Second-place strategies

In the waning days of July, search engine giant Google was getting ready for its IPO.

In the waning days of July, search engine giant Google was getting ready for its IPO.

Setbacks and concerns had delayed its approach to the public starting line, but it was nonetheless expected to raise a lot of money, which it would certainly use to help the company become an even more successful public entity.

On August 1, Mark Cuban - billionaire, owner of the NBA's Dallas Mavericks, relatively new blogger at, and soon-to-be host of ABC's The Benefactor - announced a new title to his collection: investor in new search-engine company IceRocket.

In his August 1 blog post, Cuban announced the company and explained they key differences between IceRocket and Google before anyone had time to ask. The late '90s produced its share of search-engine debuts that went through periods of prosperity and followed a path, laid in Google's massive footprint, mostly towards irrelevancy or acquisition. With so many people dependent on Google -pop culture would die without it - IceRocket certainly has its hands full.

Being a first-to-market concern can make a company a lame duck if a rival emerges with product improvements or a genius marketing strategy. Competitors can spy from the distance, capitalizing on mistakes and amplifying what works.

That is why the marketplace is littered with entrepreneurs who see opportunity where everyone else sees an untouchable. For every Google, there is an IceRocket. For every MTV, there is a Fuse. For every iPod, there is an iRiver. But a shrewd business approach is only half the battle. If the successful product or service is in place, it's up to the marketing teams to win the battle in the public's eye.

"Don't be afraid of the leader because the leader is always vulnerable," advises Bob Gelphman, principal at Gelphman Associates. Gelphman is working with Pete's Wicked Ale founder Pete Slosberg on a line of candy bars, Cocoa Pete's.

He said the number one goal was to determine a niche in the industry that is being under-delivered.

"The world doesn't need more candy bars, it needs more premium chocolate," Gelphman says.

As such, he says Cocoa Pete was tailored to be uniquely shaped, flavored, and marketed as a product for that niche. Public relations provides nascent companies with the opportunity to get their message across for little money. But when challenging a market leader, one has to be careful to not fall victim to outright audacity or antagonism in that approach. IceRocket's current technique is quiet workmanship. Outside of his initial post, the normally gregarious Cuban hasn't mentioned the firm on his blog since.

"You won't see us with a big PR or marketing push until we have honed the features that we think can drive growth," Blake Rhodes, CEO of IceRocket says in an e-mail interview. "We don't want to set expectations we can't deliver on [yet]."

The company doesn't have a current timeline in place to ramp up communications efforts, as it is "head to the grindstone on developing the product."

Rhodes adds: "We haven't seen the floodgates break, so it's only been very positive" The company has been mentioned in ClickZ, Cnet News, Fort Worth Star-Telegram, The Guardian, and Search Engine Journal, among others.

While IceRocket does not have someone handling PR and does not proactively pitch the media, Rhodes does accept interview requests and maintains his own blog to keep the public aware of the firm.

"We actually are trying to replicate Google on a much smaller scale," Rhodes says, citing Google's place as an alternative to Yahoo! during its nascent phase. "We are working to develop incremental and differentiated services that makes us a compelling alternative."

One of Apple's major rivals to the iPod, iRiver, set out to best maximize its marketing strategies on a tight budget. "[iRiver] is very aware of the fact that it's tricky and expensive to get things across [via advertising]," says Gary Byrd, principal at iRiver's AOR, ThirdWire PR.

At the end of 2002, Byrd said that iRiver had 4.2% of portable MP3 player market share (including flash drives, hard drives, and mp3/CD players, a market, he says, contains 15 major competitors), while Apple held 7.7%.

"We sat down and said, 'We don't have the budget of Apple or the larger competitors," Byrd says. "How do we make some noise with the budget we have?"

Being a smaller company, Byrd says it could be far less risk-averse than some of the competition. iRiver decided to spend a majority of its publicity efforts in PR and brand partnerships. The company did a little media buy in 2003 and has increased it a bit. But Byrd says that those placements "could be counted on one's fingers and toes." The company's first PR strategy was to go out and get technical validation for the product.

"We went out to Cnet, IGN, PCWorld and PC Magazine and received great kudos," Byrd says, adding that this validation allowed the company to go to consumer and lifestyle magazines. "We were successful there too and the press hits essentially doubled every quarter," Byrd says.

The company has pursued a heavy product seeding campaign, and the iRiver features pictures of Ice Cube and Snoop Dogg holding the devices, as well as featuring it at the Playboy Mansion, CES, and other events. In this quid-pro-quo scenario, the artists receive a product and the companies receive a brand champion, often without money exchanging hands. A large portion of its strategy is to partner with different companies and get its products in the hands of celebrities and consumers alike. For instance, it has a partnership with online music store, eMusic, where eMusic provides free tracks loaded on iRiver's device.

In 2003, Byrd says Apple has a market share of 17% and iRiver has a share of 14%.

Others attempt to shock. Fuse, targeting the youth demographic both savvy and jaded to marketing techniques, has run ads that have mimicked autoeroticism, mimicked the popular iPod campaign, and dredged up infomercial superstars of the '90s to faux-pitch the network. The ads, according to Theano Apostolou, Fuse's VP of media relations, appropriates hot buttons in pop culture and speaks to the irreverence of youth culture.

"We speak to them with a wink so they'll appreciate them," Apostolou says.

"I want people to say 'I can't believe they did that,'" says Mary Corigliano, VP of marketing. "I don't want to do things that are the norm [because] we pride ourselves on having a quick, smart, and witty prankster chic."

But Fuse, perhaps mindful of the controversy that stirred up when MTV produced the Super Bowl half-time show on which Janet Jackson had her "wardrobe malfunction," is careful not to overstep the line.

"We self-monitor ourselves," Corigliano says. "Clearly the goal is not to piss people off to the point where they don't want to deal with you."

"We go through checks and balances and make sure we're not going to do anything that will offend," Corigliano says. "I pride myself on that what we do is thoughtful and clever, rather than just being gratuitous."

Despite its devil-may-care marketing strategy, the company is careful not to antagonize its major competitor. Neither Fuse representative mentioned MTV during the interview. The closest reference to MTV is when Corigliano says that the network provided the "first time in over 20 years that there has been an alternative point of view and different voice."

"It's not just about competing against music television networks, it's cutting through the clutter of entertainment options," Apostolou says. When citing Fuse's market advantage, Apostolou says the station looks at itself as a curator of its audience's preferences, rather than telling it what to like. The two also cited the network's dedication to creating an interactive viewing experience and its high frequency of playing videos.

Gelphman says that Fuse's determination not to discuss MTV is a good strategy, and it sometimes behooves companies to avoid evoking the name of the giant in the industry.

"Sometimes you don't want to raise the ire of the larger guys, but you have to implicitly say we are different than the alternatives. It has to be quantifiable," Gelphman says. In Fuse's situation, MTV has long been derided for abandoning much of its music videos for reality programming and dating shows.

While Fuse does not criticize MTV's programming strategy, it makes the fact that its own network focuses on music that its viewers want to see a key selling point. Byrd, who represents iRiver, takes a different tack, and actually praises its competitor, Apple.

"My personal belief is that Apple did great things to educate the market," Byrd says. He adds that the company has not had any strategy to go after the iPod in the media or in ads. iRiver, however, does has an opportunity to differentiate itself from the iPod.

As such, iRiver offers many different products, retailing from as little as $119.99 for 128MB flash player to $499.99 for a 20GB portable media player that can play video. In contrast, Apple only offers hard-drive music players with varying amounts of storage, but there are rumors that it will be launching a video device and a larger capacity iPod with photo display capabilities.

"The trick is to offer the market everything it may want and let the consumer decide," Byrd says.

While both Fuse, iRiver, and IceRocket maintain a guarded approach towards the giants in their industry, one of the three found it hard to stay on that path. On announcing the launch of IceRocket, Mark Cuban headlined his blog entry: "Watch out we come!"

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