Viacom positioning for future growth

So last week we had the news that Neopets was bought by Viacom and now MTV has officially created MTV Games, jumping on the video game bandwagon. Both of these are truly bold moves by Viacom to shake up the media landscape and get out as the leader in emerging media. If you think about it, both these moves seemed tied to the Viacom vote to break into two companies, one focusing on high growth potential and the other acting as a cash cow. With the Neopets and gaming moves, you can bet you are already seeing two cornerstones of this future high growth company. The MTV Games move is particularly interesting for two little things buried in the press release. First off, they reference in-game ads. If Viacom can leverage their existing media sales force, they will be the first player to really capitalize on in-game advertising. Massive is trying to get in the game, but they aren't part of the old boy advertising network. And EA is leading from the publisher perspective, but I've read that advertising revenue is still less than 0.01% of their revenue. The second big thing is the reference to embedding music in-game. Anyone that has played Madden, SSX or any other EA Sports game knows how big music has gotten now. In fact, these games have been credited for even breaking one or two artists. Think about all the touchpoints MTV can now offer the music labels and you see the tremendous potential for that revenue stream. It will be interesting to see how this things shapes up.

Viacom looks for growth through digital pets

Word hit the street that Viacom is buying privately held Neopets in a deal valued at $160MM. I've talked before about Neopets and how solid of a model they have, supported with a great managment team. Having worked with both MTV and Neopets, they have two very different styles of business. It will certainly be interesting to watch this unfold and the integration take place. I think it's the right move as long as the price tag makes sense financially. Neopets brings an extremely strong brand to the table and a history of overdelivering results to their corproate partners. And Viacom will be able to integrate a host of their businesses very naturally into Neopets.

One thing of interest...Disney has a pretty big presence on Neopets with their movie theatre integration. I can't see Viacom wanting that valuable piece of property to stay in the hands of Disney.

Style on a budget

As a loyal Starwood member and a huge fan of W Hotels, I couldn't be happier after reading about Starwood's expansion plans for a low-budget style hotel codenamed "XYZ". Design is becoming so important in everything even categories like deodorants and dishsoap, as consumers are looking for style everywhere in the lives. It's great to see companies like Starwood and Target paying more attention to design. These days, a great product alone won't sell. It has to be a great looking product as well.

Brand Immersion hits NYC

The Tribeca Grand Hotel, a place that many consider the hippest hotel in NYC, has created a true brand experience with their iStudio Director's Cut hotel room. Branded hotel rooms have been popping up all over the place with even companies like Nickelodean getting into the game with Holiday Inn. I find this to be a great thing for both hotels and for brands. For hotels, you offer something different and a chance to underwrite the cost of upgrading rooms. Plus you can likely charge more this unique room. For brands, you get hours of exposure with consumers and a chance for your consumers to try your products. I especially see this as a great opportunity for tech companies. Think of a Microsoft/Xbox 360 suite where consumers can play games before you see they are released, a sampling with thought leaders where they pay to experience your brand. The opportunities are endless, as long as they are done right that is.

A little bragging

Just have to send props out regarding Secret Sparkle's win at the EFFIE Awards last night. The team won a Silver EFFIE, the second in the brand's history (the first a Hispanic ad won in '93). The credit really goes to our agencies (Leo Burnett, Starcom, Landor, IMC2 and MMC) who delivered a great campaign. Nice work team.