Weighing Ethical Issues In Testing Drugs Abroad
Pushing a new drug past the daunting scrutiny of the FDA and onto the
shelves demands a typical outlay of $200 million. Average in all the
remedies that fail along this four-phase process and that single
success may have to pull in $897 million before its manufacturer turns
a profit. Understanding these astounding figures grows is easier when
one considers the up to $100,000 per-patient cost of testing over the
long term in the United States.
Given the cost for doing this testing in the United States, many large
pharmaceutical companies have taken clinical drug trials offshore. In
a number of countries, including China and India, the per-patient test
is 50 to 80 percent less than it is here, making the decision to
complete human tests overseas a no-brainer. But for smaller biotech
firms, the decision, while alluring, may not be quite so simple.
Both the benefits and hurdles are covered in the panel discussion
"Off-Shoring Clinical Trials: Where? Why? & How?" on Monday, October
16, at 2:15 p.m. at Loews Philadelphia Hotel. This seminar takes place
as part Biotech 2006 Conference, which is co-sponsored by the Biotech
Council of New Jersey (ww.biotechnj.org) and Pennsylvania Bio
(www.pennsylvaniabio.org). The event continues on Tuesday, October 17.
Cost for workshops only, $650; for full sessions, $1175. Visit
www.biotech2006.org to register and for more information.
Panelists for the discussion group "Off-Shoring Clinical Trials"
include Ulrich Grau, president and CEO of Lux Biosciences; Nyan
Nanavati, vice president of PAREXI Clinical Approvals; Carol
Cruickshank, vice president of A.T. Kearney; Ramesh Kumar, CEO of
Onconova Therapeutics; and James Taylor, worldwide head of outsourcing
Grau, a native of Frankfurt, Germany, earned his bachelor’s degree in
biochemistry from Stuttgart University in l978. He came to the United
States to earn a Ph.D. and to do post-doctoral work at Purdue
University. A diabetes researcher at one stage in his career, Grau
invented a a long acting insulin for later stages of the disease.
No stranger to giant corporate culture, Grau served as senior vice
president for development for Aventis, overseeing a $1 billion budget.
He then took a post as president of research and development for BSF
Pharmaceuticals in College Park, Maryland. Grau founded Lux
Biosciences (www.luxbio.com) in early 2005 for the purpose of
developing novel medications and delivery methods for the eye.
"As for me," he says, "I did it partly for the excitement of being on
my own, and partly because I feel that smaller biotech firms can be
more effective on specific projects."
There is no doubt, Grau says, that offshoring clinical trials has
become a popular trend. Any time that you can cut costs so
dramatically for such a huge operations expense, everyone wants in.
"But it is a quickly moving target with many tricky considerations
that one cannot ignore," says Grau.
Small versus large. Life science companies of all sizes face
fast-rising research and development costs, along with a reduced
number of FDA approvals. But Grau says that the smaller biotechs
almost always operate much more cost effectively in the research
areas. "There is no economy of scale here," he says. "The large
pharmaceutical firms are bogged down with a huge infrastructure,
inhibiting both speed and thrift."
But big companies do possess the ready cash necessary to move
operations across an ocean, to rent facilities, and to train foreign
staff. A smaller firm may spend more to move clinical trials overseas
than it saves.
Patient competition is another consideration. For oncology
medications, for example, finding appropriate patients as yet
untouched by testing can spark a highly competitive man hunt.
How far offshore? The contract research organizations, which provide
patient pools for biotechs, are now looking for trial candidates in
India and China. Both countries’ populations are ethnically varied.
Transportation and research infrastructure are solid in these
countries, and each has large numbers of individuals who are not
taking medications that will interfere with the results of clinical
"It is a sad fact," says Grau, "that in these places there are many
people who have never received the medications related to their
disease." This is unfortunate for affected individuals in these
countries, but good for drug developers. In contrast, nations like
Korea and Singapore, along with countries in Eastern Europe, have the
technical infrastructure for trials, but cannot generally be used
because so many of their patients are treated for serious diseases.
Both Africa and South America, while rich in qualifying patients,
frequently lack the skilled local personnel and transportation
structure to make testing attractive. The exceptions are parts of
Argentina and South Africa. "However, Africa is definitely the future
field of clinical testing," says Grau.
Ethical issues. The vision of the heartless lab-coated scientist
injecting hundreds of trusting native folk with questionable
substances has dogged clinical testers for over a century. Many
cynical observers point out that skin lotions may be tested on the
arms of United States residents, but when it comes to experiments with
the heart or eye, researchers turn to people on some distant shore.
Grau abhors any program of testing that involves individuals who are
less than completely informed. But he notes that there is another
moral obligation more easily overlooked. Experimental clinicians
cannot just descend into an area, bring a long-sought-after medicine,
heal for six months, and then up and leave. "There must be long term
continuation protocols," he insists. "It goes beyond approval. It is
one’s ethical imperative."
The true ethical rule of thumb is conduct clinical tests in a manner
that is above reproach. Regardless of how eager a country may be to
cooperate in such testing, and to look the other way on issues of
informed consent and treatment of test subjects, Grau says that
researchers must take every safety precaution, just as if they were
testing their own family. By making such a commitment, the company is
opening its doors for international approval later, once FDA approval
Not all patients are equal. Finding a suitable patient population goes
far beyond getting a clean, unmedicated group. The ethnic
differentials are enormous, Grau points out. Africans tend to have a
different metabolism than most Asians and North Americans. Japanese
people tend to require smaller dosages than most Americans. Remote
island people may be too homogeneous to reflect the population of a
country like the United States or Great Britain.
Beyond the patients themselves, clinicians need to consider quality
controls. Are their enough technical personnel in a new arena to
perform the tests and to gather and record the data accurately, and on
time? (Hot-wired India is renowned for getting tests back to United
States companies while North America sleeps.) Finally, Grau mentions
the stability of the national and regional government. "I have seen
people actually trying to monitor test sites in a war zone," he says
with a shake of his head.
The contract research organizations continue to grow as an increasing
number of medications require testing across the globe. They are
making overseas patient pools more attractive to even small companies.
But as with any business venture, it is wise to undertake a lot of
cost and logistics planning before leaping at a bargain price tag.
– Bart Jackson
Pros and Cons of Franchising
So why do all the stores in New Jersey malls look the same as those in
Georgia? Well, there are two reasons, each having to do with a
different business model. First, there are the establishments like
Starbucks and Outback Steakhouse, both owned by corporations that have
stores throughout the nation. But there are other operations, like
Applebee’s, Cheesecake Factory, and Kumon, which have spread widely
using a different approach, franchising.
Franchising is big in New Jersey, with more than 20,000 franchise
establishments in the state, according to Adam Siegelheim, a Stark &
Stark attorney with practices in banking and financial services,
business and corporate, and franchise law. "There are very few
independent-run, non-franchised retail stores," he says and quotes a
recent Price-Waterhouse study estimating that franchises contribute
$40 billion to the New Jersey economy.
For a local business owner who wants to expand, says Siegelheim,
franchising is a relatively inexpensive way to go. "You don’t need as
much capital," he says, because the franchisee is making the
investment. Furthermore, when the franchises are being managed by
owner-operators, "they are more motivated for a store to do well than
if a corporation opens 10 locations, and puts a manager in each one."
Whereas a manager sees it as a 9-to-5 job, the owner is going to stay
there until 10 p.m. making it work. "If you have people vested in
making it work," he says, "it’s their livelihood, their baby."
Siegelheim adds that if businesses choose the corporate ownership
route rather than franchising, they not only need to hire and train
employees, but are still responsible for day-to-day operations. "With
franchising," he says, "you also train, but at that point the
franchisee takes over."
Of course, the onus is still on the franchisor to choose a qualified
franchisee to run a location. "You’re only as good as your
franchisees," says Siegelheim. "You really have to do due diligence to
make sure you are picking the best franchisees."
Siegelheim speaks on "Franchising Your Business" as part of Trenton
Small Business Week on Tuesday, October 17, at 8:30 a.m. at Wachovia
Bank, at 32 East Front Street in Trenton. Siegelheim will explain to
business owners looking to expand their businesses and increase their
profits what a franchise is, which businesses are franchisable, and
what the legal requirements are. For more information, call
An annual fall event, Trenton Small Business Week runs from Monday,
October 16 through Thursday, October 19. It includes the fifth annual
Mercer Regional Chamber Expo on Wednesday, October 18, at 9 a.m. at
the Trenton Marriott and the Trenton War Memorial. There are many
seminars each day, and most of them are free. Topics include selling
to the government, grass roots marketing, creative negotiating for
real estate, trademarks and patents, and the art of using credit. The
final event of the week is the "BlackNJ Professional Mixer," on
Thursday, October 19, at 7 p.m. at Maxine’s2 Restaurant on South
Siegelheim emphasizes that the advantages of franchising are not just
for business owners looking to expand but also for relatively
inexperienced individuals who want to start their own businesses:
Startup and ongoing support. "Lots of people who have been downsized
out of corporate America are looking to do something completely
different," says Siegelheim, and franchising gives them the chance to
open their own businesses with a safety net. Most franchisees, it
turns out, have no background in the business they are going into, and
need lots of help, and the franchisor provides them with a weeks of
training, an operations manual, and ongoing training and support.
With franchising, he says, "they are not starting from scratch." The
franchisor gives them "a recipe to run the business," which includes
ideas about how to most effectively advertise, hire employees, and
market products and services. A franchisor’s help reaches down to the
nitty-gritty level; in the restaurant business, for example, it might
include how to cook meals, do the payroll, and hire a manager.
Name recognition. Possibly the biggest advantage of a franchise is the
franchisor’s name. "You are not only getting the formula of how to run
the business, but also a brand name to associate with," he explains.
"You can make the greatest doughnut in the world, but if a Dunkin’
Donuts opens across the street, their parking lot will be full."
Loss of control. But there’s also a big downside to becoming a
franchisee, says Siegelheim. "It can stifle your creativity and any
entrepreneurial aspirations you want to fulfill." He cautions against
franchising a McDonald’s restaurant and thinking you can improve on
the Big Mac. With franchising, you can’t tweak the system. "If you
feel you can make a better burger," he says, "you should open your own
Although franchisees are not permitted to introduce their own
products, there is a role for entrepreneurial skills when franchisees
own multiple locations. Multiple sites open the possibility of volume
purchasing, but the different sites also provide backup for one
another. If a manager is sick in one location, you can bring an
assistant manager from another, or if one location is low on staff,
you can bring in employees from another. .
The decision to clone. To decide whether a business is franchisable,
the owner needs to ask if it is easily replicated, and if it is easy
to teach others how run it. "It’s one thing if a family in business
for 80 years makes the best spaghetti in town," says Siegelheim, "but
it doesn’t mean someone downsized from AT&T who never ran a restaurant
can do it." The business also must be something that is not regional
or specific to one area. "The largest segment of franchises popping up
respond to universal needs," he says. Right now a hot segment is
businesses that cater to children and to pets.
Businesses that decide they are ready to franchise must contend with
some legal issues. Franchisors must provide prospective franchisees
with a Uniform Franchise Offering Circular (UFOC). In it they must
disclose the total investment necessary for the franchise; the amount
of fees to be paid to the franchisor; information about the
franchisor, including business experience and whether any litigation
has been filed against the franchisor in the past few years; whether
the company or any key employees have filed for bankruptcy; how many
locations the franchisor has; how many locations have terminated or
otherwise left the system in the last three years; and a copy of the
company’s audited finance statements. The UFOC must be given to a
prospective franchisee after the initial face-to-face meeting with the
Fifteen states have enacted registration laws that require a
franchisor to register the UFOC and get permission from the state to
sell within its borders. Although New Jersey does not have this
requirement, New York does, so it would make sense for any New Jersey
business planning to expand in the Tri-state area to register in New
"There are also statutes in states that offer franchisees protection
that franchisors need to be aware of," says Siegelheim. The New Jersey
Franchise Practices Act, for example, affords franchisees broader
protection than they would normally get under a franchising agreement
– on issues like denying renewal without good cause or attempts to
prevent the transfer of a franchise from one party to another. And, of
course, a potential franchisee should bring the UFOC to both an
attorney and an accountant for review before signing.
Siegelheim, who grew up in East Brunswick, comes from a family of
businesspeople, not lawyers. His family’s firm, started by his
grandfather, produces advertising specialties like the hats with a
Yankees logo provided to the first 10,000 fans at a game. Because it
sells in such large quantities, Siegelheim doesn’t think the business
would work well as a franchise.
But he mentions a similar business that does work as a franchise,
EmbroidMe, which he describes as a "watered down version" of his
family’s business – providing one or a few items to each customer as
opposed to his parents’ business, which sells thousands at a time.
So why did Siegelheim decide to become a lawyer instead of joining the
family business? "When I was growing up," he says, "I was always
fascinated by TV shows like LA Law, Matlock, Law and Order." After
graduating from the University of Pittsburgh in 1996, with a
bachelor’s degree in political science, and from the University of
Pittsburgh School of Law in 1999, Siegelheim worked for several years
as a litigator, first in Paramus and then with Carroll, McNulty and
Kull in Gladstone.
He then switched to corporate with Stark & Stark, which he much
prefers. He says that corporate law he feels that he can help foster
positive relationships rather than always being adversarial. In
franchises, for example, he brings together people who can form a
mutually beneficial relationship. "It’s much better to be a deal maker
than a deal breaker," he says. "When I was doing litigation, the
wheels had come off the bus, and everyone was at each other’s
– Michele Alperin
Move Your Sign To Cyberspace
`A business without a sign is a sign of no business" has long been a
standard phrase in business marketing. Without a sign in front of your
shop, nobody will know you are there. In the Internet age many want to
alter the phrase to include websites. Surely if a business does not
have a presence on the Internet, it must not truly exist.
Unfortunately, like a sign that has been overgrown by brush, a website
can easily disappear behind the billions of pages among which it
"Build it and they will come" no longer applies to websites. Everyone
has one and no one has time to look at them all. How then can a
company maintain a website that will help increase business instead of
To sort it all out Thomas Edison State College hosts "Pods, Blogs,
VOIPs, and More: Using Internet Tools to Advertise Your Business," a
free seminar by Nancy Vinkler as part of the Trenton Small Business
Week on Tuesday, October 17, at 10:30 a.m. at 101 West State Street,
Townhouse Room 104.
After graduating from Penn State with a bachelor’s degree in education
and earning an MBA from Villanova, Vinkler embarked on a 25-year
career in information technology. Specializing in business development
and product marketing, she managed websites for several large
corporations including, Quadritek and Lucent Technologies.
In 2002 Vinkler went out on her own, purchasing a franchise from WSI:
We Simplify the Internet (www.WSIsimplyROI.com). Vinkler works with
companies to tailor a marketing package that suits both their needs
and budget with a "focus on business strategy."
Vinkler points out that Internet marketing is not very different from
standard print marketing as far as strategy goes, and that return on
investment is still the most important consideration. The biggest
difference is the flexibility of the Internet. As an example, Vinkler
says that a traditional Yellow Pages ad run can cost $1,000 a year and
once printed cannot be changed. Web content can be updated as
frequently as a business has a new message its customers.
Websites are a business’ home base on the Internet. To make them work
Vinkler stresses three key steps:
Traffic is the number of potential customers who click to a website.
There are a number of ways to build traffic, starting with search
engine optimization. A typical Google search can easily return several
million sites. A quick search for "furniture," for instance, returns
more than a quarter-billion hits. This number is way too large to wade
through, so a consumer is most likely to click on one of the first few
results. While optimization has been around for a while, "it’s more
complicated now that it ever has been, because of volume," Vinkler
says. "If you are not on the first three pages you are not considered
to be on the Internet."
Luckily there are a number of tools that can help a site improve its
ranking, the easiest of which is sponsored links. Search engines
typically return two sets of results, the "organic" or free listings,
and the sponsored links. Sponsored links are paid advertising and
premium space on the results page. Vinkler explains that "the top left
position is the most desirable and can cost upwards of $5 per click."
The upside is that the link is free if no one clicks on it, and
because the Googler can see a brief description of a company before
deciding whether to invest time in a click, he is not likely to click
if he is not interested.
Content is what will keep a surfer on your site. Vinkler asserts that
"the average time spent on a site is eight seconds." This is not a lot
of time to grab a potential customer’s attention. No one is going to
spend much time on a boring page, but Vinkler warns that "overly
salesy sites" can also be a turn-off. The key to balancing between
bland and bling is useful information.
Vinkler says that both blogs and podcasts that inform or entertain
will keep surfers on a site. Both are now easy to set up. Podcasts
have the advantage of letting potential customers take you away with
them in the form of audio that can be downloaded onto a portable media
player. Keeping new visitors around long enough to fall in love with
your product will greatly increase your chances of advancing to the
conversion phase of the relationship.
Conversion, the holy grail of Internet business, occurs when a person
has found a web page through the sea of competition, stuck around long
enough to realize that he wants your product or service, and has
decided to make a purchase. It’s not easy to get far. This is akin to
the "close" that real-world salesmen use to bring a deal home. An
Internet entrepreneur who has gotten a potential customer this far has
to pull out all the stops to turn him into an actual client – and, if
at all possible, a loyal, repeat customer.
Vinkler suggests using VOIP, or Voice over Internet Protocol, to
connect directly with prospects, and to add the personal touch lacking
in most internet businesses.
VOIP links on a web page let visitors make a free phone call to a
company representative right from their computers. Vinkler says that
VOIP system can even be set to find the business owner, ensuring that
he is able to close the deal.
If you own a business, it is a solid bet that you have a website. You
have already spent time and money developing it, and it probably looks
well tended, but not much else. Now is the time to send it out into
the world and put it to work. Vinkler says that the tools to take your
website to the next level are now inexpensive and easy to put in
place. – Patrick Spring
From Your Kitchen To The World
You make a fabulous salsa/chocolate chip cookie/chicken pot pie.
Everyone tells you that you should market that product. Go into
business, they say. You could make your fortune!
It’s not that easy, says Diane Holtaway, associate director for
business development at the Rutgers Food Innovation Center. Starting
any business is complicated, but there are special concerns to
starting a food related business. To assist would-be food
entrepreneurs in the early stages of planning their businesses, the
Rutgers Food Innovation Center holds a business basics seminar for
food entrepreneurs on Tuesday, October 17, at 1 p.m. at the Rutgers
EcoComplex, 1200 Florence-Columbus Road, Bordentown. Cost: $25. For
reservations and more information call 609-499-3600.
The seminar focuses on the basics of operating a small scale food
business of any type, from selling food to the public, perhaps as a
bakery or a restaurant, to manufacturing food to sell through grocery
stores, gift shops, and other outlets. Speakers include Holtaway and
other staff members, Julie Elmer, associate director of food
technology, and Christopher Shyers, business development specialist.
The seminar introduces would-be entrepreneurs to "everything they need
to think about before starting a food business," says Holtaway, as
well as the services offered by the Food Innovation Center.
Government regulations regarding food safety can seem complex, and not
following the rules can put a company out of business. One of the
first issues a food business must deal with is finding a certified
kitchen to produce the product.
"If the business is going to sell directly to the consumer, there is
one set of rules. If it is selling to a wholesale market, there is a
whole other set," says Holtaway. For a retail business the kitchen the
food is produced in must be certified, usually just by the county in
which the kitchen is located. If the company plans to sell wholesale
state regulations must be met.
Liz Duckman, owner of Nutty Ducky’s Brittles in Edison, attended a
seminar at the center in 2005 and learned that her original dream of
making her candies in her kitchen could not become a reality. Duckman
left corporate America a few years ago "with a package," and then went
about trying to decide on a new career. With more time available she
began making nut brittle candies and giving them away as gifts.
"Everyone told me it was so good I should sell it, and stupidly I
listened to them," she says jokingly. In her first plan she envisioned
herself cooking up her candies in her own kitchen, packaging them
herself, and marketing them. After meeting with the Food Innovation
Center staff she knew that she couldn’t run a business that way. "It’s
against the law to make food you are going to sell at home. You can’t
even store it at home," she says. "You need a lawful kitchen or a
co-packer." A co-packer, she explains, is a manufacturer who
specializes in making food products.
While the kitchen may be one of the biggest obstacles for a food
business, there are any number of other things the would-be food
entrepreneur should know, says Holtaway. Just as for any other type of
start-up, the first step is a good business plan.
Differentiate your product. It is particularly important for a food
start-up to differentiate itself because there is so much competition,
says Holtaway. In fact, 90 percent of food start-ups fail. "Whether
you are selling house cleaning services or making truffles, you have
to know what makes you different from any other company."
Figure on feeding the multitudes. "Your friends may think that you
make the greatest salsa in the world, but when you go to manufacture
in large quantities the recipe is going to be different," says
Find your funding. Food entrepreneurs have to have money to develop
and produce labels and packaging, design a marketing campaign, rent
time in a kitchen, pay a a co-packer, and ship the product to market –
all before seeing a dime back on their investment.
Investigate price points. If the product isn’t priced right, it won’t
sell. A food business must be sure the product can be manufactured at
a price people will pay.
Keep up with trends. Knowing the trends in the food industry is one of
the most important things for a food start-up. "To come up with a
winning idea you have to do your homework," says Holtaway. "Marketing
to a 12-year-old girl is different than marketing to a 45-year-old
Some of the current trends in the market include ease and convenience
of use. "Easy to prepare or no preparation" is a very important trend
in the current market, she says. Customization is another trend.
Targeting a specific market segment, rather than banking on general
appeal, will make a product easier to sell.
Yogurt is one of the best current examples of market customization.
There is the traditional yogurt with the fruit on the bottom, blended
yogurt, yogurt for children, yogurt aimed at athletes, yogurt drinks,
yogurt specifically for women, and reduced calorie yogurt. "Each
product addresses itself to a specific consumer group," says Holtaway.
There is one factor that cuts across all groups, though. Says
Holtaway: "It has to taste great."
Holtaway joined the Food Innovation Center when it opened in 2001. She
sees her work there as an extension of her lifelong love of food and
cooking. "I’ve always had a passion for food," she says. "When I was
very young I remember standing in the kitchen with my mom and
grandmother and learning to cook." She received a bachelor’s degree in
food and nutrition from Rutgers University and then went on to get a
master’s degree in business from New York University.
She has worked as a food editor for Ladies Home Journal and for two
large food corporations, Unilever and Campbell’s. "At the Food
Innovation Center I’m doing for small companies the same types of
things I used to do for multi-million dollar brands," she says.
The five-year old center can help its clients "do everything a large
company can do except manufacture," says Holtaway. "We have a team
that can assist with all areas of the food industry, a technical
staff, marketing, production, even an international expert.
The center is going to add manufacturing to its menu of services soon.
The architectural plans for a food manufacturing incubator are
currently in the final stages. When the incubator is built companies
will be able to use the facility to manufacture small quantities of
The food and agricultural industry is second only to pharmaceuticals
in New Jersey, says Holtaway. The center has assisted about 600
clients since opening in 2001.
Without the advice from the staff at the center Duckman isn’t sure her
brittle candies would have made it from concept to production. After
attending a seminar last June she was able to begin production in
January, 2006. She says she has invested about $45,000 in the
business, and while she has yet to see a profit, her candies are now
available in stores in 10 states and she is now talking to potential
buyers in Puerto Rico, Oklahoma, Arizona, Michigan, and Wisconsin.
Says the brand-new candy entrepreneur, "Without the knowledge and
resources of the center, I wouldn’t be here."
– Karen Hodges Miller
For Advertisers, Cyber Niches to Mine
`America is changing from consumers to prosumers," says Richard
Teplitsky, Lucent’s director of communications for global sales and
services. "They don’t care about
this year’s model or last year’s brand. Instead they are shouting what
they want loud and clear."
These prosumers are telling that communications industry that they
want what Teplitsky terms "content banking." Be it money, music, talk,
or business information, people want to have it banked, on hand, and
ready for access across the globe. For the already ulcer-ridden
industry of advertising, this change has proved to be a traumatic,
Exactly how one can market in the face of new customer profiles and
ever-shifting technology is the topic of Teplitsky’s on "Corporate
Communications and Technology" on Tuesday, October 17, at 4 p.m. at a
meeting of the Jersey Communications, Advertising, and Marketing
Association (NJ CAMA) at the Princeton’s Marriott Conference Center.
Cost: $45. Visit www.njcama.org to register.
A native of Philadelphia, Teplitsky attended Temple University,
earning a bachelor’s degree in communications in 1985. After
graduation, he joined WWDB, one of FM’s first all-talk radio stations.
"Everything was done live, with all the interview talent being pulled
in and run to the split second," he recalls.
Teplitsky then worked for the media department of Philadelphia
Magazine until l996, when he moved with the times and headed various
communications departments for a series of high tech companies.
Students at Temple University, where he serves as an industry advisor,
to hear his tales of telecom’s boom, then bust of seven years ago, and
current re-boom. For Lucent worldwide, Teplitsky tracks his firm’s
expanding international partnerships and
reassures everyone that telecom innovation is speeding ahead.
"Technology has rearranged our social networks," says Teplitsky. "This
change will surely continue and advertisers ignore it at their peril."
New canvases. Analogous to magazine publishing in the l970s, today’s
blogs continue to proliferate into increasingly specialized interest
topics. (Yes, there really are 30 blogs on skateboarding.) Three
decades ago, magazine advertisers quickly seized the opportunity and
inexpensively targeted these small, hot-to-buy groups. That same
opportunity now has reemerged in cyberspace.
Ironically, while technology makes us global, the mode is infinitely
more personal. MySpace (www.myspace.com), once deemed a young person’s
online pathway for finding friends, activity partners, and jobs, has
crossed the age barricades. Seniors are slacking off on E-mailing the
grandchildren and increasingly are logging on to link with each other
for meeting or just chats. These more personal channels allow a more
personal marketing access, but only if the message is deemed an aid,
not a distraction.
Teplitsky points out that the new media, like their still-giant kin of
television and radio, all require ad space to pay the bills. For the
marketer, this means more study not just of new targets, but of the
media a given client’s buyers access.
Cyber furors. Individuals using cybermedia are not just watching, as
they do with television, or reading, as they do with newspapers and
magazines. They are interacting, and therefore feel more possessive
about their screens and time. The television commercial is greeted as
a tolerated interruption, but the online ad gets labeled "spam" and is
often viewed as an invasion.
The prosumer clicks his mouse in search of information. The marketer
who merely seeks brand recognition will fall – stunning graphic and
all – right into the delete basket.
Additionally, digital rights management issues will accelerate with
increasing content, Teplitsky warns. Who is the author? Who is the
owner? And who, if anyone, gets paid? These are questions that the
judiciary has only partially answered for the last half century. It
began with photocopying, moved on to VCR tapes, and is now a hot issue
with Internet content.
The fight over downloading intellectual property will continue. The
advertiser must examine not only his own ethics, but the legality of
the media through which he plans to send his message.
Device fatigue. Watch a road warrior in any airport. He’s got his cell
phone and laptop flipped open, scanning back and forth to his
Blackberry, dreaming of that on-plane moment when he can relax with
his MP3 player or E-book. We all are becoming victims of what
Teplitsky terms "device fatigue."
We are screaming for electronic consolidation amid our juggled
clutter, while retaining, of course, all that content banking and
global portability we’ve come to love.
The American prosumer has more than demonstrated his willingness to
pay for electronic content and the devices that deliver it. Teplitsky
notes that Average Revenue Per User (ARPU) has risen to $72. This
means that some Americans may gladly pay nearly one half of their
average individual at-home food bill each month just to reap the
riches of the Internet and the cell phone. This ARPU does not include
cable and other television fees.
As manufacturers scurry to catch up and cash in, telecommunications
lines have begun to blur. Is Google a connector or a content provider?
What are the turf differences between Yahoo and Verizon? More than
ever, the advertiser finds himself perplexed as to how best to reach
Marketers’ dilemma. Amid this swirl of expanding and converging
technologies, what’s a poor ad person to do? Teplitsky advises a new
strategy. Concentrate less on placing spots and on grabbing larger
market shares of targeted groups. Instead look for those furtive sites
and cyber niches where individual customers hide. After all, they tend
to cluster in interest groups – places where standard demographic
studies do not apply.
But most important, Teplitsky warns advertisers to keep themselves
technically aware. Technology is driven by trends. Latch onto these
and it becomes easier to predict the next avenue of placement.
"Remember," he says, "your competition is already studying the new
changes. You just cannot afford to be ignorant any longer."
– Bart Jackson