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U2 Goes iPod

Joyce Schwarz
U2 Goes iPod Joyce Schwarz

Yesterday, at Apple's special press event in San Jose, California, Irish rock band U2 unveiled its much-rumored, custom iPod, as well as its co-branding and content-bundling deal with Apple Computer. Today, the event is the talk of the town in Hollywood media circles.

This high profile joint venture between the band and the technology firm is music to the ears of many marketers who believe that co-branding is an increasingly valuable tool in their promotional arsenal online and off. 

The deal was kept hush-hush to add to its anticipation. Monday, a call to Pamela Bennett, Apple’s PR executive in charge of iPod and Portables, could not confirm Tuesday’s announcement in advance. “I don’t know when I’ll have more info,” Bennett told me. She did affirm an invite was sent out to the press. According to one online Web report, the invitation stated: "Steve Jobs, Bono and The Edge invite you to a special event." Both Bono and The Edge, along with their band's song “Vertigo,” are featured in an Apple commercial currently airing nationally in the U.S. A quick check on eBay.com shows that at least one seller is already hawking the U2 iPod, dubbed the “Bono-pod” by fans in an online auction set to close in two days. That seller does note that the U2 iPod is not set for delivery until late November.

What’s fascinating about the U2 iPod deal is that the custom devices are part of a larger agreement between the band and Apple. According to Forbes.com reports, Apple will have exclusive rights to sell all songs from the new album Vertigo online through its iTunes Music Store for at least the first few weeks following the release. Forbes reporter Matthew Miller explains that U2 and Interscope will split a standard royalty for each song downloaded (about 0.60 per download) plus an upfront licensing fee. In return, the band shot that Vertigo commercial, which is now in heavy rotation on television. No surprise that Vertigo is also topping iTunes' download charts since its launch three weeks ago. It’s the kind of deal that hits all the right notes for Hollywood music and video producers who yearn for new content revenue streams in a landscape where piracy and illegal downloading dominate headlines all too often.

What device manufacturer wouldn’t love to introduce a brand-extension with the advance fanfare this Apple/U2 deal is making? For Interscope’s CD promo budget the co-bundling deal combined with free national commercials, an advance online window and seemingly unlimited PR may just add up to the ultimate media multiplier.

But it takes more than two to tango in the new media marketplace. On Monday, SiliconValley.com, a trade pub, reported that tech companies' love affair with U2 is about to expand into a “ménage a Trios” as Intel is about to jump on board with a $20 million sponsorship deal with U2 -- supposedly beating out international package delivery company DSL for the band’s top underwriting slot. Reports say that the Intel sponsorship is just part of that firm’s effort to extend its “Intel Inside” brand into consumer electronics markets. To outsiders, the co-branding and co-bundling efforts demonstrate that consumer electronics are key to Silicon Valley’s future. 

What do these firms get for those big bucks? A lot, according to insiders who know that U2 can be a valuable ally to Intel’s brand building as well as a critical part of the health of Apple Computer. (Some say it may only be a matter of time before Apple drops the word “computer” from its lexicon because of the popularity of its other devices.) During Apple’s fiscal fourth quarter, iPods accounted for $537 million in revenue or 23 percent of the company’s $2.35 billion in sales. While iPod revenue grew 344 percent over the same period a year ago, sales of Apple’s iMac computer line fell 23 percent to $216 million. At the same time, Apple’s experience at the forefront of the handheld revolution may just be a bellwether for other computer manufacturer’s who aren’t listening to music and video fans who demand media-to-go. 

For the past month, fans and analysts like Gene Munster of Piper Jeffrey forecasted that Apple would show off either a new color-screen 60-gigabyte iPod or an iPod Mini that can hold more than the current model’s 1,000 songs. Bloggers prayed that Apple would see the light and unveil the Holy Grail -- a much-anticipated addition of video to the mix. “What’s made the iPod a home run is the music,” Munster has been quoted as saying. By spring ’05 other device leaders including HP, Creative Labs and Archos are expected to be pushing video-anywhere. One wonders if Apple has the right stuff to continue to lead the parade.

Co-branding deals like these can be an asset in nearly all aspects of marketing from creating initial awareness to building loyalty. And when you combine deals like these anticipated from two industry powerhouses with content bundling, you may just power 21st Century revenue streams that few studios and labels could anticipate during the Napster fray of the 90s.

Tomorrow: The pros and cons of this type of co-branded deal.

Author Joyce Schwarz is a marketing, branding and sponsorship consultant whose firm JCOM is located in Marina Del Rey, California. She’s been covering media in Hollywood and Silicon Valley since 1990.

Poo seems like a good a place to begin. In America, Charmin sells itself with bears who rue the shards of paper left on their bottoms when they use an inferior brand. 

But the U.K. is apparently full of dirty birdies:

Would an American be offended if this British ad had gotten major play here? Well, I point to the existence of this device as proof that we don't even want to touch TP, much less watch a video about it:

Uh huh.

Millions of Americans would laugh at the U.K. ad. But generally speaking, it probably violates mainstream American mores. Naturally, mainstream mores are only relevant to mainstream targets. More-niche brands may be able to violate them and actually benefit. But in the U.S., I submit that you need to be very careful with the poop jokes.

Let's move on to race. In other countries, it appears that race is less of a prickly subject in marketing messages. Witness: In the U.K., Pringles developed a digital game called Nevashut, in which the user could manipulate the behaviors of a Pakistani convenience store owner in the same way people played with Subservient Chicken.

It's tough to see a major brand doing this in the U.S. Yes, yes, in America we have Apu, the convenience store proprietor on the Simpsons -- but he's not used to sell potato chips over here.

Apu and his business were, however, used to sell convenience store giant 7-Eleven as part of its tie-in with the release of "The Simpsons Movie." As part of the promotion, a number of 7-Elevens were transformed into Kwik-E-Marts

Although there was some public outcry, the overall reaction was positive -- so perhaps race can be handled with sufficient finesse in the U.S. However, truth be told, 7-Eleven was really making fun of convenience stores -- not Apu.

If we broaden the discussion to nationalism, it becomes apparent that digital is making the task of appealing to different cultures more difficult. Powerful words and imagery get around. If they are culturally charged, sparks fly.

Consider the challenges Absolut had when it ran this print ad in Mexico.

Right-wing bloggers across the U.S. decried the ad as anti-American, generating an internet storm that led to an Absolut apology. Twenty years ago, only a few Americans would have been aware of the execution. Now, what's out there in one country is essentially out there for the entire globe.

Marriage and parenthood tend also to be topics where rigid rules apply in the U.S. We love our partners and kids and don't find disloyalty to our brood funny or acceptable. This spot for an Italian laundry detergent would have a host of issues if it ran in the U.S.:

Race. Female rejection of her husband. Adultery. The list goes on. In the U.S., women can grumble about their husbands and be smarter than them (as long as they don't lord it over them), but reject them? Unh-uh.

Similarly, parenthood is fairly sacrosanct in our culture. Imagine trying to run this ad on CBS:

Parents wishing they didn't have children. Antisocial behavior. The closest thing I can remember seeing on air in the U.S. was this spot from office products giant Staples.


Quite a different tone, eh?

What about objectification of men in marketing messages? It's pretty uncommon here. I asked a sampling of women if they could remember ads aimed at women where men were there solely as eye candy. They came up with four: Abercrombie and Fitch, I Can't Believe It's Not Butter, Brawny paper towels, and a Diet Coke ad starring a shirtless window washer.

We'll start with Diet Coke. The ads they are referring to, in which women ogle a construction worker, came out in 1994. I'll leave to you to decide if that makes beefcake a pervasive American ad theme.

Of course, the current online Abercrombie gallery is certainly an example of objectification of men.

As for I can't Believe It's Not Butter, they were referring to a long running association with Fabio. If Fabio content is still available from the brand, I couldn't find it.

And the Brawny paper towel guy -- well, he used to be livin' large on packages and ads for the brand. But it appears that they are playing him down lately:

So clearly there are scattered examples of male exploitation in U.S. advertising, but it is far less welcome here than abroad. Stuff like this doesn't run here often:

Or this one:

Can you think of exceptions to my POV? Perhaps. But you get the idea.

Moving on from men, does the manner in which women are portrayed vary by country? Well, there are some similarities. I would imagine that the following ad parody, from the U.K., would get laughs in many places around the world.

But in other countries, sexuality is used in many marketing situations that are less common in the U.S. How about this European ad from Microsoft?:

What's interesting about that ad is that it is (in my view) minimally exploitive. It's about sex and connection, not T&A. We don't really do sex here without the T&A component. And we can find a lot of excuses for T&A, whether it's in selling a new sandwich or even, believe it or not, kids' meals.

I am not at all suggesting that sexual messages are less common in the U.S. than abroad. Girls Gone Wild is an American invention. And let's not even get into America's deplorable love of sexualized underaged teen girl singers, as evidenced by the bared Miley Cyrus photos that appeared in Vanity Fair (and the uproar that followed).

Another example: This campaign to sell domain/hosting services (huh?):

But in the U.S., it seems to be all or nothing. Marketing tends to be wholesome or prurient, with little in between. Nothing like this runs in the U.S.:

Going beyond the differences between U.S. campaigns and those launched abroad, it's useful to consider the way digital in general is changing the way in which we market through sex.

Targeting and the fragmented nature of the web have changed the amount of overt sexual imagery delivered by brands to Americans. The Axe brand, for example, does a great deal online that would not be welcome on U.S. TV. Through targeting, the brand can concentrate its efforts on the right eyeballs.

A big reason for Axe's success is digital because the brand can do things online that are not appropriate for a broader audience.

Another example of how the web changed the rules: The Levi's Unbutton your Beast application that let the user deliver messages to friends that made them unbutton a man's pants to receive them.

An app clearly not aimed at the same audience as Levi's 501 would be the value-oriented Signature line sold to American moms through mass merchandisers:

Up until now, we've mainly discussed marketing tactics used abroad that just wouldn't fly in the U.S. But it goes the other way, too. Several European friends of mine are struck by the amount of patriotic imagery in American messages. Budweiser is king in this sort of advertising:

I am told that brands in other countries lay off this sort of messaging. Except around big sporting events:

Digital is breaking down national barriers, so it makes sense to consider whether it will homogenize our senses of humor and decorum. Certainly there are examples of campaigns that have global relevance based upon universal hopes.

Dove's campaign is a wonderful example. While I would imagine that the GRPs supporting this initiative are low in Riyadh, Saudi Arabia, it works practically everywhere else:

At the same time, a recognition of the cultural differences in different markets is essential to creating effective marketing messages. And digital is and will remain a double-edged sword.

Jim Nichols is senior partner at Catalyst: SF.

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