Scrabulously wrong!

July 31, 2008 at 1:53 pm | In Advertising, Economics, Intellectual Property, Internet | Leave a Comment
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The Open Source revolution is here to stay, say most internet and computer experts. The open source revolution which has spiralled from writing operating system programms like Linux to application ‘widgets’ for various we based applications is currently in vougue with most programming savvy people indulging in. The advantage of the open source revolution is volunatry sharing of user generated ‘open’ source codes for the applications which can be sold at a price if the developer so intends, but essentially is a free to be upgraged, modified  and marketed by any user if he or she is also into coding. This is a tremendous opportuity for millions of computer programmers around the world who are able to use thier coding knowledge to build better models of a basic functional tool and market it for profits.

But there are many, for lack of a better word, discrepancies in the open source revolution. Take for instance a situation when an open source program creates an application which replicates a patented real world product, service or an experience in the virtual world. What are the rules which govern this? Is it in violation of the patent rules? This is exactly what is happening in the case of Hasbro vs Scrabulous. Scrabulous, developed by two Kolkata residents, Jayant and Rajat Agarwalla is the virtual version of the hit word game Scrabble which is a patented product owned by Hasbro.

Since the game was introduced as an application in the social networking site Facebook, the game has become a hot favorite of people around the world who use the social networking sites. And also as there is advertising involved in the whole scheme of things, there is vast revenue potential also. But now, Hasbro has woken up to the fact that Scrabulous is violating their patent for the original game of Scrabble and are miffed. Hasbro has insisted that Facebook needs to stop providing its users access to the game as it is in violation of their Intellectual Property.

This has caused serious reactions against Hasbro in the social networking world. Many ardent fans of the game have voiced their dissaproval of Hasbro’s insistence of removing the game from Facebook by publicly claiming that the company is being greedy by not allowing consumers have a better product (Scrabulous).

“I have burnt my Scrabble board in protest” 

commented on irate fan.

But are Hasbro wrong in doing what they are? I think it would be vastly incorrect if the intellectual property of the company be allowed to be exploited the way it has been. The power of social networking remains in the fact that most applications which are advertising magnets are based on the popularity of the product. Scrabble is one of the most popular games of all time and its virtual personification Scrabulous has no differences from the original real world version. Hence the product is still under domain of Hasbro’s intellectual property. If Facebook and the Agarwalla brothers are benefitting from the advertising reveneues of Scrabulous, then it is in breach of the intellectual property held by Hasbro.

Although the fans of the virtual game may be miffed, it is not correct to allow the game to continue in its present form, becuase of its popularity. The only suitable arrangement that can be found is if Hasbro were to benefit from the game of Scrabble being online and the company is willing to consider such a business model. Most people beleive that it is incorrect to steal another’s ideas, but find it hard to draw a line in such cases as there has been an effort by the Agarwalla brothers in developing the software, which people beleive allows them to market it. But, one should not forget that it is the primacy of ideas that an intellectual property defends and is of paramount importance if innovation is to continue.

But, there are problems at the other end of the spectrum also. For instance, this article in The American, titled “Courting Trouble on Patents” talks about the increase in the number of low quality patents being issued due to the sheer number of patent applications that need to be processed by the US Patents and Trademark Office (USPTO). With the costs and process of revoking these low quality patents being too high and cumbersome, the article argues patents might increasingly become a pain in the neck. While this is surely true, it is also a scary thought that intellectual property is not guarded and explotation like the Scrabulous case becomes prevalent. While, the Agarwalla brothers might not have intended to voilate serious patent laws while writing their open source code for Scrabulous, this incident is defenitely an important event in the often messy, but required process of safeguarding Intellectual Property.

Update: The story is getting murkier. The Agarwalla brothers have now relaunched the Scrabulous game under the name Wordscraper on Facebook. It already has a lot of fans and is getting more users hooked on regularly! Technically, as this version has some new rules and changes the squares of Scrabble to circles, it does not fall under the patent guidelines and it is free to be marketed. I was reading Mankiw’s textbook “The Principles of Economics” today morning on the topic of Externalites and how patents safegaurd against the negative externalities of not being able to generate a profit from one’s intellectual property. It makes me wonder how this above example shows that intellectual property is subject to ever more negative externalities and innovation is under threat in the new internet powered world. Yes, this may seem counter to most discussions today that the internet is the hotbed of innovation today. But, I beleive that it comes with a cost. The internet is turning propriety into a ‘fifteen mintues of fame’ kind of situation and I beleive that this is a foreseeable threat for the future of innovation. Aptly, the tagline for the newly launched game of Wordscraper is “Don’t follow rules, make them!”. I wonder what the consequences shall arise from this!           

What is in a name?

July 29, 2008 at 3:02 pm | In Advertising, Branding, Brands, Intellectual Property, Marketing, Science | 3 Comments
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Today, I tried the new search engine which is being positioned as a competitor to Google. Its called ‘Cuil‘ and is supposed to be a word which sounds like ‘Cool’ or more so ‘Kewl’. I was disappointed.

The first thing I tried searching on Cuil was my name; ‘Anand V Rao’ and unlike Google which shows search results which lead to my blogs, Cuil came up with links about somebody’s husband who had a name like mine. I am still very much single. You can call me a narcissist that the first thing I searched for was my name and when I did not find it, found the website disappointing. But hey, I am not the only one. Others also have seem to have done the same thing and have had the same results. 

This brings me to the point I wanted to make about the importance of names and more specifically to the ‘Brand Value’ they represent. A name or a trademark is something which identifies a particular entity and is amongst the most important factors which is associated with it. It has been long discussed in scientific journals dealing with neuroscience that the brain works by forming association. Recognition or cognition is a faculty which we possess and the brain performs this function by forming associations with other memories and the process of recognition happens. Hence a name or a trademark is something which helps us humans create an association with the product, service or experience and helps us recognize it.

This is something which is very clear to the marketing community. In order for them to make a sale, it is necessary that the entity being sold is recognized and hence the requirement of a name. And since the marketing goal is to make this sale increase, it is required that the product be ‘recognized’ better than any other product. Hence the creation of brand identities. I came across this wonderful website called Brand Tags which is essentially a project which tries to find out what people associate a particular brand with. For instance, the website asks its viewers to mention what is the first thing that comes to their mind when they see the name/trademark of a brand. It then displays the results in a cloud format, with the most commonly associated words appearing big. For Ikea, the most common associations are furniture, cheap and Swedish. So Ikea as a brand has succeeded in making people associate their brand with furniture that is cheap. So unsurprisingly, around the world the best choice for people’s need for cheap furniture is satisfied by Ikea.

The power of the brand name is something which most marketing students and professionals are taught early in their careers. An interesting example of this is mentioned about the rise and fall of the brand names in the pharma industry. In an article for the WIPO (World Intellectual Property Organization) Magazine, author John Fidelino asks,

Whats in a name? Sometimes the health of the corporate balance sheet

The article is an interesting read about how the pharma industry products have moved from having names which only doctors understood (Anafranil, Ritalin) to what people can understand, thereby creating the essential ‘association to recognition’ connection with the pills. The article talks about the new and emerging trends in the way medicines are named in the post Viagra era – Viagra being one of the most successful brand names.

 

Trend 1: The Pharma 2.0 name

In lieu of creating “phashion” names, some manufacturers have returned to the scientific underpinnings of their molecules as their source for inspiration – but with a new twist. Rather than the generic-sounding, chemical type name of the past, the new names make the molecules sound provocative and rather sexy. GSK’s breast cancer treatment, Tykerb (generic name lapatinib), for example, plays off its classification as a tyrosine kinase inhibitor. Pfizer’s Sutent, used to treat certain cancers of the kidney and digestive system,encodes its own generic name, sunitinib. Their short and quick rhythms evoke a sense of power, while their unusual choice of letters cuts through the copious aspirational names. These “pharma 2.0” names do not intend to make you feel comfortable about the science; they make you appreciate the science. By embracing the molecule, they inspire confidence in the compound’s ability to address a physiological need, while by expressing the molecule unconventionally, the names represent the promise of pharmaceuticals. The pharma 2.0 style allows the industry to project a sophisticated, technology-based image, more appropriate for the innovations it offers.

Trend 2: The scientific story name

In the past, if manufacturers weren’t referencing its chemical background, they would name a product according to its indication. This would help orient people as to what they were prescribing the drug for. But the name of the drug would be a constant reminder to the patient of the affliction (e.g., Arthrotec for rheumatoid arthritis, Cancidas for candida infection, Hepsera for Hepatitis B). While past efforts to overcome stigma resulted in the aspirational name, more recent names side-step the condition and the treatment benefit altogether, focusing instead on how the product works. For example, Pfizer’s Selzentry or Celsentri (generic name maraviroc) speaks to how the drug works to block HIV from entering human cells (viz. cell sentry). Unlike the pharma 2.0 style, scientific story names are more familiar sounding. They leverage real language, but in service of expressing the drug’s mechanism.

Trend 3: The anti-pharma name

Given its battered reputation, some manufacturers have abandoned linking to the industry altogether. These companies are creating names that don’t so much seek to differentiate, as to annihilate any benchmark for comparison, and in that way subvert the credibility question. They do this primarily by co-opting naming constructs from other product categories. Novartis’ Exforge (generic names amlodipine and valsartan), for example, parallels the naming of sports utility vehicles (SUVs) to result in a brand that sounds able to tackle high blood pressure like an all-terrain vehicle can wrangle a mountain. Anesiva’s Zingo, a needle-free injection system for administering lidocaine powder, is named with a light touch that makes it sound like child’s play ­–– appropriate for a rapid local analgesic for kids. By reflecting other product categories these names telegraph emotional experiences without articulating an aspirational promise

It is very interesting to see how the pharma brand names have evolved to help conumers associate with them. I did a small survey of some Indian pharma brands to see if this was prevalent here too. An example is the case of cough syrup. The famous Benadryl is still famous today, but new brands like Koflet are also making inroads into the consumer mindset. Products like Dettol which gets its ‘ol’ from its chemical composition parachlorometaxylenol is now facing competiton from hand hygiene products like PureHands.

The name, therefore has a lot to do with the entity. On a different genre, interstingly, according to the Brand Tags website, what people associate with the word ‘Virgin’ the most is Richard Branson!

I am sure Mr. Branson would be most pleased with the success of his brand, but I am sure he would not want the brand name to cease to exist after his passing. It may be time for him to find something else people associate with the word ‘Virgin’ other than him, that is just as flamboyant as him. I wonder what or who that could be?       

Olympic Mascots…

July 24, 2008 at 1:33 pm | In Advertising, Branding | Leave a Comment
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Why do the mascots for the Olympic Games suck? Most of the the mascots for the summer Olympic games fail to impress me. As a hobby, I follow mascots for various sporting events around the world. The mascots for the 2008 Beijing Olympics are called ‘Fuwa’ – five mascots which represent traditional Chinese elements of fire, wood, water, gold and earth. But I just don’t find these five interesting or cute enough.

This mascot business is a very interesting one for the marketing and branding community. They are veritable brands of an event and can be something which people will remember long after it is over. They are also a super source of revenue, if they can be properly merchandized, riding on the frenzy around such events. But one of the most important factors which will fuel this frenzy is the ‘cuteness’ of the characherts. These characters need to ‘connect’ with people around the world. But most of the time, countries decide to make the mascots represent some deep connection with their nation’s ideaology and in the process end up creating duds. I am not saying that the mascot should not be made to represent the hosting country’s symbolism. After all it is a grest source of pride and accomplishment for the country which hosts popular international sporting event like the Olympics. But, when these mascots become rather esoteric, and something other people around the world cannot connect with (sometimes even in the people in the host country cannot easily connect with), then there is a tremendous loss of an opportunity. 

Now, not everybody shares this opinion about the Fuwa. Many designers and brand consultants in China have expressed that they are mainly aimed at kids and these will attract that demographic. But I disagree. These look just like Pokemon characters and with little differentiation the characters will not remain in the minds of these kids for too long. Apparently, the creator of the Fuwa suffered two heart attacks while creating the mascots. Also in China, people have now started associating the mascots with the natural and man made diasaters which are plaguing their country!

If you ask me, the last Olympic mascots for the games in Athens were worse. I dont even remember the girl and boy called Athena and Phevos who are kids dressed in ancient greek costumes. The Sydney olympics were better with Olly, Syd and Millie all of whom are still relatively famous. Especially Olly the bird. My favorite is the 1984 Los Angeles mascot Sam the Eagle who also has a lot of charisma to this day!

It Lands, Creates a buzz…. then Disappears!

July 24, 2008 at 10:09 am | In Advertising | Leave a Comment
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I have been doing a study on the outdoor advertsing industry in India recently as a part of a consultancy assignment at work, and one of the catch phrases which people from this industry use to describe their business is,

In outdoor, the medium is the message!

Interestingly today, I came across this article about a 7500 sqaure feet ad which has been commissioned by Chanel. It is a whole mobile art pavilion which looks something like this…

Designed by a London based designer, this futuristic looking building has been by Chanel and is expected to house the art work of 15 new designers. All the displays though will be inspired by Chanel’s quilted style handbag which was issued first in 1955!

And Voila! amongst the many descriptions of the building, one of them goes as follows,

The most important piece of art is the container itself!  

Stumble Upon a pot of Gold!

June 19, 2008 at 2:46 pm | In Advertising, Branding, Internet, Marketing | 1 Comment
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I have recently installed the now famous Stumbleupon toolbar on my internet explorer, and man! is it addictive! All I have to do is indicate what my preferences are and voila! I can be directed to very interesting websites I never knew existed! This works very well when you have sometime to kill; you have finished reading all the updates on the regular sites you usually visit and don’t know what to find on the internet. (Ofcourse, Stumbleupon is not a substitute for going outdoors or reading a book, when one has time to kill; but it defenitely makes sense when its pouring cats and dogs, especially in Mumbai, where one dares not venture far from home, during the rainy season)  

Stumbleupon is a very powerful tool according to me. Google currently makes money by putting up contextual advertising on the website based on one’s search queries. The things one searches for on the net are varied and the reasons for the search are also different. And this is the main problem preventing Google from becoming the ‘BEST EVER’ advertising medium. Google knows what you are searching for, so they place ads for products/services/experiences which they think you might be interested in based on your search. But because most people who are searching may not be interested in purchasing this product/service/experience and only want to know somethings about it, the advertiser may not get ‘conversions’ while he does get visibility. But, as the marketing dollar on the internet is cheaper than other mediums, the ROI is the achievement of higher visibilty.  Over time, and if you use gmail, Google gets to know what kind of business you are in, based on the email conversations you have and are able to send you more targeted advertising. This vastly helps the advertisers; if you were to send an email to your friend about her new ipod asking her what price she bought it for, google will be able to put up advertisements of various ipod deals available on the internet.

This is typically an example of the depth of a person’s interest phenomenon. If you were to visit a search for ‘fountain pens’ on google, you might be able to see the Wikipedia link first, followed by other links to makers of fountain pens. Many people are typically using the search engine to ‘research’ the product. If so, they would visit the wikipedia entry on fountain pens and from there be led to other links. They might find out about the top brands and make a note of this and later purchase this from a stationery store in their city. By not visiting the sites of fountain pen sellers on the internet, the advertiser’s dollar spent on the google ad does not have a direct ROI. Sure, the brand of the advertiser may have been visible, but the internet is not the best medium to make one aware of the brand.

Imagine now, if Google actually knew your preferneces and an advertisement of the fountain pen were to come on a website where one is reading up on fountain pens. This I beleive would pique the interest of the surfer. If the person is internet savvy, this might be a better platform for realizing a purchase; if not, the surfer may go and buy the product from a brick and mortar store, but the marketing association which triggered the purchase could be linked to the above contextual ad. 

This is the exact functionality StumbleUpon can make use of. If Google can tie up with StumbleUpon and based on the inclination of the particular stumbler, whose preferneces have been identified gathered upon through analysis of the kind of sites he prefers to ‘StumbleUpon’, deliver contextual advertising on that site, it would be a great step forward towards targeted advertising. It’s Google Adsense, with an intermediary preference filter called StumbleUpon. The algorithm for Adsense depends on the content of the website – not the preference of the surfer visiting the website. The magic of targeted advertising would be phenomenal if the algorithm for Adsense actually captured the preferences of the surfer!

StumbleUpon’s current revenue model is selling its subsriber’s occasional stumbles to a website for a fee. If a website wants to ’StumbledUpon’ a certain times in a day, they have to pay StumbleUpon a fee and the website will deliver on this numbers. If the google tie up can be worked out, another revenue model could be on the number of users delivered to a particular website through the StumbleUpon toolbar. If the nuances of this can be worked out, it would defenitely be a move towards mass customized advertisements!    

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