Herbert Hoover

The must-have toy this holiday season is the electronic hamster. I think the marketing push was as simple and unique as the toy itself.

Zhu Zhu Pets, a line of five furry interactive hamsters (pronounced Zoo Zoo) have been selling so briskly they have gone missing from retailers’ shelves for weeks. The little hamsters are so popular, Toys ‘R’ Us is using them as a Black Friday marketing centerpiece. Every Toys ‘R’ Us will have 100 of the furry bots for sale at midnight when the stores open for Black Friday shopping, with a limit of one per customer.

Walmart and Target aren’t even bothering to advertise it in their circulars anymore as the shelves empty as soon as the little critters arrive. And the play pets’ $8 price tag has risen accordingly. On eBay and Amazon, just one pet is now going for $60 to $100, if you can even find them at all.

The toy’s manufacturer, Cepia, isn’t marketing the product anymore either. A Cepia-created TV spot featuring the frenzied furballs and their Habitrail-like accessories, ran in late summer and early fall on children’s cable channels such as Nickelodeon and the Disney XD, generating a lot of buzz before it was halted in mid-October. Beacon Media Group placed the media. Zhu Zhu’s PR and promotions agency, the Martz Agency, Phoenix, is pushing back other marketing plans, such as a planned fourth-quarter promotional party at Toys ‘R’ Us in New York’s Times Square, until the first quarter of 2010.

“It doesn’t make sense to continue to build demand right now,” said Carrie Martz, CEO of the Martz Agency. “They’ve gotten to where they want to be, the top of the toy lists.”

Still it was marketing that helped Zhu Zhus get there. The Martz Agency helmed an event and promotion-driven campaign that began as a one-city test market in Phoenix in July. The agency mounted a strong PR push and partnered with the Arizona Diamondbacks major-league baseball team for a series of events including toy drop-offs at children’s hospitals and a night at the ballpark with giveaways and trials, and even convinced a local dance troupe to create a routine for “Zhu Zhu Flow,” a song created by a St. Louis rapper.

Influencer parties were key. Maria Bailey, CEO of BSM Media, joined the effort by putting on 40 “Mom Maven” influencer parties. The agency, which specializes in marketing to moms, created Zhu Zhu parties in a box with 12 hamsters and habitrails, featuring recipes (for Hamster Crunch) and games. Many of those moms were also bloggers who did their own giveaways online. To date, more than 300 in-home parties have been conducted for Zhu Zhu Pets.

The result? The Phoenix Toys ‘R’ Us sold out of Zhu Zhus in less than two weeks.

The Martz Agency then took the campaign nationwide, partnering with sports teams and hospitals in 25 markets, while BSM Media threw more than 300 hamster parties across the country, and hooked up with 10 city zoos for “Boo in the Zoo” parties. According to Ms. Bailey, 25% of all moms who attended the parties said they have told 21 or more moms about the Zhu Zhu Pets. And 80% of the moms who attended said they have told at least six other mothers about the hamsters, she said.

The latest marketing, and likely the last for now, was a Twitter party thrown by Ms. Bailey for mothers and kids together. Held from 7- 8 p.m. on Nov. 11, it generated more than 9,000 tweets and catapulted the #zhuzhupets hashtag into the trending topics top 10 list within 20 minutes, where it remained for an hour.

“It’s very unusual. I can’t remember when something took off like this from a company that is so under the radar,” said Cliff Annicelli, editor in chief of Playthings magazine, although he noted that Cepia founder Russell Hornsby does have a long history in the toy business.

And while events and PR helped Zhu Zhu’s case, TV advertising drove a lot of early recognition and interest. “Marketing is important for toys, and TV advertising is still the most important way to get your toy in front of kids,” Mr. Annicelli said. “For a toy like this based on entertainment, TV is still best.”

And oh yes: The hamsters got their own iPhone app on Tuesday. The $1.99 hamster game is officially sanctioned by the toy’s maker Cepia, and it likely won’t be long after school’s out until it begins to creep up the chart-topper lists.

How Ashton Kutcher is pioneering a new kind of media business, bridging Hollywood, technology, and Madison Avenue. Really? Who would have thought I would be grabbing pearls of wisdom fro m the star of Punk’d but I found some interesting insights.

His new company Katalyst HQ is a Web-based video serial that puts the staff of Kutcher’s production company, Katalyst, through a loosely scripted, hopefully funny parody of its workday. The current 16-week “season” is sponsored by Hot Pockets, the savory pastry item whose creators want us to “eat freely,” unencumbered by a knife and fork.

The program is a collaboration between Katalyst; Slide, a Web company founded by Max Levchin of PayPal fame; advertising titan Publicis Groupe; and Nestlé, which owns Hot Pockets. It has been a huge hit, with millions of reposts of the videos on Facebook, each one reaching an average of 65 friends. What a diverse group.

“There is nothing really like this out there,” says Mike Niethammer, Nestlé’s group marketing manager.

The Katalyst HQ series illuminates what Kutcher’s production company wants to become: not just a home for his television and movie projects but also a go-to source for brands looking to deploy what’s called “influencer marketing,” a squishy hybrid of entertainment content, advertising, and online conversation that finds its audience via video, animation, Twitter, blogs, texts, and mobile. “Entertainment, really, is a dying industry,” says Kutcher. “We’re a balanced social-media studio, with revenue streams from multiple sources” — film, TV, and now digital. “For the brand stuff, we’re not replacing ad agencies but working with everyone to provide content and the monetization strategies to succeed on the Web.”

Kutcher, 31, is not exactly the image of a business visionary. He’s still best known for his eight seasons as Michael Kelso, the pretty-boy lunkhead from That ’70s Show, and as the executor of cringe-worthy celebrity pranks on the hit MTV show Punk’d. (Not to mention his marriage to Demi Moore.)

But his future, Kutcher insists, will be all about business. He intends to become the first next-generation media mogul, using his own brand as a springboard. “Punk’d is part of who he is,” says Sarah Ross, Katalyst’s director of new media. “We’re using his brand as a syndication system.”

If this all seems far-fetched, hang in there. Mask off, Kutcher holds forth nonstop on his multi-platform plans. He talks of Web trending, content pirating, and the fact that Twitter has yet to make any money. “If we in this industry don’t figure something out, we’re going to go the way of the music industry and be cannibalized by the Web,” says Kutcher. “It’s really a war to make money.”

It’s not just talk. Some 3.9 million people follow Kutcher on Twitter (@aplusk), and he has nearly 3.3 million Facebook fans. Those numbers have helped attract corporate clients beyond Nestlé — including Pepsi and Kellogg — and supporters such as Oprah, Larry King, and former News Corp. No. 2 Peter Chernin.

Kutcher and his partner, Jason Goldberg, spent the better part of two years courting the wizards of Silicon Valley, converting them from teachers and skeptics to friends and allies. For all their pranks, Katalyst’s digital division can claim one thing most other social-media businesses can’t: profitability.

Even if Kutcher turns out to be more style than substance and Katalyst doesn’t become the Next Big Thing, Kutcher’s experiment points toward a new model for the evolving media business that connects Hollywood, tech, and Madison Avenue. No kidding.

Kutcher in making the case for his business takes jabs at the companies that have fueled him in the social space, specifically Twitter and Facebook. And he’s pretty funny about it, even if he’s also sorta serious.

“When I have a conversation with someone and they say, ‘I’m not worried about monetization yet,’ that scares the shit out of me,” he says poking fun at social Web companies that run up their user base without regard for how they’re going to make money. “I’m part of an industry that is struggling daily. Daily. And I’m always worried about the numbers.”

“You cannibalize this business…a profit-positive business that trades at a decent multiple, and you’re just going to put people out of work. And these folks are counting on just figuring it out. And if they don’t, we’re fucked! That’s not okay.”

“I can sell a more-targeted individual based on the content that you want — blah blah,” referring to Facebook, “Fucking awesome, dude. Go do it. And make a ton of money off of that, and I’ll make programming for that all day. But nobody is actually doing that.”

Kutcher on ad agencies.

“For years, the ad business has been happy to have a completely ambiguous accounting system that they’ve been monetizing off,” he says, referring to Nielsen ratings. “Now that the Web offers a slightly more granular dollars-and-cents audience-acquisition metric — now they’re going to get completely granular about how they’re getting money?”

What the Katalyst team is planning, he says, is simple: Make entertaining stuff, give it to people where they already are, let them have some fun with it, and mix in brand messaging. And because of the viral nature of the Web, each new consumer is cheaper to win than the last one. “The algorithm is awesome,” Kutcher says. “Katalyst is a merger of three industries.”

“A piece of us is connected to ad agencies. Because we get the complex overlay of the social Web, we know how to engage an audience and how to make entertainment for the social Web. And we know how to gain and activate and retain an audience. So we create social networks for brands.”

This is the way things are going, says Netscape founder Marc Andreessen. “Katalyst is way out on the leading edge in terms of thinking this stuff through.” Katalyst steps into the gap left by ad agencies that gave up on the Web after the dotcom bust. “Banner ads aren’t going to cut it,” he says. “And media companies have not been creative or aggressive about making products designed for engagement marketing. Now that’s changing, giving brand advertisers a new way and reason to buy.”

Garrit Schmidt, who leads the experience design and client-strategy practice for digital marketing firm Razorfish, agrees. “People are discovering that experience matters more than traditional advertising now,” he notes. “Using celebrity as a personal sphere of influence is an interesting [distribution] model.” Of course it’s risky, Schmidt adds, because the more commercialized personalities become, the less influence they have. Kutcher acknowledges this: “I am consciously risking my career on the edge of what’s too much information. Eventually, we’ll open up this platform to others, just like Facebook and developers. For this to work, it has to be open.”

Get ready for Starbucks Holiday 2.0. The brand is going big in social media this year, having learned that its consumers want to participate in a variety of ways. So Starbucks is pulling back from itsThanksgiving TV buys of the past two years to focus on where its customers already spend time online and drive them into stores.

Starbucks is spreading the love around, advertising on websites from NYTimes.com to Meebo; partnering with Pandora to offer branded holiday playlists; and encouraging participation in social and owned media to get consumers in the holiday spirit.

The chain is continuing its partnership with Red, launched last Thanksgiving, by offering a free “All You Need Is Love” CD, with tracks from U2, John Legend and the Dave Matthews Band, when consumers spend $15. Additionally, Starbucks will give $1 to fight AIDS in Africa.

There are also a variety of holiday-themed “Red” products for which Starbucks will also make the $1 donation with a customer purchase. This represents a stepped-up version of last year’s offer, which was a five-cent donation made when consumers bought a holiday beverage such as a peppermint mocha.


Starbucks said it has learned that different people want to connect in different ways, so Starbucks is offering a variety of touch-points. Of their 5 million [fans] on Facebook, not everyone is going to want the same thing.

For instance, last year Starbucks encouraged consumers to stop in, buy a holiday beverage, take pictures of themselves inside Project Red’s logo parentheses, and upload their pictures to a Red holiday microsite. To make it easier, this year Starbucks is hosting a Flickr page where consumers can upload pictures of themselves with their holiday paraphernalia. They can also do so on Facebook, where fans can also send their friends red Starbucks cups.

The Starbucks shutterbugs are among the chain’s biggest fans, valuable evangelists for the brand who educate friends and family about what’s new at the chain.

For music lovers, Starbucks is partnering with Pandora in the hope that consumers will be thinking about Starbucks while listening to music, and perhaps will be more likely to pop by for a gingerbread latte. The branded playlist on the music site is designed to get consumers into the store to spend $15 and get the “Love” CD. Starbucks is paying Pandora for ad placement.

Consider the state of affairs when viewers tuned into the Super Bowl in February: Banks had failed, a stimulus package still hadn’t been announced, and unemployment was surging toward 8%, up from 4.8% the year before. Escapism was the order of the day, and most advertisers played right along, with brands like Coke and Pepsi offering saccharine happy-happy joy-joy visions that jarred with the bleak reality.

There was one advertiser, however, that didn’t.

In the third quarter, in an otherwise standard-issue cars-rolling-through-landscape spot, a voice-over brought into the light of day something that ranks up there with death and erectile dysfunction as something people don’t want to talk about. “Now finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit.”

With that bold stroke, Hyundai — yes, Hyundai — an automaker not historically known for fearless marketing, began in earnest a frontal assault on a recession that was not dampening consumer enthusiasm but drowning it. But while its Assurance Program received heavy support, it wasn’t the sole route of advance. Hyundai also took an upmarket route, with its very successful efforts to push the Genesis, its entry into the premium-car market that was also pushed during the Super Bowl as well as during the game’s female-skewing equivalent, the Academy Awards, where the carmaker bought an eye-popping nine spots.

Engaging with both the broken dreams and the intact ones through high-profile ad buys that garnered plenty of positive press was in sharp contrast to the tail-between-the-legs mode of Hyundai’s rivals, many of whom had slashed budgets and retreated into retail-focused advertising. An example of the opportunism: Those nine Oscar spots — purchased when GM, then on the verge of bankruptcy, bailed out of the show. For Hyundai, the overall results were clear: Sales and market share were up, and its brand image overhauled.

Hyundai’s market share jumped to 4.3% in the first ten months of 2009 from 3.1% in the same year-ago period. In September, while the industry overall suffered a 22% sales drop in a post-Cash for Clunkers hangover, Hyundai managed to increase its new-vehicle tally by 27% to 31,511 units.

Before the recession, people never would have been caught dead in a Hyundai and might have worried about what their neighbors would think are now are very comfortable because the brand has been elevated.

Americans were apparently so wowed by the ads and press exposure of the Assurance program that consideration for new Hyundai vehicles jumped to 59% in the first two months of the year, CNW Marketing Research found.

Summit Entertainment is partnering with AT&T to build excitement for the Nov. 20 release of the second film installment of its Twilight Saga franchise.

AT&T will host advance screenings of the film sequel “The Twilight Saga: New Moon”—including a special cast-member appearance—in Atlanta, Chicago and Dallas on Nov. 19. In addition, photo and video content, a mobile trivia game from RealArcade Mobile and ringtones are currently available via AT&T Share on Facebook and wireless handsets from AT&T. 

“AT&T has a rich history of aligning our brand with other industry leaders—from corporate America to sports to entertainment,” said Chris Schembri, vice president of media services at AT&T, Dallas, TX. “In addition, we are continuously looking for ways to better connect our consumers with our greatest asset—our network—in ways that are meaningful, exciting and easily accessible to them.

“We feel aligning ourselves with the Twilight Saga franchise allows us to accomplish both of these missions,” he said. “One of the great things about the Twilight Saga is that it appeals to a variety of target demographics for AT&T; tweens and teens, college students, young adults and beyond.” 

“In addition, it draws in both women and men with its unique storylines, action and romance themes.”

Through Nov. 12, moviegoers will have the opportunity to win one pair of tickets to an advance screening of “The Twilight Saga: New Moon” in Atlanta, Chicago or Dallas on Thurs., Nov. 19 at 9:30 p.m., which will include a special appearance and question-and-answer session by a cast member from the film.

David Roberts, a clinical-psychology student at the University of North Carolina at Chapel Hill, had a summer job teaching social skills to a group of schizophrenic patients at a state hospital.

He had a particularly unresponsive group (“Many patients are flattened by their meds,” he explained recently) and tried in vain to interest them in role-playing everyday social situations, offering the patients rewards of points and tokens in return for not giving in to their urges to wander around, respond to phantom voices, or otherwise become disruptive—a traditional system of behavioral therapy.

During a break one day, Roberts, watching television in the hospital’s lounge, noticed that a change had come over his patients, who generally seemed immune to basic social signals. “They were laughing at the ironic commercials,” he said. “They were laughing at ‘Friends.’ They were laughing at all the places I was laughing.” Many showed a fluency in the kinds of social communication that Roberts had been struggling to teach them in therapy.

“We watched a scene from ‘Monk’ where Tony Shalhoub won’t shake hands with anyone for fear of germs, and walks away awkwardly. I asked a man who’d been an inpatient for ten years, and who was generally blank, what had happened, and he shook his head and gave me a wry grin. Unspoken communication is huge for someone like that.”

So Roberts began showing TV clips during therapy sessions. Soon he had narrowed his selections down to one show: television’s purest expression of social dysfunction, “Curb Your Enthusiasm.” Roberts considers Larry David to be the perfect proxy for a schizophrenic person. “On his way into his dentist’s office, he holds the door open for a woman, and, as a result, she’s seen first,” he said. “He stews, he fumes, he explodes. He’s breaking the social rules that folks with schizophrenia often break.”

He went on, “Or the one where Ted Danson and Mary Steenburgen invite Larry and his wife to a concert: the night arrives, they don’t call, Larry assumes they don’t like him, then it turns out he got the date wrong. It’s a classic example of a major social cognitive error—jumping to conclusions—that schizophrenic patients are prone to.” As the patients watched David flub situation after situation, they laughed, and they willingly discussed with Roberts how they might behave in the same circumstances. “That bald man made a mountain out of a molehill!” one woman called out during a session.

Roberts and his U.N.C. adviser, David Penn, began to formalize these findings, mapping out a teachable technique called Social Cognition and Interaction Training. They tested SCIT in four preliminary studies, and in post-training evaluations patients showed significant improvement in deciphering social situations. The technique has attracted attention—practitioners in Germany, Portugal, and China are now watching TV with their patients—and this fall Penn and a third researcher are conducting a randomized control trial funded by the National Institute of Mental Health.

Larry David said that he hadn’t realized how deeply the awkwardness on his show would affect people. “It just deals with how you’re supposed to behave,” he said. “A lot of the time, it’s just me expressing myself freely. I knew that my own mental health was problematic, but should I be worried? I mean, I blow up, too! Is this something undiagnosed? Do I need to see a clinical psychologist?” 

Americans may choose to consume video on the “best screen available,” yet traditional TV remains the screen of choice. The recent results of Nielsen’s Three Screen Report a quarterly analysis from Nielsen’s Anywhere Anytime Media

The measurement initiative (A2/M2) shows that the average American watches approximately 153 hours of TV every month at home, a 1.2% increase from last year. In addition, the 131 million Americans who watch video on the Internet watch on average about 3 hours of video online each month at home and work. The 13.4 million Americans who watch video on mobile phones watch on average about 3 ½ hours of mobile video each month.

In addition, Nielsen data shows that consumers’ time with TV, Internet and Mobile video continues to increase across the board. Online video grew 13% in Q1 2009, driven by both strong brand marketing and large media events including the Presidential inauguration, the Super Bowl and March Madness. With broadband levels increasing in the U.S., online video audiences will continue to grow as consumers begin to upgrade their PCs to support increased video consumption.

Mobile video viewing has grown a significant 52% from the previous year, up to 13.4 million Americans. Much of this growth continues to come from increased mobile content and the rise of the mobile web as a viewing option.

Out of all different age groups, 18-24 year olds show signs of watching DVR and online video the same amount of time timeshifting 5 hrs, 47 minutes per month, and watching video online 5 hrs, 3 minutes each month.

Perhaps the merging of web and TV will begin to drive the growth of true interactive TV with Google leading the way.