OpenSocial Attracts "Friends"

When Google’s OpenSocial debuted in November of last year it attracted a lot of attention. It was positioned as Google’s answer to Facebook’s open platform. When I wrote about the social graph and related apps in February I noted that Facebook had over 15,000 apps that members could use on Facebook or sites. When I looked today, it had over 20,000. The industry quickly realized that Facebook was onto something when it opened its platform to developers so they could write these apps. Google was not to be left behind.

Just before OpenSocial debuted in November, Michael Arrington wrote a post on TechCrunch that proved to be prophetic:

Facebook has a platform to allow third parties to build applications on Facebook itself. But what Google may be planning is significantly more open - allowing third parties to both push and pull data, into and out of Google and non-Google applications.
In the long run, Google seems to be planning to add a social layer on top of the entire suite of Google services, with Orkut as their initial main source of social graph information and, as I said above, possibly adding third party networks to the back end as well. Social networks would have little choice but to participate to get additional distribution and attention.

Given the incredible success of the Facebook open platform, it was big news on Tuesday when Yahoo! and MySpace opted to join Google’s initiative, forming the OpenSocial Foundation. Several smaller networks had already signed on.

A lot of this is written for developers who have to do the work of creating the apps. It isn’t DIY for most of us. What does it actually mean to marketers? Charlene Li of Forrester has a graphic that portrays it well.
She calls it ‘relationship mapping” and explains that the technology will help us keep track of all our important relationships. Now we have them in separate places. The social networking APIs will help us to organize them in a single repository. According to Google, developers “can create apps with OpenSocial that access a social network's friends and update feeds.” In plain terms, organize them all in one place and keep them up to date. I haven’t seen any mention of Charlene’s vision that they could monitor frequency of use and regulate access, but Facebook’s open platform and OpenSocial are first steps. Who knows what will follow?

And that’s what marketers need to think about. This suggests both convenience and loss of privacy for the user. It also makes it possible that one of your network “friends” could use an app that accesses data in a way that you didn’t/wouldn’t approve. However, the fact that you are connected on the network gives her app access to your data.

I suggest that there are two issues. The first is that this particular horse is already out of the barn. User agreements like Facebooks already make that sort of data sharing possible. The second is that most users, even young sophisticates, don’t seem to really understand that. What will they say when they do?
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TV Commercials on Facebook?

I’ve been conflicted about this subject for awhile. I don’t go to Facebook for commercials, but I do go to YouTube. I love being able to play ads in class. Imagine being able to show a class of Vietnamese marketers ads from around the globe. So, wherever I am and whatever marketing subject I’m teaching, I love to be able to find ads on the net. What I wonder is, “Does anyone else?”

Josh Bernoff of Forrester pretty much agrees that people don’t generally care to watch ads. Why should they watch them on the Internet when they change channels on TV? There are a few exceptions—remember the Cadbury gorilla?

Note the ad on the screen capture then view the video here.

That essentially confirms Bernoff’s point—people don’t watch ads unless they are really special. But they do watch videos; we know they are doing that in large numbers. Here’s a list of the examples he mentions in the video:

•Blendtec. People enjoy a light-hearted look at products.
•RayBan. It’s just plain funny. Note it has spawned others.
•Dove Evolution. I’ve written about the Dove Campaign for Real Beauty before. It’s a wonderful integrated campaign.
•TIBCO. If you don’t look at any of the others, look at this. I apologize for not beliving that software engineers can have a sense of humor. They’ve created a whole world for this little guy!

Three of the four I found on YouTube. Each of the brands has created its own “channel”—essentially its own page on YouTube. TIBCO couldn’t have done what they have by just posting on YouTube; they needed a microsite. I was interested to see that Beet.tv, a video site, had its own channel on YouTube.

Here’s a bit more advice, quite accidentally from another Forrester consultant. Jeremiah Owyang created a corporate Facebook page for his brand—his Web Strategy blog. Then he took a small amount of advertising to promote it. The results weren’t overwhelming, but it worked. It's a great example of a social network marketing experiment that cost only $20 and some of Jeremiah's sleep time. Here’s his latest post on corporate Facebook efforts and if you search his blog you’ll find more. Thanks, Jeremiah!

The message? Well thought out campaigns on Facebook (or other social networks) can work. Engaging videos will be viewed. But only advertising instructors are likely to thank you for posting your run-of-the-mill commercials on the web!
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Men, Women and Online Activity

Remember when the Internet was the playground of men -- mostly young and geeky? eMarketer reported yesterday (enewsletter, March 24) that not only is “young and geeky” no longer true—men isn’t either. Their stats say that more women than men go online at least a month, with women constituting 51.8% of users and men being 48%.

They attribute this change in Internet demographics to the fact that there are more women in the US than men—roughly 51% to 49% according to Census figures. The second reason is the frenetic activity of female teenagers on the web. I’d add a third reason—the important family-related Internet uses of women, especially working women.

The teenage girls rationale is on target, according to Pew. In a study of how teenagers use social networking sites, they found teen girls more likely to create profiles. The difference becomes huge when you look at girls vs. boys in the 15-17 age group.


What about their older female counterparts? E-Tailing.com quotes other eMarketer statistics that show women heavily favoring the Internet for research before they buy. Women also frequently consult the Internet for health-related information. The iHealthBeat blog quotes comScore data that shows the Internet to be second only to medical professionals when women seek health information.

One of comScore’s fastest-growing web properties of 2007 was Everyday Health, with a growth rate of 349%. That made it the third largest online destination for women. Comscore adds that, “Women’s category leader, Glam Media, grew 213 percent during the year, due in large part to the addition of several new entities, including Quality Health Network, MyYearbook.com, and LifeScript.com, among others.”

Women are online in large numbers. The teenage demographic is certainly not to be overlooked, but it is older women who are researching and shopping for products and services that enhance their own well being and that of their families.
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Niche Social Networks for Professionals

It had to happen. Social networks are going professional. Not new news, you say? Most of us are on business/professional networks like LinkedIn. Others may participate in local interest groups formed on Meetup to talk about things from automobiles to pets to work and career.

But that’s not what I have in mind. One of my students recently pointed out that there’s a new network for physicians with an interesting business model. Sermo.com offers physicians a space where they can anonymously discuss clinical issues. It doesn’t charge them and it doesn’t accept advertising. According to the WSJonline:

Revenue comes from advertising or charging outside businesses access to data and member discussions. For example, Sermo Inc. of Cambridge, Mass., generally charges $100,000 to $150,000 a year to nonmedical businesses like hedge funds, which use it to research such things as how doctors feel about new drugs. They can monitor online discussions, with the doctors' names omitted, or see a tally of topics being discussed on the site -- like a new medical device or a controversial cancer treatment -- to determine what's rising or falling in popularity. That’s an interesting business model. I started looking around to see if there were similar networks for other professions besides the ones listed in the WSJ article. I found:
•The Lawyers Network, still in private beta. It offers connections via profiles, a directory of legal firms and legal content. It’s not clear what the revenue model is.
•Zolve Real Estate Network focuses on a global referral system. Membership is free. It charges a one-time fee of $40 for the first lead from the system that is closed.
•Student Dentist aptly identifies its target audience. It was built on the Ning platform, apparently by a dental student. If you look at the site you see a number of Facebook-like elements, including the ability to add it to your Facebook page or to get a Student Dentist badge (widget) for your website or page. This site has advertising.

I’m sure there are more, but this gives you the idea. People like to interact with others who have similar interests. When a network can professional development, contacts and content in a defined space, it has an opportunity to become attractive, even to busy professionals. There’s an NPR Talk of the Nation segment from last July that has several good perspectives on niche networks. The first 7 or 8 minutes is a particularly good introduction for the newcomer to social networks.

These professionals, however, are not likely to be willing to pay much, or perhaps anything at all for membership in a network. This appears to be a space in search of a workable revenue model that doesn’t include advertising. It will be interesting to watch it evolve—maybe to participate—maybe to build your own targeted social network!
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Bob Iger's Igloo and Other Kid's Resources

Disney CEO Bob Iger was recently interviewed about the corporation’s digital strategy. The clip runs about 6 minutes and covers a range of topics, but the emphasis is on what they are doing in the children’s marketspace. He points out that the Internet is not just a Gen X/Gen Y phenomenon; young children also find the web fascinating.View the video here.

Disney has been active in the preteen Internet space in ways other than just promoting their theme parks and movies. Iger believes that children are turning to the web first instead of to television, and Disney must be there. They are. Just last year they acquired Club Penguin and launched Fairies, both virtual worlds aimed at preteens. According to the Gamine Expedition blog, the Fairies virtual world had 5 million fairy avatars last month. The blog post also has a list of the “clickables” toys that are a feature of the site. The Fairies world for little girls will soon be followed by a Radiator Springs world for little boys. In case you’ve been living on another planet, Radiator Springs is the mythical home of Pixar’s Cars characters, around which a whole industry has grown up.

Disney is not alone in recognizing the importance of interactive and social sites for children. AOL recently relaunched its KOL site in partnership with National Geographic, which has a wonderful children’s site. Note an important difference. The older sites are interactive and engaging. Disney is moving into virtual worlds where children can establish their own space, create avatars, and generally move in and take up virtual residence.

In fact, Bob Iger has his own igloo on Club Penguin. No, he won’t divulge the address, but he says it has amenities like a plasma TV and a basketball hoop. Assuming that he does hang out there occasionally, it’s a good way to add to understanding of an increasingly important market opportunity.Sphere: Related Content

Who Are the Online Leaders?

Most of us would sadly agree that we’re not one of them. What may surprise you is who some of the leaders are. Here’s some of the headline news that has caught my eye lately:
•According to AdAge, GM plans to have half its $3 billion ad budget into digital and one-to-one marketing within the next three years. GM has been active in the digital space for years with its interactive website, blogs, new wiki and more. It intends to accelerate the move from offline to online media.
•Unilever headed AdAge’s digital a-list for the year. Their campaigns included the various Dove “Real Beauty” programs and a series of webisodes for Suave. Degree deodorant sponsored webisodes for of the popular 24 television program; check out the website and click on the Absolute Protection tab. Unilever marketers are quick to point out that none of these campaigns are purely digital; they are masters of integrated communications using a variety of media.
•Some of the others on the a-list are the usual suspects among agencies and brands like Apple’s iPhone, Google, and ESPN. Others might come as more of a surprise: The NY Times online division and, if you’re not familiar with it, J&J’s baby center.
•Other online leaders like Toyota, American Express and Procter and Gamble are leading the way in the search for metrics that meet the needs of marketers in a digital world.

The corporate names I’m dropping here are not small, innovative start-ups. They are corporate giants and long-time leading advertisers. Clearly, marketers of all kinds are following their leads. Search marketing is a leader in the budget race, both because it works and because it’s easy to measure. An Ad Tech survey says that behavioral and rich media are getting even more budgetary attention. The recent SEMPO survey adds what we pretty much all know; the growth in interactive is coming at the expense of traditional media—print, TV and even direct mail.

In the last few days I’ve also read that another marketer said that digital is beyond experimentation. It is now part of the mainstream media mix, something I've been saying for awhile. There are still questions about how,when, how much and the best executions. But there should be no more questions about WHETHER!
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An Ad Network With a Widget Twist

CBS television has launched a local advertising network that will connect local television affiliates with local bloggers. That itself is a first, and in this struggling “old media” world the local stations are likely to be happy for the support. The current participants are listed on a page from Syndigo, a company that supports vertical advertising networks.

The way it works is that a local blogger signs up and downloads the headline widget. The widget includes a banner ad for the station. It displays real time headlines and images and has links to the station’s website. The station shares ad revenue with the participating bloggers (or community sites, networks, whatever; the requirement just seems to be that it’s local). Presumably the participating sites are paid on an impression basis. It looks as if the ads are served by DoubleClick.

WBZ in Boston is one of the original participants and the widget is supposed to have been deployed to the Red Sox Nation.net site. That’s down at the moment, so no impressions there. I also looked on their advertising page and see no mention of this program. Wonder how they are going to attract local bloggers. Some local sites already link to local blogs, so they’ll have a ready-made market.

I checked a San Francisco blog, SF Bay Style, and sure enough, there’s the widget. The links take you right through to the site for KPIX, the San Francisco CBS television affiliate.
Ad week says that advertisers including At&T, North Texas Honda Dealers and Liberty Mutual Insurance have signed up for the ad network. It seems to be a great way of achieving local reach and the context of popular local sites couldn’t hurt.

All in all, it seems to be another win-win for social media!
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Why Bebo - Why Now?

On Friday AOL announced that it was buying European social network Bebo. The WSJ described it as part of AOL’s attempt to transform itself. I’d add the word “continuing” to that; clearly AOL has been trying to reinvent its business model for quite some time.

The same social media phenomenon is occurring in Europe that is evident here. The EIAA’s recent report on Internet use in Europe documents the phenomenon.
The report says that:
•42% of internet users now communicate via social networking sites at least once
a month, putting it in third place (behind only search and email) in terms of most
popular online activities . . .
•European internet users also enjoy sharing information online:
o The number of people contributing to rating and review sites has seen
a growth of 42% since 2006
o Over a quarter (26%) now share their thoughts on forums

That portrays a bright future for social networks in Europe, and Bebo is already well-established. It’s not as large as MySpace or Facebook, but it’s growing faster than MySpace. According to comScore, since Facebook opened up registration in September 2006 it has grown rapidly in Europe. Bebo is still larger there with a growth rate that exceeds other European sites.



Both WSJ and eMarketer point out that advertising revenue isn’t growing as fast as the networking sites had hoped. Still, the future is here somewhere, and hopefully it’s going to be profitable. Bebo has an interesting video site called KateModern. If you don’t want to watch the 150 videos from the first season to catch up on the story, I’ll give you a hint. It is an interactive video site. By that, they mean you can contact the characters (not the actors, the characters) and discuss the story with them.
Think about the site stats if new visitors watch all 150 videos to catch up on the story line, such as it appears to be. That’s a lot of time on the site. Then all visitors, returning and new, can discuss the story line with individual characters. That’s more time on the site. There’s got to be some room for advertising, sponsorship and product placement here!

The potential is clear. It may be this type of content entertainment site, or it may be something that we haven’t seen yet. But it’s for sure that if we’re not looking, not experimenting, we’re not going to see the opportunity. So we should all watch this AOL venture with interest.
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RIAs Connect Marketers and Customers

Yesterday Adobe sent me a white paper about a product called Adobe Air. It looked like widgets, and I like widgets, so I opened it and read it.

No, it isn’t widgets, it’s a development platform for rich internet applications (RIAs). As I understand the difference in simple layperson’s terms, widgets provide a single piece of functionality—check the weather from your desktop, subscribe to this blog by email or RSS (see the right column), or get NFL schedules and team results on your iPhone. The thousands of widgets available connect you to a single type of functionality at your desktop or on the go, and they’ve become very popular.

RIAs seems to be a next step in Web 2.0 functionality. First an example. I downloaded the Google Analytics application, and it’s now sitting there on my desktop. By clicking on it I can get direct access to my Google Analytics account, select any of the blogs and websites I have on the account, and look at the current stats for that site. It’s just like being on Google Analytics except that I don’t have to go to the site and sign in. Because it’s easier, I check more often. That’s the same experience I’ve had with widgets and RSS feeds. Adobe has over 40 RIAs for download at present. This shows one that connects the user directly to content from NASDAC.
Cool! So I started reading a bit more. A post on ZDNet from last year, by enterprise applications expert Dion Hinchcliffe not only does a pretty good job of explaining but also puts another spin on it. There are many potential applications of RIAs inside the enterprise. The examples in the second paragraph above are all of connecting customers with your content and functions.

There are many platforms for developing RIAs. Some appear to be special-purpose, dealing with specific platforms like the popular AJAX used by so many retailers. Microsoft’s SilverLight is another developer platform that has gotten a lot of attention in recent months. They have an excellent overview of what RIAs can do for marketers and enterprises on the SilverLight site.

The good news is that RIAs are clearly an up-and-coming way of dealing directly with your customers—and making it easy for them to deal directly with you. Think about the fact that this puts your application right in front of the customer. They don’t have to go to the net and search for the information—thereby undoubtedly encountering search results and ads from your competitors. You’ve created an environment in which it’s easier to deal with you than to include your competitors in a consideration set.

The bad news is that this is not DIY in the sense of marketers doing it themselves. This involves JAVA, AJAX and all sorts of all other languages that only developers speak. So it takes some skilled work by developers to create the apps. Once that is done, it becomes easy for the marketer to deploy and the customer to use.

That may be an emerging definition of Web 2.0.
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The Media Ecosystem and Marketing Relationships

Last week AdAge had a provocative video clip that talks about the way changes in media are affecting the relationships between advertisers and their agencies. That’s not a revelation; late last year I wrote about studies from Accenture and IBM that focused on the relationship issues. I’m still taken with both the title and the content of IBM’s “The End of Advertising as We Know It.” It’s worth a reread. View the video here.

But time moves on and so do the studies. The one referenced in the AdAge video was done by Booz Allen Hamilton for ANA and the IAB. They surveyed 250 marketing leaders and the full report is also worth a thorough read. Here are some of the key findings. The first one “advocacy trumps awareness” is a cogent summary of what I was trying to say in my recent post on customer acquisition.
Other summary points reinforce the difficulty many marketers have in convincing their organizations of the value of social media. The report suggests that media is, in fact, “the new creative.” Their summary will also reinforcethe angst in traditional agencies, which are having just as much difficulty adjusting to the new media world as are their marketer counterpoints. A recent post in Marketing Charts, reporting on a different study by ANA, suggests that marketers continue to try to recast their organizations to deal with change but are not entirely satisfied with results.

The report ends by saying that successful response to the new media environment requires:
•Improved customer insight
•Better choice of media and management of multiple channels
•Marketing organizations with the necessary talent and a supportive culture
•Partnerships in the evolving media ecosystem.

All of this represents a sea change in the way most marketing organizations think about and execute their marketing efforts. They must be data-driven and must cope with a bewildering array of media choices. As frequently noted, many of the media choices require putting some control of the marketing message in the hands of customers. Dealing with the both the internal and the external issues requires skill and vision.

It’s a big order. This blog continues to try to point out there are leading-edge companies/organizations and agencies that give us ideas. This week alone I’ve written about a politician with a wonderful viral message and an income tax preparer that’s discussing issues with tax payers.

It’s a wonderfully challenging environment with many opportunities to “shatter the barriers between marketers and customers.”
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Income Tax and Social Media--Really??

360i’s David Berkowitz had a great post on his blog not long ago. In the press of events I ignored the original one, so I’m glad he did a reminder and gave links to the social media pages. What struck a lot of us, including the Wall Street Journal, is that a tax preparer—not a breed known either for innovation or sense of humor—was mounting a campaign that included major elements of social media.

H&R Block’s Digits site might be described as a community site. Apparently people actually do want to discuss tax-related issues. I looked at some of the “Current Conversations” and I believe they have used professionals—some from H&R Block, others creative professionals—as conversation starters. That’s a good idea, and it seems to be working, judging by the number of comments. As seen on the home page they are even in Second Life, although I’m not sure I’m eager to find my Tax Mojo!

Besides Second Life, the campaign includes pages on Facebook, MySpace and YouTube. When I looked at the Facebook page, I suspected the young man singing the Ode to Block was a paid presenter. The MySpace page introduces Truman Green as the young man at the center of the campaign. I found he listed his profession as “blogger.” Given his singing, maybe he should keep that as his day job. Couldn’t resist that--but the fact is that he’s professional but informal—probably a good selection for what is obviously a campaign targeting the young adult market. The YouTube page is also Truman’s page.

I’d particularly encourage you to look at the Facebook page. There’s a lot of stuff going on there—an interesting model to consider. Clearly this is a professionally-designed and managed campaign, not a DIY effort, but we all can learn from it. One thing to think about is that they apparently have used paid presenters as well as their own professionals. It rachets up the quality level of the campaign. They haven’t exactly posted banners about that aspect of it, but people are carefully identified and I see no attempt to deceive—to flog. They did, however, advertise on both MySpace and Facebook to draw people to the page. That seems to be Facebook’s model—take a look at their Business pages.

And now, I’ve got to go finish my taxes—really!
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Personalization--Part 1.5 - Fantastic Example

Read Part 1 here.
Read Part 2 here.
Alisa Leadbetter is Crossmedia Manager for vdBJ/Communicatie Groep, a custom publisher in Holland. She is also an astute observer of the Internet scene there. She furnished the customization example I used in the discussion of personalization on the front end—in customer communications. She was kind enough to follow up with a link to the video that was the basis of the campaign and some commentary. You don’t have to speak Dutch to love the video!

View the video here to see how it's done.

She also provided a link to an article in a Dutch newspaper, and you do have to speak Dutch to read it. Fortunately, she added some commentary:

According to a Dutch newspaper this was the first of its kind in the world. The date on the article is February 2007. The guy in the movie is the leader of the SP, the Socialist party. He was one of the first people in Holland with a blog, they make great use of new media. His blog is mostly ghost written these days, but in the beginning he did most of it himself. They have had a few viral campaigns since this one (and of course they used the e-mail addresses they got in this first campaign for the subsequent campaigns). this was the first of its kind in the world. The date on the article is February 2007. The guy in the movie is the leader of the SP, the Socialist party. He was one of the first people in Holland with a blog, they make great use of new media. His blog is mostly ghost written these days, but in the beginning he did most of it himself. They have had a few viral campaigns since this one (and of course they used the e-mail addresses they got in this first campaign for the subsequent campaigns).

I reserve my right to consider relevant content, selected on the basis of customer knowledge, as the best kind of personalization. However, as far as personalized communications go, this is as good as it gets. People like to see their name in print and the creators of this program have done it in such a way that it’s almost guaranteed to go viral.

Are you old enough to remember the personalized Porsche campaign—probably in the late 80s/early 90s? It was a poster (paper; those were direct mail days) with a front view of a Porsche with the customer’s name on the license plate. I tried for a long time to get a copy of it. It went only to Porsche owners and none of them were about to give it up. I suspect some may still be hanging in dens or offices.

As I’ve already pointed out, database marketers learned to use personalization a couple of decades ago and there were the occasional, really creative uses like Porsche. However, in those days the best you could hope for was to reach your own mailing list and maybe a brief article in DM News or AdAge. Today, creative use of personalization goes viral. Consider the wonderful use of a video, a personalized message, and a viral campaign in the Dutch political example. That’s the power of the Internet!
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Customer Acquisition--How the Internet Has Changed It

As I wrote on March 4, the Internet has changed the core marketing communications processes fundamentally and forever. Marketers are still trying to come to grips with that fact and to learn how to leverage and optimize the power of the Internet in integrated marketing communications programs.

We all know what the Hierarchy of Effects looks like. We were weaned on it as marketers. Unfortunately, it’s still the mental model that many of us use. I argue that it is simply not the way marketing works today. It probably was never entirely hierarchical. Today it’s more like a maze with many ways of getting to the end goal—a trusted brand. That makes it hard to specify a process that fits all situations, much less make it one that is hierarchical. Earlier I described it as circular and I think that’s an improvement, but that still doesn’t express the complexity of the decisions marketers face.

In the mass media era we spent time and money to reach our target segment and create brand awareness. In the Internet era the more direct approach is to attract the target’s attention with relevant content. The Internet supports the acquisition process in two significant ways:

•Marketers can target an audience for acquisition with little of the wasted reach of mass media. Targeting by display advertising on carefully-selected web vehicles (sites, blogs, social networks) is similar to mass media and we know that it accomplishes brand development as well as generating action. PPC advertising based on contextual keywords targets to an individual’s current behavior. Behavioral advertising, based on actions already taken by anonymous visitors, offers more precise targeting and is consequently growing in favor with marketers.

•Marketers can incite to action, which usually requires driving people to their website. They must carefully consider the actions they want target customers to take on the website, how they will encourage them to take desired action, and the experience visitors will have while they are there and afterward—in the fulfillment and service process. They must also make decisions about how to measure success and how to capture data from newly-acquired targets.

The set of possible actions represents basic objectives that marketers may choose for their campaigns. They include, not in any order of priority:

•Drive first-time visitors to a retail location to make a purchase.
oThat may be as simple as offering store location information, often with maps and other ancillary information. It can include sales promotions like coupons.

•Encourage an immediate purchase on the site. This can rely on compelling content—from product descriptions to customer reviews—and a well-designed and maintained site that leads visitors through a planned, step-by-step process.
•Provide incentives to make an immediate purchase on the site.
oThe incentives can be part of the advertising—a free shipping offer, for example. They can be presented on a landing page as part of a formal conversion process. They can be presented on the site—an offer to “buy two and get a third for half price” shown, at a minimum, on the home/main product page and on the order page.

•Invite visitors to register by offering relevant content:
oAdditional product information—brochures or demos
oSite functionality—build your own product
oA newsletter or alerts with offers of interest
oCoupon downloads
oParticipate in brand community activities

•Encourage visitors to stay on the site longer
oContent like videos
oActivities like games and contests

•Give visitors a reason to return
oCompelling content, excellent experience, ongoing events

These generic objective types have an element that is familiar to B2B marketers but less so to most consumer packaged goods marketers. They imply a multi-step process, except in the minority of cases in which the first-time visitor makes an immediate purchase. If not, the visitor must be enticed to return. Successful retailers have been good at doing that; producers of mass-marketed products (and some services, insurance sold through agents, for example) have not.

The multitude of possible actions and the fact that not all culminate in an immediate sale pose two additional questions. First, how do we measure success? It is not enough to simply attract visitors to the website. We have to get them to make a purchase. Even though that may take several visits, the process is relatively easy to track on the web. Once it leaves the web for a retailer or a dealer, it becomes much more difficult

Second—and necessary for developing the correct metrics—is what is our working definition of acquisition? Is it merely getting an anonymous visitor to the site? Probably not; that’s the click-through dispute. Is it capturing an email address so you can begin to develop a dialog? If you are marketing a genuinely multi-step product—cars or real estate, for example—registration may be an acceptable definition of acquisition. In those two cases, conversion occurs off the site, so that argues for a more limited definition of acquisition. You may hold out for an initial sale as the only acceptable measure of acquisition. That depends on many things including the product itself and your ability to track through to the sale.

Acquisition is a complex task. The Internet hasn’t really made it simpler. It has, however, made it possible to target--even at the acquisition stage. It has made it possible to measure, not only success in ROI terms, but the path of getting there. Finally, it allows marketers to plan campaigns based on data, both consumer behavior data and programs results data.

The change in approach to acquisition is not an option. Marketers cannot afford to ignore the potential of interactive marketing in their total mix, both for reasons of cost efficiency and because consumers are demanding the relationships.

The changes in acquisition lead to a greater role for conversion. More about that in a forthcoming post.
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Personalization--Part 2 - The Back End

Read Part 1 here
Personalization of customer communications is can be a powerful marketing technique. It is best exemplified by carefully-chosen content that is relevant to the customer’s activities and interests, not simply by addressing customers by name. On the front end it can be used to attract attention and encourage action. On the back end it places great demands on data and systems. Relevant behavioral data must be captured and maintained in a form that makes it accessible to personalized marketing communications programs. Systems must be in place to ensure data quality and security, maintain it in actionable form, and deliver it when required. Marketing and IT are the two major players in these activities, but they require the informed cooperation of personnel throughout the organization. That requires the backing of top management. Put together, as they are in this graphic from Marketing Charts it’s a very tall order.
The CMO personalization survey confirms observation and anecdote that indicates few firms are handling the data and systems issues well. Their findings include:

•Nearly 50 percent of marketers report having fair to poor or little knowledge of customers, and almost 47 percent rate their company’s data integration capabilities as being deficient or needing improvement.
•[Only about] 10 percent of respondents rate the accuracy and reliability of their customer data as extremely good.
•Many marketers currently spend less than 10 percent of their budgets on personalized
communications; looking ahead, 55 percent say they will spend more than 10 percent.
•Purchasing history/activity – as well as size, profitability and location of customer – are key data points for designing personalized communications campaigns.
•Multi-channel integration is still lagging in personalized communications as almost 50 percent of marketers report a low degree of integration.
•Marketers appear fearful and intimidated by the investments required for personalized communications as there has been limited testing across all areas.

The effectiveness of personalized communications has been long established, as I suggested yesterday. Likewise the challenges of shared organizational ownership of data that leads to poor data capture and management are not new to those who have practiced database marketing since the 70s. These problems do not seem to be getting better. In fact the sheer volume of data available on the Internet seems to have exacerbated them. The CMO report includes expert commentary on the results. Bernard Gracy,VP, Strategy and Business Development forPitney Bowes Document Messaging Technologies hit the nail squarely on the head. He lists the top three challenges as being:

• Inadequate systems, data, resources and budgets. Personalization requires an effective investment to improve our available solutions – something many marketers are hesitant to make.
• The disconnect and lack of communication between chief marketing executives, who serve as the primary directors of personalized marketing initiatives and sales and customer relationship management groups, which most frequently maintain control of data used in these campaigns.
• An ineffective tracking system for a customer’s purchase history and activity, as well as size,profitability and location of customer. These are, by far, the most important key data points for designing personalized communications.

He adds that, “Tapping into “The Power of Personalization” requires marketing, IT, and operations divisions to work in concert – to link disparate databases across the enterprise to create a single view of the customer,create insight from that view, and have that insight.”

At best, that’s a hard job. Without top management understanding (this is not all going to happen overnight) and support (it’s going to take some front-end investment; ROI will come later), the job will not get done. The CMO study provides useful guidelines. It also suggests that CMOs will have to champion the personalization initiative within the organization. That takes marketing strategy skills, some rudimentary knowledge of what the technology can and cannot do, and the ability to bring disparate groups within the organization together around a common theme.

Let’s hope we have lots of CMOs with the combination of marketing and organizational skills necessary to pull it together on the back end. With the back end in place, the front end will be able to field compelling personalized communications.

Without it, companies will languish in the back waters of untargeted mass communications. That cancels out major capabilities of channels like email and websites themselves. That’s unfortunate, and in the end, it’s a waste of resources. Better to invest in the data that will enable meaningful use of the technology.
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Personalization--Part 1 - The Front End

The CMO Council has just released a study of personalization, covered in Marketing Charts yesterday. The Council surveyed over 700 senior marketing and executive officers in companies around the world to learn how they gauged the impact of personalization and the extent to which they were using it.

Personalization is hardly a new topic to marketers. Direct marketers have been using it for years, especially in mail marketing. Some has been good and effective, some has been silly or downright awful. You’ve seen it all. Even reasonably well done, personalization does work. The carry-over to email marketing is obvious. According to the CMO Council:

• Spending on direct-mail advertising (an integral part of personalized communication applications)shows no sign of abating; investments by marketers totaled $58.4 billion in 2007, and that figure isexpected to increase to more than $70 billion by 2011 (source: Winterberry Group).
• More than $3 billion was spent in the U.S. alone on e-mail marketing (source: EmailInsider).
• Yet, an overwhelming 56 percent of marketers believe personal communications out-performs traditional mass market delivery; digital, database-driven channels (email, web, contact centers)reportedly offer the most upside potential for engaging in customized communications (source:The Power of Personalization)

What exactly does personalization accomplish? According to the report it improves customer retention and loyalty by increasing conversion, close and action rates and increasing website traffic. I’d add another outcome; used creatively personalization can increase the chance of a communication going viral. Here’s a global example, a Dutch politician to be precise. This is apparently the politician, Jan, standing under a sign with the recipient’s name, Eelke. The political email included the usual “send it to a friend” with a twist. When you forwarded it to the friend, the name of the recipient showed up in the sign, according to the Dutch marketer who sent me the example. That is a creative—effective—front-end use of personalization!

I define "front end" as all the activities that lead up to a sale--all the things we do to attract the attention of customers and put them in a frame of mind to take action. The action can be a visit to a website, a request for information, sale of a product or service, or in this case support of a political candidate.
In spite of its effectiveness, marketers are not making extensive use of personalization according to the survey (download the report from the CMO Council). Not because it doesn’t work, but because their organizations and their back-end systems are not with the program.

So tomorrow, the back end of personalized marketing.
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Is 2008 Really The Year of Mobile?

If 2007 was video, 2008 is mobile—right? That’s the prediction, anyway. Actually, it has been a prediction for several years, but in the US (unlike the rest of the developed economies and many developing ones) it hasn’t happened yet. There are reasons to believe that momentum is building, including the FCC auction of wireless spectrum. The technology is mind-numbing but I found a blog post that has a number of interesting links including one to an interview with Reid Hunt, former chairman of the FCC, who explains some issues in an understandable manner—sort of.

What marketers are looking for is the availability of wireless broadband access that makes a wide variety of applications—including advertising—interesting to mobile users. There are many users in the US—over 255 million according to CITA, the industry trade association. comScore found that mobile broadband use increased by 154% from 2006 to 2007, but that’s on a very small base. According to their press release:

Though mobile broadband access is currently used by about 1 percent of the total U.S. Internet population it is poised for significant growth over the next few years,” said Serge Matta, senior vice president of comScore. “As consumers increasingly demand and depend on portable Internet access, the demand for mobile broadband should continue to increase.

Given the current slow download speeds use of the mobile Internet is heavily skewed toward search, with local listings via 411 and content via a variety of other search methods being the primary activities.


Consumers have become accustomed to free ad-supported search on the wired Internet. Will they accept advertising on the mobile Internet in order to receive free content? Media Post today reported on a study by Nielsen Mobile that suggests they are. Their analysis says that:

data subscribers are more willing to accept advertising in exchange lower costs or better content. In that vein, 32% said they're open to mobile advertising if it lowers their overall bill, while 13% will welcome it if it boosts the quality of their mobile media offerings. And 23% expect to see more mobile advertising in the future, up from 15% at the start of 2007.

A recent article in eMarketer (February 25, 2008) emphasized the continuing importance of search among mobile Internet users and indicated that free content was highly desirable. Free is always good, but a good summary article in WSJOnline points to the growth of the mobile gaming market and the willingness of consumers to pay for popular games.

Up to now most content, like games, has been downloadable. Mobile advertising services firm Medio reports that searches for downloadable content is being replaced by searches for content on the Internet itself. They report high click-through rates for ads delivered with content searches:

Medio calculates the average click through rate on search ads delivered in this way as high as 29%. For pay-per-call advertisements, call-through rates as high as 22% have been measured.

One implication of all this data is that increasing use of the mobile Internet offers an opportunity to deliver ads on mobile devices. While that statement is true, remember that the majority of people like me who have mobile Internet access don’t use it. Those who do use it are heavily skewed to the young and higher income demographics.

The widespread adoption of the wireless Internet in the US seems like an agonizingly slow process. However, it does appear to be picking up speed. For marketers with the right content or products that are targeted to the early adopters of the wireless Internet, this feels like the time to start experimenting with the channel.
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How Has the Internet Changed Marketing Strategy?

The answer is that changes have been great, but I don’t know of anyone who has verbalized the changes in a specific way. I’m going to cut off a chunk and give it a try.

I like to try to boil what we do as marketers, which often gets pretty complex, down into simple concepts. As far as I’m concerned marketers basically do three things. We acquire customers or sales leads. We convert leads into actual customers. We retain existing customers. There are many things we have to do in order to accomplish these three key goals. In addition, marketers of frequently-purchased consumer goods and services and some lower-priced business goods and services may not be in the lead conversion and generation business. With those provisos customer acquisition, conversion and retention form the core of what marketers do.
Internet 1.0 changed all those activities irrevocably. As this blog has often pointed out Web 2.0 is already here and the requirements for marketers are changing again before we fully came to grips with Web 1.0. This is a good time to sit back and try to organize the changes we know about into a simple, understandable form.

So, over the next couple of weeks I’m going to write a series of four posts, with this being the first. In the second I’ll discuss customer acquisition. Then over a few days I’ll write about conversion and then retention.

I keep being reminded that many of us who are now in the higher echelons of marketing were educated in traditional mass media marketing and it’s hard to get away from that and understand how fundamentally marketing has changed. Understanding the changes that have taken place--and maybe looking ahead a bit--is the purpose of this series of posts.

Please stay tuned!
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