cost
Apple vs Microsoft vs Sony [Graphs]
The core of any long-standing technology company is research and development. Here’s how Apple, Microsoft and Sony’s last decade of spending stack up.
Note that the first graph shows research and development as a percentage of revenue (to scale the spending by company, since revenues differ so greatly). This next graphic can help you conceptualize the revenue and R&D gap:
A Few Interesting Notes:
• Now, Microsoft spends about 17% of their revenue on R&D. Sony spends about 8%. Apple spends less than 4%.
• If you were to break down the amount of R&D that goes purely to physical (non-software) products sold by Apple and Sony, Sony would spend about $11.5 million per product while Apple would spend about $78.5 million per product. (Of course, that’s rolling the cost OS X and iPhone OS development into Macs and the iPhone, which could be seen as inflating their per product spending.)
• Microsoft just spends a lot of money in R&D, period—about $9 billion last year in generalized research (that often doesn’t lead to specific products). In terms of percentage growth over the last decade, Apple’s R&D has grown the most (nearly quadrupled) while Sony’s has grown the least (not quite doubled).
In light of these bare numbers, is it any surprise that Sony is struggling the most to capture the hearts and minds of a public hungry for gadgets?
Sources:
Apple
Apple Public Relations
Apple Investor Relations
Apple Insider 2004
Apple Insider 2005
Apple Insider 2006
Apple Insider 2008
Mac Observer
Microsoft
Microsoft Investor Relations
Sony
Sony Investor Relations
Research by David Chaid
The iPad Costs Apple As Little As $229.35 to Build
The $500 16GB, Wi-Fi only iPad costs Apple less than half that to build, according to a recent component breakdown from iSuppli. And for the 64GB 3G iPad, Apple clears nearly $500 in profit. Here’s how it breaks down:
Apple iPad Estimated Bill-of-Materials and Manufacturing Cost Analysis:
This will no doubt be updated once iSuppli and others are able to do a teardown of an actual device, but those estimated profit margins are pretty stunning, particularly on the higher-end models. iSuppli also points out that the 32GB versions of the iPad only cost $30 more to make than their 16GB counterparts, yet retail for $100 more—a good indication that that’s where they expect the sweet spot to be in the market.
Goes a long way to explaining why Apple’s so willing to be flexible on the price, no?[iSuppli]
Facebook is going down – pageviews, average stay, pages per visit – why?
From the Compete charts below, it is clear that Facebook is seeing a decline in pageviews, average stay, and pages per visit. But why?
I know that I have reduced the time I spend on Facebook and I have also reduced the number of messages and other social actions as well. And I have deleted virtually all of my personal and family photos and will not upload any more. These may be the first signs of a waning of Facebook due to a number of factors.
I can’t get my stuff back out
For example, Facebook has stated that it will not participate in OpenSocial because they do not want people to be able to export their content, conversations, photos, etc, out of Facebook and use on another social network. I am concerned that I will not be able to retrieve or back up content which I believe is mine. I like to have control over my family photos, conversations with friends, etc. I am willing to accept as a “cost” of using the Facebook system the fact that they know who my friends are. But I am less willing or unwilling to continue putting my content where I cannot get it back, in its entirety. (Google Docs, for example, just launched a feature where you can back up everything back out of Google Docs into Microsoft Office formats).
Ads in the stream, erosion of trust
A second issue mentioned in a previous post is the increase in advertising on Facebook and also the more unscrupulous practice of injecting ads “into the stream” — ads masquerading as status updates. These are harmful to the overall trust built up in the community and I have un-friended quite a few people whose accounts were clearly used to promote events, products, etc.
Ad-effectiveness sucks
From a prior post – http://bit.ly/EhiW9 – Facebook advertising metric are absolutely abysmal. They keep trying to sell advertisers on the hundreds of billions of pageviews they throw off. But advertisers are getting smarter and more and more of them will buy ads on a cost-per-click basis (instead of CPM, cost per thousand impressions basis). This means that the ad revenues that Facebook enjoyed from gross INefficiencies will be decimated.
Ad-supported photo books
Need physical copies of some great shots, but you’re a bit too lazy to order and pay for them? HotPrints mails you free 16-page photo books, with shots pulled from Facebook, if you don’t mind some non-intrusive paper ads.
In this case, non-intrusive means the advertisements aren’t watermarked or otherwise touching your actual photos. They’re inserted between the pages, and can be pulled out, kind of like magazine subscription cards. You’d also have to be comfortable with HotPrints using “contextual” data from Facebook to target some ads at you. That means the album style you choose, the content of your profile, and region information from your Facebook account are used to target the ads, but the company claims that no identifying information is given out to its sponsoring partners. You can read more about HotPrints’ do’s and don’ts at their privacy policy.
If you’re cool with that at the cost of free, even free shipping, HotPrints’ Facebook app makes it fairly easy to pull in tagged photos of yourself or any Facebook contacts for a quickie album, with a limit of one per month. It’s a free service, requires a Facebook account (and app authorization) to use.
Two perfectly executed viral marketing programs in the SAME day – #bestbuy #jetblue #all-you-can-jet
Perfectly executed viral marketing program – BestBuy Samsung HDTV pricing “mistake”: 2 million google search results and 361k+ blog results in about 12 hours – ZERO COST.
#jetblue #all-you-can-jet
31 million search results and about 10 million blog posts in 7 hours
original @Jetblue tweet that started it all
Related:
Samsung 52 inch HDTV $9.99 at BestBuy – purchase receipt below (6:21a eastern time August 12, 2009)
Buy Link at the bottom of the post
Click for product page: Samsung – 52″ Class / 1080p / 120Hz / LCD HDTV LN52A650 SKU: 8749287
Order is still good as of 12:23 pm EST August 12, 2009.
BestBuy knows digital and social media. CMO Barry Judge tells it like it is.
Related:
http://abcnews.go.com/Business/story?id=8311580&page=1
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/12/AR2009081202660.html
http://adage.com/article?article_id=138469
http://www.nbcwashington.com/around-town/shopping/Best-Buy-Bummer-999-HDTVs-an-Error-53043522.html
http://blogs.zdnet.com/gadgetreviews/?p=6697
http://www.cnn.com/2009/US/08/13/bestbuy.mistake/index.html
http://www.myfoxdc.com/dpp/news/081209_best_buy_offers_999_hdtv_by_mistake
http://www.kktv.com/home/headlines/53067682.html
http://www.wftv.com/countybycounty/20371068/detail.html
http://www.shoppingblog.com/blog/8120912
http://www.cepro.com/article/best_buy_accidentally_lists_1700_hdtv_for_10/
How to manufacture a viral video sensation and make viral profits – Post 2 of 2
Related: The JKWeddingDance video was real; the viral effect was MANUFACTURED – Post 1 of 2
It was originally discovered and reported that while the jkwedding dance video was real, the viral effect was manufactured by Chris Brown and Sony’s marketing and public relations poeple.
Chris Brown and Sony PR made an unconventional, but really really good, decision to promote a home video on YouTube to drive massive increase in sales and also polish Chris Brown’s tarnished image in the process.
See ReadWriteWeb’s initial article — http://bit.ly/KA3HI
The video of JKWeddingDance was funny and it used Chris Brown’s “Forever” song. Instead of suing them and issuing a take-down order, Sony’s PR department promoted it instead and added an overlay ad to purchase the single from Amazon MP3 or iTunes.
http://www.youtube.com/watch?v=4-94JhLEiN0
This case reads like a how-to guide to create a successful viral video that drives sales. They (Chris Brown) did everything right.
By promoting the video (instead of suing to get it taken down), they got the video past the first tipping point of X thousand views, after which the video remained on the front page of YouTube which gets about 30 million unique users in a day. Most people don’t look through the ocean of videos on YouTube. Instead, they start with the ones listed on the front page as “most popular, top favorited, or most viewed.”
Then real people continued to amplify the snowball effect — social amplification — and passed along to their friends. This added a viral halo on top of the original promoted views. The viral halo is low to no cost to the advertiser so any profits derived from it is pure viral profit.
For a step-by-step guide to creating a viral video, see
http://go-digital.net/blog/2009/08/how-to-make-a-viral-video-a-5-step-guide
Viral hits can be manufactured. A group which has done this successfully and reproducibly is ImprovEverywhere (see their YouTube channel below). They have MANY YouTube videos which have hundreds of thousands of views, and their latest hit — No Pants Subway Ride – achieved 8 million views in 3 months.
http://www.youtube.com/user/ImprovEverywhere
How Megan Fox got the equivalent of $50 million of Superbowl ad spending – for FREE! — the marketing of Megan Fox
godaddy superbowl ad spending led to sharp spikes in search volume every February for the last 5 years straight. Other advertisers who spent on Superbowl ads have similar lift in search volume from the TV advertising.
Source: Google Insights for Search
If you believe that lift in search volume indicates interest and intent and if you consider that each 30-second ad cost $3 million in 2009 (WSJ: NBC Super Bowl Ads to Cost $3 Million) and assuming GoDaddy’s ad did not air more than once, they spent $3 million to get their ad in front of a TON of people and to get people’s attention. Those people who saw the ad and were interested enough to take action went online and searched for more information by typing godaddy into search (see lift in search volume during February of each year) .
If we assume that it took $3 million to generate a certain lift in search we can use multiples to calculate the media dollar equivalent of any lift in search — for example, if godaddy spent $3 million to get X lift in search, then a 2X lift in search would have required $6 million of media (in a very very simplified back of the envelope estimate; it usually would cost more than 2x to get that lift) — i.e. it would have cost at least $6 million in superbowl ad media dollars to achieve a 2X lift in search volume.
So, if we now compare search volume on megan fox side by side with godaddy search volume, we will see that in Feb 2009 Megan Fox was indexing at 21 while godaddy was indexing at 12 (this is normalized to a scale of 0 – 100). So search volume on megan fox indicates she was getting the equivalent value to $6 million of super bowl media ad spend – FOR FREE — roughly 2X the search volume of godaddy in the same time period.
At the peak of her search volume in June 2009 (corresponding to the release of Transformers 2: The Revenge of the Fallen), she was indexing at 100 and godaddy at 7. This is 8x the index of godaddy of 12 during the Feb 2009 time period when they were airing their superbowl ads. This implies that she was getting the search volume that would have required the equivalent to a $24 million super bowl ad spend to achieve — again for FREE!
If you want to research futher, use the following link to bring up Google Insights for Search to see relative search volume
http://www.google.com/insights/search/#q=godaddy%2Cmegan%20fox&cmpt=q
In February 2008, Megan Fox indexed at 8 and GoDaddy at 8. In 2008, Superbowl ad spots cost only $2.7 million — so she had the equivalent search volume as a paid advertising spending $2.7 million on a Superbowl ad.
In 2007, Godaddy indexed at 6 during Feb 2007 Superbowl. Megan Fox indexed at 43 during the July release of the first Transformers movie — this is an 8X multiple on Superbowl ads that cost $2.6 million — or $21 million
So the perfect “product placement” of Megan Fox in the two Transformers movies garnered her nearly $50 million worth of advertising based on search volume equivalency. This does not even take into account her sustained and increasing search volume, compared to most advertisers’ search volumes which drop right back down to pre-ad levels once the ad is finished airing.
Lift in search volume indicates that customers …
… saw the ad, recalled it, and thought it relevant enough at the time to make the effort to take action — search for more information about it (beyond the tidbit of info contained in the 30 second ad, print ad, radio spot, or banner ad).
But traditional ads are still very very costly and inefficient due to the extremely large media cost.
For example, at the extreme cost of a Superbowl ad, the following advertisers were able to drive fleeting (short-lived) lift in search volume: godaddy, etrade, sobe lifewater, dennys.
related: http://go-digital.net/blog/2009/03/lift-in-search-due-to-paid-tv-advertising/
The Perfect Babe – Megan Fox (pics)
Megan Fox – The Perfect Babe Product Placement
No, this post is not about Megan Fox. Well, yeah it is. But it’s about the MARKETING of Megan Fox.
Megan Fox has been around in films and TV since 2001 (see filmography below). But it wasn’t until 2007 when she starred in the first Transformers movie that she burst on the scene and became an overnight mega celebrity, especially online (see Google Search Volume chart). If you look at Ford’s search volume during the same period, there was NO lift in search that was detectable — there probably was some lift, but it is simply not detectable.
So Megan Fox went from very very little awareness to not only massive awareness, but also massive demand — people remembered her name and even took action (performed searches on her name). If some product placements would have had only 10% of the success of the “megan fox” product placement, they might actually justify the immense cost a bit better (millions of dollars paid by the advertiser to the movie makers to place products into the storyline of the movie).
And why is she “perfect,” in the marketing sense, of course? Her search volume has not only sustained but also continued to grow. She was not a flash in the pan that went away after the advertising/media dollars stopped or the public interest died off (see the snuggie and etrade search volume charts below).
transformer girl, second girl in transformers, other girl in transformers – Isabel Lucas
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