A lot is riding on the U.S. marketing of the BlackBerry Z10...
Yesterday we got official word that BlackBerry will make its first ever appearance at the Super Bowl, through a 30 second commercial. People who know what this advertising costs are suggesting it's going to require RIM to write a pretty big cheque - probably more than $3 million. That's over one hundred grand per second, folks.
So what does it all mean for BlackBerry?
It probably means they have confidence in their product. Without question, BlackBerry 10 has much higher performance than the older BBOS, and even the PlayBook running OS version 2. I remember in years past when institutional investing friends of mine would tell me, "I think RIM's going to do a Super Bowl commercial!". It never happened. I hoped it would too. Perhaps they just didn't have the confidence in some of their past launches, like BlackBerry 6. And with good reason. They were disappointments in many ways. Somehow this time I don't think we'll be disappointed with the product.
It could also mean they are finally willing to get more aggressive on marketing. We never saw much in the way of big bang marketing when Keith Pardy was the Chief Marketing Officer. I think that has a lot more to do with his falling out with Jim and Mike versus his skill set. He grabbed me (and most people I spoke to) as a fantastic talent, but unfortunately he just didn't mesh with the old guard at RIM.
I don't think Super Bowl advertising would happen if Frank Boulben, Thorsten Heins and the Board were not all the same page. I think we can safely say that BlackBerry taking aggressive steps to advertise to a huge audience like this means that the CEO and CMO are in alignment. That's a good thing.
Now what about the value of the ad itself? It averages 111 million viewers, according to Nielsen. Commercials are often about creating product awareness rather than direct marketing, which comes with a strong call to action like "Click here to buy the new BlackBerry 10 now!" So it's harder to measure performance on commercials compared to online advertising. But let's say, pessimistically, that 0.1% of viewers end up loving the commercial and it drives them to actually go out and buy a BlackBerry. Let's assume these are people who wouldn't have done so otherwise.
That's 111,000 new customers. If RIM makes a 30% gross margin on a $500 device, that's $150 per device in contribution margin to the bottom line, or $16.65 million in total contribution from the campaign.
I have no idea if these estimates are actually reasonable. But they don't seem insane to me, and I think it says that the return on investment for this commercial has a pretty good chance of being highly positive.
Beyond direct ROI, perhaps what's even more important at this stage in the game is changing the perceptions towards BlackBerry, especially in the United States where the brand has suffered the most damage over the past two years. This is BlackBerry's chance to say we're back in a BIG way. Marketing can make an impact, and a well-executed commercial showing off a compelling new product has the ability to change perceptions fast.
I can't wait to see the commercial!