Who Needs Advertising?

Just this week, Google announced the first TV ad for their new tablet, the Nexus 7:

Nexus 7 Commercial

This is curious timing, as several news outlets, including the LA Times and Forbes, are reporting that the Google Nexus has sold out, with even pre-orders for the next shipment of the 16GB version not available.

This scenario raises two interesting questions: How was Google able to sell millions of units of a brand new item without advertising, and why are the advertising at all?

The answer to the first question has everything to do with Google’s rivalry with Apple. This rivalry is played out in the press, social media and by consumers themselves, with brand loyalty lines being clearly drawn in the sand. Ever since the iPad was a huge success, the world has been waiting for Google’s answer, and that anticipation guaranteed massive sales. The media generated hundreds of stories about the product, anti-Apple users took to blogs and social media to declare how happy there were to have a choice in the performance tablet market (sorry, Acer and Amazon) and all of those thousands of words all acted as free advertising for the Nexus.

The second question is a little trickier, but my guess is that it has to do with keeping the cycle of anticipation going strong. If the Nexus commercials can help sustain interest in the product, but consumers are unable to get one, this can help build more excitement about the second ‘launch’ of the Nexus into stores. Also, the timing can help create articles like this one, where bloggers wonder about Google’s strategies, furthering the narrative that Google and its products are newsworthy and capture the attention of journalists and hobbyists.

The question I am posing to the class is, how many companies/products could get away this type of product launch? At what point is a company so big that no matter, its products will always sell. I think a good analogy are movie franchises, such as Batman, Marvel Superheroes, and Harry Potter. They have built in audiences (like Google), are based on material that is already widely known (like the Nexus) and can reliably sell out their opening weekends before a single review has been printed (or TV ad aired).

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6 Responses to Who Needs Advertising?

  1. Jessica Brown says:

    Hi Aaron,

    Great question – I’ve actually thought the same question before. Last semester, after studying Apple’s marketing presence and campaigns over the past three decades, my group came to the conclusion that Apple didn’t need to promote in order to sell product. The exclusivity of the product made it more desirable. Additionally, the fact that Apple has minimal to no social media presence represents the brand recognition and success.

    As for other companies…that is tricky. I think it depends on the buyer persona. For example, I know that the Nexus was huge talk in tech magazines and pubs. This for sure gave pre-sells a boost. The average person who doesn’t subscribe to these media outlets wouldn’t see the Nexus news. Another example would be Anthrologie. If you talk to most women, especially in their 20s and 30s, they adore Anthropologie (and probably think it’s too pricey). However, they don’t have a strong social media presence on purpose. Their old social media director, my friend, said they didn’t want to on purpose.

    In terms of mainstream media and products, I would say Apple and Google are the heavy hitters when it comes to pre-sales of less publicized products. Even Microsoft can’t compete with them. Microsoft is reportedly spending half a billion dollars on marketing Windows 8 (Perry, 2012). Crazy! Once again, Microsoft should take a lesson from another younger tech company.

    Reference

    Perry, D. (2012). MSFT spending half a billion on advertising for Windows 8. Retrieved on July 24, 2012 from http://www.tomshardware.co.uk/microsoft-windows-8-RTM-release-date-marketing-budget,news-39033.html

  2. Felipe Camacho says:

    Aaron,

    Thanks for an insightful post. I agree that part of what helped Google sell out the Nexus 7 is its army of brand loyalists. I’ve never owned an Apple product myself and, thanks to a friend who is an early adopter of new tech, I was introduced to Android years back. People like choice, Google understands this and Android provides it. Yet, I am not a Google hardware buyer either.

    The thought of being locked into one manufacture’s products is too constricting. I own a Motorola Droid X , and a Toshiba Thrive Tablet – each is a great device manufactured by good companies. I don’t subscribe to cable but instead opt for GoogleTV via the Logitech Revue. Though I do have to admit, I also own a Toshiba laptop running Windows 7, and Google Chrome, but on which I may soon install the latest iteration of Ubuntu.

    To answer your question, its not that a company is so big that no matter what its products will sell (i.e. iPhone’s with buggy antenna’s still sold like crazy), the issue is that people are so bought into a brand that they can’t fathom giving other brand a chance. Maybe Google loyalists are heading that way, but since the OS is open source, maybe that’s not so bad…

  3. shanecol says:

    Hi Aaron,

    Apple is an amazing company. They have not only created a following, but also began trends and (in some cases) social movements. Think Starbucks – some people believe that is a sign of professional success. I, on the other hand, think of it as social excess.

    Sometimes there are such devotees that advertising is a moot point for some companies. Apple and Google are prime examples. However, think about when Google came out with its smartphone – is it even still around? The point is, there will always be a following strong enough to abide by third party endorsements. That’s what PR is all about! Luckily for Google, that has carried them to the point where product is selling out.

    On the other hand, paid media has its benefits as well. To answer your question, Google may have found it important to advertise to show consumers that they are still going produce the Nexus, and that although it is sold out they will be back. This is a flighting marketing tool used in almost a bifurcated manner – an existential bifurcation, but still.

  4. EAlarcon says:

    Great post Aaron… and darn it!! I just bought an iPad and now looking at the Nexus it seems like I could have had a better toy. 🙁 As you can tell, I am definitely not a techie, nor a techie-trendsetter, so my loss…

    You pose a very interesting question and I agree with your initial reasons. Another consideration on why the quick sell out of the Nexus is “price”. Google was smart in pricing their tablet at a range that is affordable by many. With the Google reputation, it was a win-win situation for them. Reputation and price are key, as we have seen other tablets launched in similar price points without the same success.

    Other examples that I recall is when Target sold Missoni for a limited time, at a limited discounted price. It was not so much the loyalty for Target or Missoni that resulted in the quick sell-out, but the perfect combination of both that resulted in such great success for the retailer (and not so great news for their website).

    Brands that don’t advertise yet still are successful have a unique business model. Look at Costco and Amazon, who did some TV advertising in the beginning, but I believe does not any longer. They have something unique to offer and have owned the category from the beginning. Others may come and go, but the pioneers just keep improving their technique.

    Thanks for sharing!

    http://www.retailcustomerexperience.com/article/184615/Missoni-for-Target-line-sells-out-raises-questions
    http://www.wired.com/wired/archive/13.01/bezos.html

  5. Jesus Torres says:

    Actually, Google has been advertising the Nexus tablet rather heavily. But it is not in the way most people are familiar with. Google makes its billions from online advertising and of course they employed this channel to get the word out on their tablet. At launch, I remember seeing an ad on the Google homepage. I clicked on it and just like that, Google saved that information and used it to place more Nexus ads in the websites that I visited. The ads that I see on nytimes.com won’t be the same ads that you see on the same site. Google customizes ads on the websites that you visit based on your browsing history.

    They do have that one TV ad that you have on your post, but by that time, lots of folks would have already seen a Nexus ad online somewhere. If you’re not being stalked by a Nexus ad online, you resisted the temptation and did not click on a Google ad!

  6. msamuels says:

    Hey Aaron,

    When I was beginning MCM program, I thought it would be a good idea to have a tablet. Like a good consumer, I’d done my research, and decided the Asus Prime was the one for me. It had a better resolution screen than the iPad and more horsepower, it also could play flash. The problem was that it got such rave reviews from app designers and techies, that it was nearly impossible to find. I’m still not sure how readily available they are. But the online reviews and the buzz about the Ice Cream Sandwich OS made this a very hot item. I’m not sure how much advertising there was. I finally got one, and it’s great, but now I’m thinking about the Nexus, only because they’re hard to find. What can I say, I love the hunt 🙂

    Thanks again.