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April 15, 2008

Ad:Tech SF Keynote: This is Not Your Father’s Kodak

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Good morning from San Francisco. It’s 8:45am and I’m in place and ready to start this marathon live blogging session. There’s some crazy, oh, I’m gonna go with African chanting/drum music going on. It’s catchy.

First up is our opening keynote with Jeffrey Hayzlett from Kodak. He’ll be talking about how the Internet forced Kodak to change not just their market, but their actual company. This should be really good.

Drew Ianni, Ad:Tech’s chairman starts us off. He’s reminding us all that it’s tax day. I feel smug, mine were done in February. [When don’t you feel smug? — Lisa] Ad:Tech had 14,000 pre-registered attendees this year. This is their ten/eleven year anniversary. He asks for a show of hands on first time attendees, it’s fully half the room. The first show was in 1996 in New Orleans.

There are podcasts available for download on the site. Go to it, folks.

Ad:tech is going for global domination. He said it, not me. They’re hosting eleven or twelve events around the world now.

We get a history lesson on the way things were 10 years ago. Among the highlights, Yahoo went for their IPO, APPL was at $16 a share, Zuckerberg was a freshman in high school and Google.com registered their domain name.

Online advertising is going to grow to roughly $50 billion by 2012. There won’t be maturation of the industry, more just waves of consolidation and mini business-cycles.

The mobile revolution isn’t ready yet, in his opinion. There’s not a critical mass.

He thinks that Yahoo is about eyeballs and valley culture that that’s what “one of the big suitors” doesn’t understand. [coughMicrosoftcough] From his perspective, they need to sit down for coffee, not throw threats around.

By applause: More people think that Yahoo will sell to someone else, fewer think to Microsoft and like four people think Yahoo will stay independent. Ouch.

“At the end of the day we should just listen to the clients.” I’m not going to give you context on that one. Just do it, okay?

The Next Big Thing: Realignment of the organization to execute in an increasingly digital world + management risk. The essential ingredient is Leadership.

Time to talk about Radiohead and giving away music:
First 10 days: approx 1 mil downloads. 38% paid about $6. In the US, more people paid and they paid MORE than outside the US.

Most importantly, Radiohead doubled their profit per album for the band versus label.

He talks about where search might be going in the future. If you’re reading this blog, you already know about this stuff. He likes SearchMe, which looks like iTunes album chooser.

To wrap up, it’s time for a video about Muppets (and integration)!

Jeff’s up now.

How many of you have bought film in the last few years? Not a whole lot.

How many of you have digital cameras on your phone or one with you right now? About 3/4 of the audience.

Jeff tells a story about flying to his first day at Kodak and how the girl in the seat next to him didn’t know what Kodak was. Ouch. [Jeff can fly? Cool! – Lisa]

We get a long video about how Kodak is embracing digital and getting a lot of praise.

Jeff says that sixty percent of the people who are with the company today weren’t with the company four years ago. They invented the digital camera in 1976 and set it aside because they didn’t think that it was marketable.

Every Best Picture for the academy awards had been on Kodak film. For 80 years.

Kodak Gallery had more than 70 million members, bigger than MySpace. [But why haven’t we heard about it?]

Kodak prints 80% of the scratch-off lottery tickets. Huh, that’s cool. [What’s with the random Kodak trivia? Will be quizzed on this later? – Lisa]

Most (60 percent) of their business is now B2B not B2C. They have a strong worldwide brand, with 60% of their revenue coming from outside the US. They’ve been in China since 1928. They’ve decided they only want to be one, two or three in the market. If they can’t, they’ll get rid of that division.

The new Kodak is FPEG (Fil, photofinishing, entertainment group), CDG (Consumer digital group), GCG (Graphic Commmunication group) and…other.

Be the first one on the left in a picture, he says. They list the names left to right. Hee!

Their digital portfolio is built to grow. They’re investing in printers and ink trying to make it more profitable.

They’re moving out of being sponsors for the Olympics. It’s not a good business buy for them to wait for an event that comes every two years. They’re a fast company, two years is too long. Instead they’re going to be part of the PGA. 26 most difficult holes in golf will be the Kodak hole. 18 of those will win $1 million dollars. It’s “fricking brilliant”. [I’m going to hope the golf people know what that means – Lisa]

They’re going to build ‘shush’ cameras. There’s no SOUND on a digital camera, he says. They build that in! They should make vroom noises for NASCAR cameras. Hee.

They’re using blended campaigns instead of just broadcast campaigns. The line between advertising and content needs to blur, make it entertaining.

They’re sponsoring product placement on the Apprentice. They think it was great; it did a great job for them. They watched every single episode to figure out how things worked the best and what they could expect as a value proposition time. They asked the inkjet guys, “what do you want to get across?’. They said “If you can get that you can save up to 50% on ink, that would be great.” He shows a clip from the Apprentice.

Usually you can get 2-3 minutes of value proposition. They got a mention Kodak 4.4 times per minute for 43 minutes. Their sales DOUBLED the week following the show.

The men’s team was ugly but spot on message. The women’s team was gorgeous but boring.

Gene Simmons caused controversy. So they kept it going! One of the cases where someone insulting you and telling you that you’re wrong turned out well. They even got invited back.

They created a microsite and blogs to milk every last bit of value of it. They used direct mail, radio, online, stickers, etc. It’s still paying off.

Vinny Pastore spot beating up a competitor’s printer. They’re starting to take liberty with the brand a little, not the usual “Kodak crying commercial”. They have some more fun commercials running online. Gizmodo ran a headline that he wanted to write but couldn’t. They got 1.92 million views from that alone.

A spot featuring Nely Galan doubled sales when they put it on the front of Kodak Gallery. This one is a crying spot, btw.

How do you take a company that has this rich heritage and update it? How do you update to a digital shoebox? There’s a video online “this is not your father’s Kodak” and it nearly got him fired 5 days after he joined the company.

They’re trying to reeducate the company as well. Letting them know that it’s okay for people to get mouthy and passionate. Consumers can say things that you can’t. His job is to create tension wherever he goes. He wants to push them to the edge. Legal pulls you back to the center.

They have a “trust, reliability, quality” reputation. Push one button and we’ll do the rest. He thinks they can still do that in a 2.0 world.

His rules for what you can do: Is anyone gonna die? Are we going to break any laws?

His job is to be out there. He doesn’t like meetings. He wants to be doing the work. Hear hear.

Question & Answer

What are you doing in the way of targeting?

I have 17 different CRM systems in the company. He plucked a data architect out of the Web group and made him design a system to keep it all in order.

Lots of direct mail. LOTS. Community analytics are being integrated right now, how to make 70 million members into a real community? He believes in print. 50% of their spend is in print. 22% is in direct mail. 3% is online spend. Emails been abused beyond recognition.

Are you going after desktop computing arena?

Yes, absolutely, we’re going after everything. We like all photographs. We want them to be taken; we want them to be used. The future is going to have pictures in your walls and you’ll be able to toss them all over the place, emails, just using a Wii-like remote.

[The future he describes sounds like the movie walls in Fahrenheit 451. Just saying.–Susan]

It’s about activation not buzz building. You’re going to fail in the first 30 seconds if you don’t have a compelling value statement. All I care about is how you’re going to how you’re going to help me with my value. I care about sales not brand lift.

He thinks social networking is overhyped right now.

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