Weatherbill inside.

Intel changed the paradigm of how microprocessors were sold with their 1991 “Intel Inside” campaign:

A second issue was that the processor, although a key component of personal computers, was only a component. To effectively market this component to the PC buyer it was important to work with the manufacturer of computers. After all, the processor was buried deep inside the computer and despite its significance it was hard to tell which processor the PC contained before it was purchased.

Carter and his team studied successful consumer marketing techniques and examined tactics used by well-known companies supplying a component or ingredient of a finished product, like NutraSweet™, Teflon™ and Dolby™. They also began a variety of marketing experiments and soon began envisioning how a branded ingredient program would play out in the computer industry.

Key to this strategy was gaining consumer’s confidence in Intel as a brand and demonstrating the value of buying a microprocessor from the industry’s leading company, the pioneer of the microprocessor. At the suggestion of its advertising agency, Dahlin Smith and White, Intel adopted a new tag line for their advertising: “Intel. The computer inside.” Using this to position the important role of the processor and at the same time associating Intel with “safety,” “leading technology” and “reliability,” the company’s following-and consumer confidence-would hopefully soar. That would create a new “pull” for Intel-based PCs. Later, this tagline was shortened to “Intel Inside.”

The important role of the microprocessor was being communicated, but to be truly effective the ingredient status of the microprocessor needed to be dealt with. In 1991 Carter launched the Intel Inside® coop marketing program. The heart of the program was an incentive-based cooperative advertising program. Intel would create a co-op fund where it would take a percentage of the purchase price of processors and put it in a pool for advertising funds. Available to all computer makers, it offered to cooperatively share advertising costs for PC print ads that included the Intel logo. The benefits were clear. Adding the Intel logo not only made the OEM’s advertising dollar stretch farther, but it also conveyed an assurance that their systems were powered by the latest technology. The program launched in July 1991. By the end of that year, 300 PC OEMs had signed on to support the program.

The PC business ultimately was redefined by this – moving to a barbell of high volume commoditized assemblers/distributors (Dell) and high value specialist niche players (Alienware) and of course the fully integrated hardware/software approach of Apple. The same thing will happen in financial services over the next 10-20 years. Only the ‘Intel inside’ isn’t hardware (except maybe for some high end high frequency trading applications where I think you’ll see people starting to design and sell custom chipsets…) but financial widget providers. FaaS or Haas or RMaaS. (For the few remaining bankers that read my blog and are scratching their heads, these are not tickers or Bloomberg functions – or if they are that’s not what I’m referring to – but acronyms for Finance or Hedging or Risk Management ‘as a Service’…) These will in turn get mashed up by enterprising distributors and channel managers to offer all sort of customer (from the head to the tail) the package of financial services and products that is right for them. This is what the mega-fauna of global finance (retail, commercial and investment banks in particular but also life and property insurance companies, brokers, asset managers, etc.) do now, in house, although the concept of “open architecture” on a fund management platform for example is a sort of distant evolutionary predecessor.

A more apt existing business model along these lines – that practitioners in the retail trading and FX markets will be particularly familiar with – is white labeling. Indeed companies like Saxo Bank have done extremely well with very sophisticated and industrialized white label partnership programs. You want to offer your customers trading on FX, FX Options, Forwards, Spot Gold & Silver, CFDs, Stocks, Futures, etc? Just plug into their machine and you’ve got yourself a trading engine and infrastructure. You want to offer your customers weather insurance? No problem – just grab Weatherbill’s new white label solution:

The WeatherBill White Label platform enables any third party to offer weather coverage to their clients, written on their paper, and using their distribution channels. It is an innovative end-to-end technology platform for pricing, transacting, settling, and managing weather risk. WeatherBill White Label creates new revenue streams and growth opportunities for insurance companies and weather derivative dealers, allowing them to leverage WeatherBill’s technology to offer fully automated, customizable weather coverage to their clients.

For any company who has customers that could use weather insurance in the context of their relationship with this company, this would seem to be a no-brainer; you don’t need to re-invent the wheel, weather algorithms and derivatives processing are probably not your core business and/or is not where you want to deploy resources. Outsource it. Add a plug-in. Did you write your own mapping software to show where your offices are on your ‘Contact Us’ page? No, you used Google or Multimap etc. and integrated it into your site and/or your service. It’s as simple as that, and makes just as much sense.

Financial mash-ups and FaaS. It’s just the start…

Related articles by Zemanta

• WeatherBill Offers White Label Platform to Weather Insurance & Weather Derivative Providers (newswire.ca)
• Previous Weatherbill Posts (parkparadigm.com)
• WeatherBill predicts bright future in weather insurance (venturebeat.com)
• Weatherbill to offer ‘white label’ weather derivatives and insurance platform (artemis.bm)

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