Another entry barrier gone? (The Sequel)

Back in February I suggested that an element of the “cost of advertising/building a brand” barrier to entry has been eroded considerably by the increasing ability to film and post advertisements online (and then hope like hell for some viral takeup thereof).

I used an example from my cousin‘s Rentoid startup to demonstrate how a home video camera, a few brave mates, a funny idea and a Youtube might be equally as effective as engaging a creative agency and a film crew.

Well, technology is racing ahead. The Rentoid lads have moved very hi-tech on a similar budget (i.e. pretty much free), with this Pixar-like gem:

As Steve explains, this is all done via Xtranormal (i.e. some folks who’ve done all the hard work for you).

Clearly technology is racing ahead here for budding entrepreneurs seeking an audience.

Of course, making the ad is only one piece of the puzzle. Reaching an audience is harder. The February ad looks like it had 1200 views. One in March got almost 2000. Will this vid be the breakthrough? I guess if its close to costless there isn’t much downside risk.

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Is advertising enough?

The power of marketing is a hotly debated topic among strategic management scholars (and, of course, out there in the real world). It remains highly contentious whether efforts to persuade consumers of the newness and uniqueness of your offerings can overpower the reality of the underlying offering.

An interesting case in point is the current US campaign by Nissan for their Cube vehicle. As the New York Times article explores, the firm is going out on a limb and trying to present the car as a “mobile device”. They have built a campaign around a range of familiar jargon from the online world – “search engine, storage capacity” etc – in the hope that this will appeal to a different audience and differentiate this product in what might well be the harshest buying climate for cars in a century.

Here’s some of the promo material.

It strikes me that in the end this is just a slightly quirky and boxy car with no particularly innovative features. Surely consumers want more than an oh-so-cool tagline?

Another entry barrier gone?

My post about the music business argued that technological change has reduced barriers to entry considerably. In that instance, it was a raft of new technologies that made making and distributing music so much easier. These changes rendered the previously important music labels somewhat redundant.

One further aspect of this was the scope for musicians to market themselves, as they could build their image and communicate their message through extremely low cost means (such as Myspace and Youtube).

Such gains can be seen beyond the music world. Firms can now also bypass the dominant mass-media (and its associated businesses such as ad agencies and media buyers), and attempt to communicate their message directly to consumers via the same sort of sites as the musos.

Here’s an example from web-rental business Rentoid (yes, the one run by my cousin):

It’s low budget but has a chance to go viral and build greater brand awareness than a boring print ad or a billboard (both of which would be much more expensive).

What do you think? Does it communicate an effective message?

And is this a viable strategy for many firms?

Is this a significant cultural difference?

Here is an old advertisement from HSBC (Hong-Kong Shanghai Banking Corporation – a bank formerly headquartered in Hong Kong, now officially British), that highlights a cultural difference between the British and Chinese (please watch it all the way – it is actually in English).

I asked my students to comment on this video (as to its accuracy, relevance etc), especially as we have a considerable number of students of Chinese background. Here are some of the comments:

“…it is a Chinese custom, although it has slowly been changing (but this highlights the importance of getting up-to-date cultural information!).”

“…the people in the advertisment have more dramatic expressions and the food should be even better than that”

“from a Chinese perspective, eating up everything in your plate means you may want more… So, people always leave a little in their plate, especially when dinning out. However, as some students memtioned above, it is changing…maybe because of globalization?

But I find it interesting that our neigbours – Japan and Korea, have the custom of eating up everything in the plates to be polite, which is similar to the western one.”

By the way, there are least three other videos in this series: