Thoughts on Epic Super Bowl Ads

Every year, there’s one Super Bowl commercial that seem larger than the rest. Amidst the foolishness associated with selling beer and chips, there’s usually one ad that is unapologetically dramatic and downright cinematic. They cost tens of millions of dollars and will likely air just once. They’re not commercials – they’re short films. And that’s exactly how the companies want us to perceive them.

Given the pomp and spectacle that is the Super Bowl, it’s remarkable that these ads manage to captivate us at all – and yet they do, sometimes for an entire two minutes. They do so by being the opposite of the event that they interrupt. They are eerie, powerful and almost impossible to ignore – like a calm during a storm.

In 1984, Apple put out what is perhaps the greatest television ad ever.

This is the ad that changed it all and made the Super Bowl the event to showcase your brand to the country (fun fact: the commercial was directed by Ridley Scott). Continue reading “Thoughts on Epic Super Bowl Ads”

The Smartest/Creepiest Car Insurance Idea (For Now)

It even looks like R2D2
The man is watching. But don’t worry, he wants to save you money.

We all hate insurance companies – about as much as we hate banks, airlines and cell phone service providers. Car insurance companies, however, have a new way to save you money, but it takes us one step closer to 1984.

Progressive offers its customers a device called Snapshot that monitors the number of miles driven, and how fast the car is driven. The reason is simple – people who drive more, and people who drive faster are involved in more accidents. These folks are the reason that everyone else’s insurance premiums are higher than they would otherwise be.

Insurance companies already gather mountains of information on our age, gender, geography, marital status, income and credit score (and probably a lot of things we aren’t aware of) in order to determine who is a greater risk and thereby deserving of a higher premium. But these call into questions issues of sexism, ageism and classism. Charging more to those who drive more makes a lot more sense morally and financially.

Check out this graph from The Atlantic showing the relationship between miles driven and crashes/damages/injuries.

It doesn’t get much clearer than that.

And sure, Progressive, and its competitors who offer similar but less advanced products, have intentionally left out a GPS tracking systems in the monitoring device. They rightly assumed customers would not use the product with Big Brother knowing so much. But it’s only a matter of time before we cross that line. Once the system is in place, it will only be a matter of adding (or merely activating) one feature.

Surely there are lives and money to be saved if companies could track our every motion. Certainly there are some roads that are more dangerous than others; people who drive on the safe ones who want to save. How about breathalyzers as standard equipment in order to save money on insurance?

What other information can we use to draw correlations? Level of education? Criminal record? Gun ownership? Body mass index? Religion? Race? That last one is prohibited under the Constitution, but when you make a list of all the factors, you see how ridiculous it might seem to (1) exclude it, or (2) even consider all the other bits of information in the first place.

As technology improves we are going to be confronted with more of these dilemmas over privacy and common sense approaches to saving money and lives. I’m not sure where to draw the line. In fact, I would install such a device in my car. The way I see it, the war with the machines/robots/cyborgs/mutants/whatever is coming one way or another. The only question is whether it will be my grandchildren or their grandchildren who will wage that battle.

Willingness to Pay

Companies target poor people. Companies target rich people. In the end, we’re all targeted.

When Heathcliff Huxtable, played by Bill Cosby, donned a modest outfit on his trip to the car dealer, he was attempting to come off as a frugal working class Joe (instead of the wealthy doctor that he was). It may have all been in vain though – he would have been better off sending a white friend to negotiate, regardless of his attire.

Sometimes, retailers do not equate wealth with willingness to pay. Another way of looking at it is that the perceived intelligence/power/respectability of the consumer can affect a retailer’s willingness to exploit/overcharge. A study published in the American Economic Review in 1995 revealed that when using the same scripted bargaining tactics at car dealerships, White men were quoted significantly lower prices than women (of either race) or Black men. Continue reading “Willingness to Pay”

Mac Users Beware, Your Wealth Is No Secret

Mac users are wealthier than their PC counterparts, and companies are eager to exploit that.

The Wall Street Journal recently reported that people who use Mac computers are willing to pay up to 30% more than PC users on Orbitz.com. This has led Orbitz to declare that it will show Mac users higher prices.

At first, this seems ridiculous and unfair – the same exact product being offered at different prices. But we shouldn’t be surprised – it’s hardly different than traditional ways of exploiting regional price differentials and targeting certain markets with inflated prices. The only difference is that now, companies use a sort of virtual geography to organize consumers according to wealth and willingness to pay. The type of computer you use is just the tip of the iceberg. Companies are trying to track your every move online – the magazines you read, the products you buy, the clubs you belong to – all in order to determine what sort of consumer you are and how much you are willing to pay for whatever they are selling. Continue reading “Mac Users Beware, Your Wealth Is No Secret”

Hyundai – from Ashy to Classy

American manufacturing has been in decline for decades. The rise of Hyundai is indicative of who has been succeeding.

For those of you who lived in the US during the 80s and 90s, you may recall the embarrassment that went along with driving the a Hyundai. If not, allow me to refresh your memory.

  1. How do you make a Hyundai go faster? A towtruck.
  2. What’s on pages 4-5 of the Hyundai owner’s manual? A bus schedule.

Even praise of the vehicle highlighted its affordability rather than quality. $5,000 was cheap, even in 1986.

A lot has changed since then. Hyundai was able to replicate the success of Japanese car makers decades earlier. When Toyota, Honda and Nissan began exporting cars to the US in large number in the post WW2 period, they too were ridiculed for being small, weak and cheap. Now, there is more or less a consensus that the Japanese make better cars than Americans. This is not to say that American consumers suddenly decided to change their minds and prefer foreign cars. Rather, the foreign cars got better, and foreign manufacturers learned a lot more about American consumer mentality.

This is the dream of most manufacturers in emerging markets – gain a foothold in rich countries with cheap alternatives and gradually improve quality and marketing until you can offer a better product than the domestic competition. It took the Japanese a couple of generations to overcome the initial stigma. It took Hyundai less than two decades. Hyundai (along with its partner Kia) is currently the 4th largest automobile manufacturer in the world, and the fastest growing.

20 years ago, nobody would have guessed that a Hyundai would soon look like this.
The question for me now is, which improved first, vehicle quality or marketing? If better marketing leads to better sales, then that profit can be invested in better quality. But then again, can you sell lemons with good commercials? The truth probably lies somewhere in the middle.  Either way, Hyundai has enough money to regularly invest in Superbowl ads (which now cost about $3 million for 30 seconds) that focus on performance rather than affordability.

At first glance, this might not seem significant – there was a company that wasn’t that good, and then it became good. So what? Does the Hyundai experience signify a larger trend? Yes – especially among Korean companies.

Samsung is now the largest IT company in the world in terms of revenue – not bad for a company that worked mostly in ship-building and construction a few decades ago. LG is even more similar to Hyundai in that it entered the US markets with cheap consumer electronics (remember Goldstar?) and invested heavily in R&D and marketing. On the list of largest IT companies by revenue, LG is currently just behind Intel.

This does not spell doom for the American economy. The rise of knowledge industries is real, and even Detroit has witnessed a remarkable turnaround in the past couple of years. But companies like Hyundai, as indicative of the Korean economy, will continue to emerge. Fareed Zakaria said it best when describing his book, The Post-American World, as being “not about the decline of America but rather about the rise of everyone else”.

In 2009, the Hyundai Genesis was named the North American Car of the Year at the North American International Auto Show in Detroit. Earlier this year, the Hyundai Elantra was given the same honor for 2012. It won’t be long before Hyundai joins in on the chorus of mockery directed at Chinese and Indian cars when they start entering the US market.