Miracle Sales, Get a Halo

It seems like every bus shelter you pass features a back-lit silhouette of a dancing girl or boy with wires coming out of their ears. You don't have to read the logo to know that it's another ad for iPod. But did you know that the ad is doing wonders for Apple PCs?

Yes, buying a music box for your leisure also generates sales for computers in the office. And they spend a tiny fraction promoting the computers compared to what they spend on the players. How does this work? It's called the 'halo effect'.

American marketer Al Ries, the guru of 'positioning', has been writing and talking about the halo effect lately, but itís no new invention. You could use 'lead with your best foot' or 'play your strongest suit' to describe the phenomenon.

In the case of Apple, the iPod has been Eldorado. It's difficult to distinguish the Australian figures but they are likely to have done as well as in the US, where sales went up by 68 percent in 2005. Better still, profits were up 384 percent, and the stock was up 177 percent, which would make the shareholders very happy. Yet iPod and iTunes only account for 39 percent of the company's sales. What happened? They all flourished under the glow of the halo effect.

The trick is, you put the bulk of your budget into promoting the "sexy" product - here it's the iPod - so that you can't move without seeing it on TV, billboards, magazines and PR. You don't have to devote much to the other brands because, so long as they are clearly seen to be related, they will be pulled along under the leader's halo.

LEADERSHIP BY COFFEE JAR

Supermarkets have been doing this for years. In their case it's called 'loss leaders'. Every week newspapers and TV programs feature jars of coffee or trays of steak or bottles of shampoo at incredibly low prices, sometimes at less than wholesale price.

The customer is pulled in but you don't visit a supermarket just for a jar of coffee and tonight's steak. So you end up with a trolley full of groceries at the check-out. Not all of those goods are heavily discounted. You might want another brand of shampoo - and later discover it was cheaper at the chemist's.

TV networks depend on the halo. This is why the evening news is so important and so fiercely contested. Once Mum and Dad settle down with their dinner tray on their lap to watch the news, the chances are that they don't bother to change channels for the rest of the night.

This is what hurt Nine when they lost their News leadership, and why Eddie Maguire was willing to pay over a million bucks to get the Tasmanian miners into the studio. It wasn't for just one show, it was to win the audience for the rest of the evening and hopefully the season.