Wednesday, April 30, 2008

Media as the New Creative

That’s an interesting and provocative phrase. I’ve seen it a few times, but it really struck me when I saw it as one of the key trends in The Marketing & Media Ecosystem 2010 study done by Booz Allen for a group of advertising organizations. I referenced this survey of 250 marketers in an earlier post, but wanted to think more about their trends, especially the media issue. The trends are:
•Marketing as Conversation
•Media: The New “Creative”
•Marketing + Math
•Mind the Gap (between customer use of and marketing spending in the new media)
•The “Digitally Savvy” Organization
•The Network Effect (magnified by social networks)

All are of critical importance, but what do we really mean by media as the new creative? One thing that is apparent is that we’re at the end of the era of simply pushing content out to the user—by traditional media like TV or even by permission-based but irrelevant email. Chosen content needs to be pulled through to the user—think RSS feeds, widgets, Facebook apps and more.

Distribution of content has become the central focus for marketers who need to reach many different target audiences, for example young audiences and mobile audiences. The old media choices are not relevant to these two audiences. Which of the new media choices reach them? In what kinds of situations? Do they want marketer-initiated communications? If so, what kind? How do they want to access communications?

A slideshow has recently been posted that makes additional points. One is that advertisers are looking for media partners to the detriment of traditional agencies. Another that underscores the importance of this issue is that marketers defined as leaders are significantly more likely to be concerned about issues of brand community and to be hiring communications planners to help them navigate their way through the ecosystem of communications channels decisions I’ve just suggested.

While researching this topic I came across a posting in an Australian media blog with a checklist for marketers as they deal with social media. #9 especially caught my attention:

9. Treat social media as a communications conduit to your audience and a very important extension of the business.

That is a good perspective. It is “marketing as conversation.” It is communicating with customers and potential customers in their own terms, on their own turfs. It is engaging with them in an ongoing dialog.

The Booz Allen study summarizes its findings as follows:

The challenges are clear!
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Monday, April 28, 2008

Are Social Media Metrics the Future?

I’ve long been an admirer of Tesco’s Clubcard CRM program. A student recently brought to my attention an article in British publication Marketing Week that makes a larger and more important point; thanks Alisa.

If you’re not familiar with the story the Tesco Clubcard started well over a decade ago. Under the guidance of the Dunnhumby agency Tesco has expanded its offerings from simple conveniences like paying your utility bills at the store (and later on the website) to a wide product portfolio with heavy emphasis on financial services. In 2006 the Financial Times said Clubcard had over 13 million members in over a dozen countries around the globe. Some have been members for many years—consider the wealth of data Tesco has about them! It uses the data to personalize communications and offers for a huge number of subsegments. The original focus was on their quarterly Clubcard mailing; their website is now an important focus of marketing activities. Much of the information about the early days of the Tesco/Dunnhumbycollaboration has now disappeared off the web into a book, which is well worth reading, even if the Marketing Week article suggests that this is the past of customer data; other approaches are the future.

According to author Alan Mitchell:

Take Google as one example. With Google, individuals volunteer information about what they are interested in buying, and when they are interested in buying it. This provides data that Clubcard can never capture: before-the-event information about what somebody is planning to buy rather than after-the-event information about what they have bought. In marketing terms, that's nirvana - and Google is just the start.
Facebook and MySpace are other examples: individuals building profiles about themselves - personal databases - on a mass scale, to reveal information about their attitudes, preferences, circumstances, lifestyles and interests. No traditional market research or transaction-based database could ever match these personal databases once they reach maturity.

That’s not an entirely new revelation, but he says it better than most. And it’s pretty scary when you stop to consider it. Tesco’s Clubcard is best practices marketing because few, if any, other marketers have been able to emulate the scope of the data they collect or the marketing finesse with which they use it.

If the customer intent data that can be mined from social media is the future of metrics—and there’s a strong argument that it is—then most marketers are far behind the curve in terms of customer data capture and use.

It also suggests an interesting strategic question. If a marketer is behind the CRM data curve, should he try to leapfrog into the area of social media, skipping traditional CRM altogether? I don’t think so. Each is a different kind of data; each has its own uses, even though intent data may eventually turn out to be more powerful. What do you think?
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Friday, April 25, 2008

Customer Retention--How the Internet Has Changed It

Read the first installment (strategy) here.
Read the second installment (acquisition) here.
Read the third installment (conversion) here.

When I began to think about this series of posts, my initial reaction was that retention had changed less than acquisition and conversion. I like the Peppers and Rogers model of retention – Identify > Differentiate > Interact > Personalize. It’s a data-driven approach to retention and that’s as is should be.

Long before the Internet, marketers who were able to identify their end customers and obtain a mailing address for them sent retention mailings—letters, catalogs, and offers of all kinds. The main difference is that the Internet allows more marketers, especially traditional mass media marketers, to identify their customers and communicate with them.

I was half right. Or maybe I was right until social media burst upon the scene a year or two ago. With that the retention scene was changed just as radically—and as permanently—as acquisition and conversion.

First, there’s email. My sense is that most marketers are using it badly. We have an email list and we blast emails to it frequently. It’s cheap—so what if we only get a small open rate or smaller (and declining) click-through rate? It’s not hard to get an ROI that looks pretty good. We should be asking how it looks to our customers. Are we contacting them too often with communications of too little relevance? Do we need to go back to the chapter on Segmentation 101 and begin applying it to our electronic communications? It will take a bit more time and effort, and therefore will cost a bit more. Will it be worth it in terms of both conversions and—even more important over the long run—the image of and trust in our brands? Look in your own inbox, take a quick tally of how many commercial emails are really relevant to your needs, and answer the question for yourself.

Second, there’s social media in the broadest sense. It gives us opportunities to push content—in a totally permissioned environment—to customers. In the process, it also allows us to reach people who might become customers, but my sense is that most of the best marketer uses of social media are for customer retention.

This whole blog is about social media, so let me just give you two brief examples, both from one of my favorite best practices sites. National Geographic publications and broadcast long predate the Internet, but they moved onto it well and smoothly. Take a look at the site and see how well they do cross promotions.

But my examples are pushing content to users on other sites and pages, all in ways that drive people to the site. They always have a great selection of screen savers and I change mine often. I’d love to show you the current Madagascar hibiscus, but my desktop is too messy. What I can show you is the bar that remains at the bottom of my desktop page. That’s a constant reminder of who provided the lovely photograph that improves my pc experience and imprints the National Geographic brand in my mind.

Then there’s the widget I downloaded to another blog a couple of months ago. The Green Guide Tip of the Week widget is perfect for the “Living Green at Wellfleet Bay” blog. I had to cut the size down a bit to fit in the column, so it’s a bit

small, but it works. If you look carefully, you can see that there’s the tip itself and two more pieces of “green” content that would drive readers to the National Geographic site. What you can see is the large “Get This Widget” bar. It should be somewhere; it is one way to increase the distribution of the widget. However, it’s the largest item and it’s easy to mistake it for the content. When you click, you get HTML, which could be confusing to the non-Web 2.0-savy reader. Overall, it’s a great performance, though! Their newsletters are wonderful in terms of content, but I don’t get the sense that the content is personalized to my activities on their site.

We all need to do branding. That applies to current customers as well as prospects. We all want to bring users to our site. We want customers to return frequently to consume content, purchase goods—whatever our objectives are. We want non-customers to come to our site in a way that makes them prospects for conversion. Good Web 2.0 applications can do both, but I maintain that retention is usually the primary objective.

For retention to work we have to be present in customers’ lives in ways that are non-intrusive but that support their needs and lifestyles. We have a lot to learn, a lot to experiment with, to make that happen. I suggest that Web 2.0 applications are a great way to accomplish retention in ways that are welcomed by our customers.
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Thursday, April 24, 2008

TouchLocal Reaches Out

A few weeks ago I wrote about UK site TouchLocal that was offering Internet users a trusted environment in which to exchange information and search for local businesses. Today I got an email from them. This is only the first or second I’ve gotten; they definitely aren’t pestering me. But they clearly are reaching out to encourage users to write reviews of local businesses. As you can see from their advertising page, they are also working to get local businesses to add their listings. That’s not an easy thing to do if my local area is an example of local business use of the web—and I suspect it is.

So reaching out for reviews is a nice thing to do. Is it worth a couple of airline tickets? Two recent studies suggest that it is. The first, reported in Marketing Charts, indicates that product recommendations/reviews are the most important issue in bringing customers back to a retail site. The passivity is also evident here; US users seem to be more interested in reading the reviews others have written than in writing their own reviews. Interesting. Even more interesting is the age and gender differences seen in the study results:

•Fully 41% of those age 18-24, the prime demographic for the social web, say they’re most likely to return to a site that makes recommendations. Only 29% of those 55-64 say so.
•Women are far more likely to be influenced by a welcome greeting - with 20% saying it’s the feature most likely to get them to return, compared with 12% of men.
•The older you are, the more you want to give feedback: The upper three age groups were more likely than the bottom three to say that a site that solicits their feedback is most likely to make them return.
•A few groups went against the overall trend by not selecting “recommendations” as their No. 1 choice: non-whites (they chose both “unique experience” and “feedback” ahead of recommendations), those with post-grad education (”unique experience” was slightly higher), and those with incomes under $25K (first choice was the “welcome”).
•There’s a wide gap between the lowest-income bracket and all others:
oOnly 26% of those who earn less than $25,000 per year chose “recommendations,” 10 percentage points below all other income categories.
oRespondents in the lowest income bracket were far more likely to prefer a “welcome” - 27% said it was the feature most likely to make them return, at least 13 percentage points higher than the other income categories (14% of those earning $25K-$50K and those earning $75K+, and 12% of those earning $50K-$75K agreed).
“The economy is fragile and the competition for the consumer dollar is fierce, but as these findings make abundantly clear, online commerce is now a two-way street - and retailers need to embrace that reality,” said Jason Meugniot, Guidance president and CEO.

Another confirmation comes from a Forrester study via eMarketer. Once again product reviews top the list, even more desirable than special offers or price comparison tools. Similarly, the ability to upload one’s own content is at the bottom of the list.

My own experience suggests that just making it easy for users to contribute may not generate much activity—especially the older and the more upscale your target audience is. The TouchLocal contest is one way—a relatively expensive one!--to reach out. I wonder what else can be used to motivate the passive viewers to become active contributors. Any ideas?
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Wednesday, April 23, 2008

Are There Cultural Differences in Social Media Use?

Universal McCann recently released its Wave 3 study of Internet use trends in various countries around the globe. It should be required reading for all marketers. Here are their summaries of major findings

AdWeek headlined its report by saying that US users are laggards in social media creation. That’s what the stats say on the surface, but there are more fundamental issues that need to be probed. Remember the Forrester ladder on which a majority of US users were Inactives or Spectators when it came to social media? The issue is whether we’ll stay where we are or climb the ladder. I think at least some of us will move up into more active segments, but the UMC study suggests that there are major cultural differences.

The AdWeek report quotes UMC executives as follows:

"By and large, in the U.S. we're a country of voyeurs," said David Cohen, U.S. director of digital communications at Universal McCann, which conducted the study. "We love to watch and consume content created by others, but there's a fairly small group that are doing that creation -- unlike China, which is a country of creators."

Tom Smith, a research manager for the EMEA region at UM, said the gulf exists because blogs play a different role in the societies. In China, for instance, blogs tend to be about daily life rather than current affairs.

Why the differences? I’m not a China expert, but I do know that many families are separated by work requirements. The report finds that most blogging globally is about personal and family activities—your own family or your friends, and that fits the situation in China. The third largest blog content category globally is news and current affairs, and that has to be difficult in China.

I suggest that there are political differences as well as cultural differences that affect participation in and content development for all types of social media. Finally, there are platform differences across regions and countries. Is that the result of first-mover advantage in different countries or is it platforms that are better suited to conditions in individual areas? Marketers should ask.

Social media is truly a global phenomenon, but its use and development is going to be different in various markets. Marketers beware!

Monday, April 21, 2008

Avatar Wrap Party

A couple of weeks ago I wrote about Cathy Taylor’s experiment with the Burn Alter Ego campaign in Europe. She wrapped it up on Friday and I wanted to close the loop. Her participants identified three major problems; probably some of you—like me—just took a look at the Facebook page and said either, “Not me,” or “Too much trouble,” so the reactions of the people who played along are instructive. However, most of us aren’t part of the target market, and we’ve got to be careful about that. According to Stanford Green of Coke Europe, Burn is a drink for people who haven’t yet launched their professional careers. He says that, “Burn is a nightlife drink.” Yep, that’s not me.

The three problems identified were:
•Technical—the slow loading interface. Apparently anything faster would have seriously pixilated the image.
•Interactivity—some of the participants didn’t like the fact that the night life experiences were “prepackaged,” not of their own choosing.
•Blatant Salesmanship—avatars explicitly promote Burn in various ways.

One young professional—Ellen Kelly of Peculiar Productions—gave it high marks:

"I loved that you could completely customize the avatar, environment, and so on. And the random stories people came up with… hilarious! I think there are a few tweaks that need to be ironed out, but overall it's an interesting application. My coworkers loved it too, especially the designers."

One of the comments on the Social Media Insider blog gave a link to a post “10 Facebook Applications that Don’t Suck.” It’s well worth looking at to see the kinds of fairly practical, “useful-in-my-daily-life” sort of applications referenced. It’s also instructive that most of them don’t have a huge number of daily users. But that’s probably not the right issue. Presumably it should not be just the number, but how well users reflect the target audience for the sponsoring brand, how often they use the app, whether there is any brand conversion, and whether use of the app affects brand image. We probably have to get past sheer numbers to understand the usefulness of Facebook apps and other widgets and that’s going to take continuing thoughtful development of metrics.

But it was a great experiment! More of us ought to take part in some of these things, even if we feel a bit out of place, and try to develop a deeper understanding of what’s going on in social media space.
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Thursday, April 17, 2008

Social Media Participation

Charlene Li and Josh Bernoff recently published their segmentation of social media participation in their Groundswell Blog. I’m sure it’s also in the book, which is now available and I look forward to reading. (I saw a copy about a week ago, but the owner wouldn’t even let me hold it because he was afraid I would abscond with it!). I’m not a shill—I like their work and Forrester has admittedly been kind about letting me use material in my books through the years and I appreciate that.

But back to their Social Technographics ladder of participation, which does a good job of identifying segments. Not surprisingly, Inactives and Spectators make up over 80% of all Internet users. This is “new stuff” and most people are just interested in what’s going on.

I can support this through personal experience. I run a blog for a non-profit organization; the primary target audience is donors but we publicize it to all our members and it gets a lot of search traffic. So the majority of the regular readers are older, upscale adults. I’ve tried for over 2 years to make it an active, participative forum. I’ve explained how to comment, encouraged people to comment, asked questions and asked for people’s experiences in posts. When I’ve been with a group in person, I’ve encouraged them to contribute. Nada. I just can’t get them to contribute to the blog. They do email us and tell us how much they enjoy the blog and how useful they’ve found some of the posts!

So my point here would be twofold. First, this whole social media thing is in a very early evolutionary state. Some people will move up the ladder, and as marketers we can encourage them to participate in ways that will be mutually beneficial. I’m guessing that as time goes on and more companies join in, that encouraging participation will take more and more incentives, so I’d keep looking for what works, how much you have to spend, and how much ROI you get. Second is my hypothesis that a lot of individual people will stay on the bottom two rungs of the ladder permanently. The upper rungs will become more populated with younger demographics, but a lot of older Internet users will be happy to just observe.

The second point is to understand your segments. The chart that Charlene included in the original post makes the point that the segments do behave differently with regard to Internet activities and even brands chosen. Understanding where they are on the participation ladder is key to what social media activities you include in your marketing plans and how you execute them. So think carefully about your own target customers as you enter the brave new world of social marketing!
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Tuesday, April 15, 2008

Is Video a Maturing Market?

A report from Hitwise caught my eye today. Reporting on the video marketplace they find YouTube with a huge lead in market share and continuing growth, no surprise there. The surprises are two-fold: all the other leading properties had a decline in share and video sites overall lost share of total Internet visits. Their press release points out, though, that time spent by visitors increased during that period of time—March 07 through March 08.
That suggests some interesting hypotheses, so I went looking for data. YouTube is the 800-lb gorilla, but Gorilla Spot is a rapidly-growing newcomer (pun intended). As noted yesterday, Gorilla Spot is a “create/mashup your own” site. The press release mentions Hulu, the site for full-length TV programs. Here’s the growth comparison, and it may well suggest a change in viewing patterns.
Hulu is experiencing by far the fastest growth, although it should be noted that Gorilla Spot is so new it barely registers. Then add somewhat less recent data from the NYT that shows minutes spent, lots of them, on Hulu. It has quite a variety of video content, but if you watch, for example even a part of SNL, you’ve spent quite a few minutes.

I’ve seen the interpretation that this means that viewers are going more for expert/professionally-created content than for UGC. I don’t agree. It looks to me like time shifting—I missed SNL on Saturday night; I’ll watch it during the week when I have time. Gorilla Spot’s rapid growth supports that hypothesis.

But the larger hypothesis is a shift, if not yet a maturing, of the video market. It’s a shift of programming online—whether original content or access to content originally created for another channel. It does suggest, however, that viewers may well settle on a few key sites to satisfy their seemingly insatiable appetite for video of all kinds.
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Monday, April 14, 2008

FriendFeed--Another Approach to Social Media

It seems like a new approach to social media pops up every day. And for a lot of people that’s one of the problems; they have a lot of “stuff” scattered all over the web—how can they bring it together in a central space. Apps like Google’s OpenSocial are a somewhat “more formal” approach—one requiring developers to build the apps.

FriendFeed is a different animal. It’s a user-controlled site that lets users see what their friends are sharing on a large number of social sites. This video from Vator TV spends about the first 6 minutes on FriendFeed, the next 6 or so on a video mash-up site called Gorilla Spot, and the last 3 or so on new approaches to ad networks.

As I understand FriendFeed, the user sets up an account and chooses the sites she wants to share. It appears that, if the user chooses a public account, she gets access to all the items her friends share on each of the networks and they get access to hers. If the account is private, each friend must be separately identified. According to the FAQs page, “For most sites, all you need to provide FriendFeed is your username, and the FriendFeed crawler will automatically find and broadcast all of your public activity on that site.” To me, that’s another big “Ouch,” but once again, I’m not part of the target demographic.

It works with iGoogle and Facebook pages. Here’s the set of sites FriendFeed now accesses; wonder how many of them you and I recognize. Here’s a list, in case you need it.

A final thought. One of my students recently found a “social network fatigue” poll on PopGadget, the technology site for women. It’s hardly a representative sample, but the two competing explanations for why so many users are spending less time on social networks are interesting. The first is that users are simply getting bored/losing interest and spending less time. The second is that it’s just taking too much time to keep it all updated—hence sites like FriendFeed. I’d add a third possibility; users have settled down to just a few key sites—maybe just one, maybe two or three for different purposes—in order to manage their time. Personally, from what I see, I’d vote for my third option. What do you think?
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Friday, April 11, 2008

Does My Avatar Need a Night Out?

I’m bemused by the fact that I’m even asking that question—but it is Friday, after all! The avatar in question is the one I could create on the Burn Alter Ego application on Facebook. It’s a promotion for an energy drink that Coke is marketing in Europe. Like all these drinks, some of the contents, in addition to the huge jolt of caffeine and well-known ginsing, are a bit scary. However, the sleep-deprived young demographic has been consuming high-caffeine drinks for many years and no doubt will continue to do so.
The promotion is another Facebook app—does the parade ever end? Last week Media Post’s Cathy Taylor invited readers to sign up and give the application a workout. This week she reports that a fair number of people seem to have signed up to either participate or observe what happens. She’s soliciting comments and will write it up in her blog in a couple of weeks.

So here’s the application. You can create an avatar and send it to enjoy evenings out with other avatars and report back. Presumably you can meet some nice avatars that way. If you don’t want to play the game, there’s a video on the Facebook page that gives you a good sense of what it’s all about, and the video is worth looking at.

I’ve pointed out before that Coke has been experimenting in the social media space. One assumes that as they do so, they learn more about what works. The Burn Alter Ego isn’t my thing—but then I’m not part of the target market for the very-high-octane energy drinks. The young people who are the target market are also the ones who just might like to have a party avatar. I’d encourage you to keep an eye on this promotion and see where Coke goes with in, first in Europe and perhaps later in the US.
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Thursday, April 10, 2008

Social Networks and Marketing

Competitive intelligence firm Hitwise has just released a study that focuses on marketer use of social networks. It paints a picture of growing use, but a lot of hesitation seems to remain.

eMarketer (March 28, 2008) quoted a variety of reports that found anywhere from 1/5 to ½ of marketers using social networks—using them in some way or planning to use them in the future. The marketers who are actively using, benefitting from social networks still appears to be small. Marketers know that a lot of people (an increasing number of whom aremembers of older demographics) are visiting social networks, but most marketers are not clear on how they can use that traffic to their benefit.

The ones that are receiving significant incoming traffic from social networks are not a surprise. The young, who are still the majority of users, want the music and entertainment content, and marketers are using advertising, widgets and other techniques to bring content to their attention and drive them to websites. When you get past the entertainment and music categories, the industry sectors that are benefitting are interesting. The figures are the number of Facebook widgets available in that category--education (1,647), sports (1,971), and travel (556). Facebook doesn’t have shopping and health categories for their apps, but Eons, the social networking site for boomers has a health microsite with various features. As noted here recently shopping has its own set of social networks and they are active users of widgets and other networking tools that bring users to their sites.
The Hitwise report has numerous other examples of successful use of networking sites. In its advice to marketers, one item especially struck me:

Social networks will become a primary channel for targeted marketing – Social networks areincreasingly acting as a portal or entry point for many online activities, positioning them as thecentral hub for communication, alongside email and instant messaging. As social networks continue to grow in popularity, the behavioral activity fueling targeting purposes will also improve.

Social networks are the new portals for the young—think Facebook users for whom it is a hub for everything from news to email. As older folks join in, their role in both customer acquisition and retention will continue to grow.

Paul Gilpin, author of The New Influencers, has a post with the provocative title, “Five Stupid Reasons to Avoid Social Media.” I’d encourage you to read it and to think about whether any of these issues are holding your company back from participating in the social network movement.
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Wednesday, April 9, 2008

Make Way for the Mobisode

This is an intersection between video and mobile, with maybe a dash of reality TV thrown in. What it represents is short episodes specifically designed for viewing on mobile devices.Are people actually watching videos on their cell phones and PDA’s? Yes, according to newly-released data from Pew. When they asked about 10 activities beyond just talking on their phones, 77% of respondents said they had taken part in at least one of the activities at some time; 42% engaged in at least one activity on a given day. Text messages and taking pictures lead by a large margin, but watching videos is there. Given the absorption with all things video, one would expect that activity to continue to grow.

Assuming there is content designed for the small screen, that is. Sprint/CW/Warner Bros. TV have just announced a series of episodes made especially for mobile (mobisode) that will feature the Supergirl character from Smallville. It follows a successful series last year that featured the Green Arrow character from the same series.

In case you’re not a fan, Smallville is the story of young Clark Kent—before he became superman. It seems to have a robust cast of characters that should provide plenty of material for screens of all types.Overall, the service is a bit pricey, but it may be the wave of the future! Users want content, and they may even be willing to pay for entertaining games and videos. Spinning off short programming from successful longer series may be a reasonably low-risk way to penetrate this new and growing market.
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Tuesday, April 8, 2008

Auto Marketing Takes Sharp Web Turn

Auto makers all now have interactive websites that let prospective users examine and experience their models to some degree or another. Advertising also continues to move to the web. Just a few weeks ago GM let it be known that within three years fully half its advertising budget would be spend on the web (AdAge, March 17, 2008). Yesterday Chrysler announced that 29% of its budget for the new Journey would be spent on the web, with strong visitation numbers at the beginning of the launch.

It’s less of a surprise that BMW is spending half their budget for the US launch of their 1 Series on the Internet. BMW has been a leader in creative use of the web from the beginning with their BMW films series early in this decade followed by BMW comics. Their 1 Series is a lower-priced version aimed at a younger target market, so the emphasis makes sense. They cut their teeth on this type of strategy when they used the films to attract a younger, hipper audience. Now it’s an introductory video on YouTube. Take a look—it’s definitely not your father’s auto advertising!

Among other things, BMW is offering a Facebook app that will let users build their own BMW and send it to friends. Presumably that’s a repurposing of the functionality they have on the website. Makes sense to move it out onto the web where they can make it more visible, presumably by attaching it to advertising on Facebook and elsewhere on the web.

Another thing that isn’t new news is that young people spend most of their media time on the web, so that’s where you have to engage them. It takes integrated programs there, just like it’s always done in mass media. The difference is that we’re integrating a different set of tools; targeted online display ads, search advertising, microsites, videos, widgets and other specialized apps to name some of the main ones. Basic marketing principles still apply, but the execution is very different!
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Monday, April 7, 2008

Shopping is Now Social

Today’s eMarketer newsletter is about social shopping—a rapidly-growing phenomenon. The lead chart reminds us why it’s becoming so important. People have always placed a great deal of credibility in recommendations from their peers—that’s why WOM is so powerful. Social shopping is the electronic age manifestation. The article goes on to say that people contribute to social sites because they want to feel part of a community and they seek the recognition of their peers. I’d add that people simply want to help; they want to provide useful information to others who are engaged in the same activities/facing the same issues.

That being said, these sites have the potential to be incredibly volatile. I was under the impression that Kaboodle was the largest. According to the comparison I did on the Compete site, it has been left in the dust by a site called Pronto. The site attributes its explosive growth to the addition of social shopping tools, but it’s not clear why that has caused it to outdistance other social shopping sites that have similar functionality. My hypothesis is that it’s much more broadly based and therefore appeals to a larger audience. The diversity of search terms seems to bear that out.

Marketers need to use these sites by ensuring their products are listed and advertising on the sites. Pronto has a “certified merchant program.” The widgets available from Kaboodle let users make connections between things like their MySpace pages and the site. Are there partnership opportunities here?

Social shopping is another Web 2.0 feature that seems to be here to stay. Marketers, especially those whose target audience is young or family-oriented, need to be in the game.
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Friday, April 4, 2008

Conversion--How the Internet Has Changed It

Read Part 1 here.
Read Part 2 here.

There’s a simple answer to the question. Pre Internet, only B2B marketers and B2C marketers who sold multi-step products (think automobiles and life insurance, for example) had to engage in conversion marketing. Mass marketers acquired customers and perhaps they had retention programs, but most, especially consumer packaged goods marketers, didn’t have to do conversion marketing. How could they? They didn’t know who potential customers were, what they were interested in, and how to reach them. The web has changed that, dramatically and forever.

The direct marketing conversion process is still the basis. It is stated as Acquire > Qualify > Distribute > Follow Up. In direct marketing, especially B2B, distribution is especially important. Leads could be distributed to the field sales force (high cost), to an internal sales force (moderate cost), or to non-personal, usually mail, follow up (low cost). Then there were two remaining challenges. One was to nurture leads until they were at a high readiness state and then forward them to the field sales force for closure. The other was to motivate the field sales force to follow up leads. Those issues still exist, but the larger challenge for all marketers is using the Internet, especially the website, effectively in the conversion process.

The conversion process (and the retention process also) will be more effective if acquisition has been well done. That means acquiring high-potential customers, not necessarily acquiring the most customers. Successful acquisition requires targeting, as discussed in the previous post. Unless people stumble onto your website by accident, they are coming in from advertising or some other online (or offline) content. Don’t just dump them onto a home page and hope they’ll find what they need. If you can simply drive them to a product page with no chance of confusion in what they are looking for, that’s great. Often that’s not the case, and even if it is, it risks visitors taking a look and leaving without giving you a chance to capture an email address. That is an important function of a landing page. A good landing page is also promotional and moves visitors a step further in the direction of purchase.

Once the visitor moves off the landing page onto the site, the question becomes how to move the person through the site, resulting in an eventual purchase—whether that takes one visit or many. It is very useful to study the paths visitors take through your site and to try to understand what pages are moving them closer to purchase, which pages are not, and where they are leaving only to return later, and where they are abandoning for good. Commercial metrics services provide path data. They can also help you segment both identified and anonymous visitors. Different segments are likely to follow different paths and are almost certain to convert at different rates.

To help understand segments, it is helpful to create personas. Personas can be thought of as a way to put some human flesh on your segments. They help everyone from web designers to marketers develop approaches that work for each segment. Staples redesigned its site around personas. Best Buy (item 1, item 2) has used them both in site development and in developing concept retail stores.

Whatever else you do, keep in mind that most visitors don’t purchase in a single session. Metrics guru Avinash Kaushik recommends measuring “days to purchase” and “trips to purchase.” With that data in hand you can develop a meaningful contact program. That may include offering a carefully-timed incentive to close the final sale. At that point the visitor officially becomes a customer, part of your retention program.

Think carefully about what “conversion” is in your particular situation. It is always desirable to be able to track a visitor from the first contact through to a final sale. If all the activity occurs online, that’s possible. If conversion occurs offline, it can be difficult, and you may want to establish a number of metrics mileposts on the way to final conversion.

Acquisition costs a lot of money. A well thought out conversion strategy is the first step to ensuring that money has been well spent.
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Thursday, April 3, 2008

More Virtual Worlds for Children

The annual virtual worlds conference is taking place in NYC today and tomorrow. Just a list of the speakers is instructive; there are a lot of major brands that are becoming players in the virtual worlds space.

The announcement that caught my eye was from Nickelodeon. They’re planning more virtual worlds to join Nicktropolis, now about a year old. They include the popular SpongeBob SquarePants, which will delight my grandson! More to the point, if you look at the comparative site statistics for the Disney Virtual Kingdom and Nicktropolis (both of which are relatively generic), versus the Barbie World, the wisdom of building a virtual world around a more targeted brand seems evident.

Virtual worlds have taken a lot of hits lately, but they seem to be here to stay, especially for the young crowd that likes to spend time playing games and communicating with a network of friends.

A couple of questions. First, is there a strong first mover advantage here? Even for kids there are a limited number of sites that they are going to patronize at any given time. The real question is, “Will they be loyal?” Kids? I think not. If their friends are suddenly all over a new site with cooler stuff, they’ll leave for the new one.

Second, when is a brand franchise strong enough to warrant this type of investment? Barbie seems obvious. SpongeBob may be also. But again, how many, how strong? And how do you keep the virtual worlds vibrant?

These are truly brave new worlds--watch for further bulletins from this space!
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Wednesday, April 2, 2008

A Social Network for Mobile

An AdAge story on Monday announced that CBS was partnering with social network Loopt on a location-based advertising program. According to AdAge, this is the way it would work:

First, a Loopt subscriber must turn on the phone's locator button, which broadcasts its location. (Even without a GPS, the location can be approximated based the phone's relationship to the cellphone tower receiving its signal.) Then when the subscriber checks the mobile-web version of CBS News, MarketWatch or Sportsline, the page will display a banner ad targeted based on the subscriber's location.

Ads are on our mobile phones, as you probably already have experienced. eMarketer (newsletter MARCH 7, 2008) quotes a Nielsen Mobile study released in March that found that 23% of mobile phone users had seen an ad in the last 30 days; the figure was 46% for users aged 13 – 17—no surprise there! What may be more surprising—and what we might take with a tiny grain of salt—is the fact that 32% of mobile data users said they were willing to accept ads if it lowered their bill and 13% were willing to accept ads just to improve content.

So if ads are at least marginally acceptable on mobile phones, are social networks going to be a way to deliver them? Both Newsday (US) and the New York Times (Paris bureau) have recently reported that there are many mobile social network providers. Some of them are the usual suspects—Facebook and MySpace and the ubiquitous Twitter. It’s interesting to look at the mobile page on MySpace, which until recently has had a closed platform, vs. Facebook where there are over 300 mobile apps from providers including Loopt.

Loopt is a good example of the functionality. They describe it as “Connect, Share, and Explore” and when you get further into the site they add “Control.” The functionality is pretty straightforward and they have a brief but informative tour. Friends on the network can connect with one another; through GPS technology you are notified when a friend is in the area. Do you want maps showing you what friends are in the same area? Do you want to know what they are doing at the moment? Do you want to send instant messages with your location automatically attached? Do you want to look into your friend’s journals (or more likely, do you want them looking into yours?) to find new places and events? If you’re in my generation, the answer to a lot of these questions may be a resounding “NO,” but as least you are glad to know that you can hide your location from everyone or your can select the friends you want to share with.

Do younger users want this functionality? You bet they do! I’ve had students proposing business concepts and developing cool marketing plans for network- and location-based mobile services for years. Their peers are engaged by the concepts.

As usual, the mobile applications are further advanced in Europe and the Pacific Rim than in the US. Marketers need to be constantly alert for what is going on there and learn from their leadership. It also seems clear that the market is seriously overcrowded with providers, so marketers will need to choose their opportunities and perhaps to hedge their bets. They also need to be on the lookout for unintended consequences. Trucks keep running into the low bridges on Storrow Drive in Boston because they are looking at GPS directions, not the signs that say very clearly, “No Trucks.”

But all of that begs the most important question of all when it comes to mobile. Is the issue getting customers to accept our ads on their mobile devices? Or is it finding out how to offer meaningful branded content on mobile devices? Is there a generic answer to that question, or does it depend on your target audience? Past data has shown younger people more willing to accept ads for freebies.

Only a lot of testing and experimentation will tell! Hopefully the results of the CBS test will be known and it will give us all some signposts in this important journey.
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Tuesday, April 1, 2008

Social Networks and Political News

Last week I noticed an interesting article on the front page of the New York Times plus some interesting commentary from Steve Rosenbaum in the OnMedia blog. The Pew Internet and American Life Project also has interesting recent data on political information sources. Put together, they provide an interesting perspective.

We know that young people get a lot of their news from the Internet instead of from traditional media. According to Pew 42 % of people 18 to 29 say they regularly get news about the campaign from the Internet. That’s up from 20% in 2004. Now we are getting insights into how they use it.

Here’s a summary of what’s emerging:

•Young people post on MySpace and Facebook pages. When I searched for widgets for the two democratic candidates, I got over 500,000 hits, some of which are discussion, some of which are actual widgets. There are not quite as many for John McCain, but there are plenty. CBS News seems to be especially aggressive in creating news widgets that connect people with their content. The McCain widget is from CBS news. I found the Clinton widget on Yahoo!; it is from a suite of political widgets from NBC Universal. I found the Obama widget on an Apple site; it appears to be from a private developer. News organizations are catching on and networks and platforms want to be sure they’re not left out•As the NYT article points out, they also pass it on to their friends by email and IM. Perhaps even more important, they tend to go direct to the source—a video of a speech, for example. Is it worrisome that they are missing the context and interpretation that journalists provide?
•Finally, the Medill News Service at Northwestern University points out that political activity or extreme sentiments on the Internet can affect future job prospects. Students already know that potential employeers are searching Facebook and MySpace pages. Will this put a damper on political expression?

The political consequences of this activity and the political involvement it signifies are enormous. What are the take-aways for business?

One is not very new. If we haven’t already, we have to change the way we are reaching our audiences, especially if they are Gen X, Y or Z. A widely-repeated quote captures that well: “We’re talking about a generation that doesn’t just like seeing the video in addition to the story — they expect it,” said Danny Shea, 23, the associate media editor for The Huffington Post. “And they’ll find it elsewhere if you don’t give it to them, and then that’s the link that’s going to be passed around over e-mail and instant message.”

An even more provocative view is that they want the original, unedited information. Then they will share it or transform it using their own tools. That provides support for the multitude of video contests we find all over the web, but may be a superficial manifestation. How can we really work with customers to develop compelling messages?

There’s probably no single best answer to that question. However, it may be the question that we need to keep in the forefront of our marketing and communications strategy development.
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