Yesterday, in a surprising rebuke, Wal-Mart overturned Ms. Roehm’s choice to replace the company’s longtime advertising agencies — a decision that puts $580 million worth of marketing up for grabs again, two months after the original search process ended.
Her departure has roiled Madison Avenue and sent several major agencies scrambling to dust off their marketing plans for the nation’s largest retailer.
At the heart of the controversy, everyone agreed, is a culture clash. Ms. Roehm, a 35-year-old rising star who won acclaim in advertising circles for her work in the automobile industry, was never at home within the painstakingly modest by-the-books culture of Wal-Mart.
- Michael Barbaro & Stuart Elliott:
t was the kind of bold advertising campaign that Wal-Mart executives agreed was needed to attract style-hungry consumers: a series of commercials featuring two sisters — one a regular Wal-Mart shopper, the other not — trying to redecorate their homes.
In commercials set to run throughout this holiday season, the sisters were to discover that Wal-Mart offers a lot more than low prices.
But in July, as gasoline prices spiked, senior executives abruptly scrapped plans for the so-called sisters campaign, sending a marketing team led by Julie Roehm scrambling to create a replacement, according to people involved in the process. The reason was that the ads did not focus enough on low prices.
Yahoo’s Peanut Butter Manifesto
It will be interesting to see how Terry Semel reacts to Brad Garlinghouse’s “peanut butter manifesto,” which was essentially open letter accusing Terry of incompetence. Garlinghouse took pains to note that Yahoo’s problems come “straight from the top.” He also obviously either leaked the memo himself or knew that it would be leaked (little difference). Regardless of what happens, Yahoo shareholders should thank him.
A Closer Look at Plunging Circulation
As was widely reported, the six-month circulation numbers for U.S. newspapers released earlier this week carried plenty of bad news: an industry-wide tumble year-to-year of 2.8% daily and 3.4% on Sunday. There were much deeper losses in big metro markets like Boston, Los Angeles and Miami.
As grim as those numbers are, a deeper look into the Audit Bureau of Circulations (ABC) reports and into some online data released by the Newspaper Association of America (NAA), makes the overall economic picture even a little bleaker.
True to their word, most companies and individual papers continue to burn so-called “junk” circulation, such as the category called “other paid” as well as third-party or bulk sales, all of it of little value to advertisers. That would support the idea that the business is pruning numbers, but improving the quality of its circulation.
…
Take the six largest papers of Lee Enterprises (Lee owns half of Capitol Newspapers), the best circulation performer among public companies. Together they achieved a highly respectable daily loss of just 0.3%. However those same papers lost 25,000 circulation among those paying 50 percent or greater of the full price of the paper, a drop of 4.1%. At the same time, it added 13,500 in the 25 to 50 percent category, a 43.9% increase. That means the papers had significant losses among subscribers paying a higher percentage of the full price while adding readers who paid more steeply discounted rate