Hits & Misses
(Business 2.0) – [HIT] Desperate marketing. When your network's in last place, using on-air promos is a surefire way to keep it there, since you'll only reach your own ever-shrinking ranks of loyal viewers. So ABC wisely decided to market Desperate Housewives like a consumer product, even going so far as to print the show's tagline, "Everybody has a little dirty laundry," on a million dry-cleaning bags. The result: 21.6 million people tuned in to watch the pilot, making it the highest-rated new show of the season and ABC's best debut since 1996. The network quickly doubled ad rates to $300,000 per 30-second spot.
[MISS] Half the calories, none of the revenue. The history of midcalorie soft drinks bubbles with failure. But Coca-Cola and PepsiCo both thought they could change that by seizing on the low-carb trend, spending $75 million on ads that touted C2 and Pepsi Edge as having half the carbs of regular soda. Too bad marketers at the pop giants neglected to actually read the work of Drs. Atkins and Agatston, wherein they might have learned that low-carb dieters loathe sugar in any quantity. By October, sales of the new brands totaled just 0.7 percent of soft drinks sold at supermarkets.
[HIT] Speed sells. Why do computer companies spend millions in pursuit of speed records? Because you just can't beat the halo effect that comes from making the fastest hardware the world has ever seen. For proof, look to Silicon Graphics, which laid claim to the title with its Project Columbia—a 10,240-processor, Linux-based supercomputer that recently reached a top speed of nearly 43 teraflops, handily beating its two closest rivals, IBM's Blue Gene (36 teraflops) and NEC's Earth Simulator (35 teraflops). True to form, sales of SGI's Altix systems, which use the same components as Project Columbia, are quadruple those of the same period last year.
[MISS] Timing is everything. Howard Stern's move to Sirius Satellite Radio gave a widely noted boost to the pay-radio provider's prospects. But the move was salt in the wound to Agere, which makes the chips for Sirius's radios. In April, Sirius dumped Agere in favor of STMicroelectronics, citing the latter's lower costs and better technology. Though Agere's contract with Sirius runs through mid-2005, analysts say the company will miss out on as much as $180 million in sales if Stern listeners actually start subscribing to Sirius in early 2006.
[MISS] Gathering-dust-at-the-Toys-R-Us-in-Malibu Barbie. She's driving zippy new wheels. She's sporting a deep, dark tan. She even dumped Ken for an Aussie boy toy named Blaine. But no matter what the folks at Mattel have done to ratchet up interest in their 45-year-old doll, the kids just aren't buying it. U.S. sales of Barbie dolls plummeted 26 percent in the most recent quarter—a big factor in the company's $14 million drop in net income. And though Mattel CEO Robert Eckert is blaming sluggish consumer spending, a more likely culprit is Barbie's new playground rival, Bratz. The three-year-old line of dolls from MGA Entertainment has already become the top seller in Britain and has seen its worldwide sales rise more than 20 percent since 2003.
[HIT] Rookie of the year. Challenging eBay at its own game isn't the easiest path to success. But if you insist on starting an online auction business, it's hard to imagine doing it any better than the recent launch by Overstock.com. Overstock quickly became a player in the auction world when it landed the listing for the ball that Barry Bonds smacked for his 700th home run, which sold for $804,129 on Oct. 27. The coup led to an immediate 30 percent spike in traffic to the site and, more important, an estimated $1 million worth of free advertising in the form of media mentions.