Direct Response and Brand Marketing in the New Media

I picked up the link to David Carter’s blog post from Twitter yesterday. Truth to tell, I followed it because it mentioned NEMOA, the New England Mail Order Association which numbers among its members some of the best catalogers on the planet, also a lot of old friends. I was interested to see what was going on, and David’s slideshow focuses on what he learned from them; you’ll find it interesting.

I had a major “wish I’d said that” moment when I saw this graphic. David is a hard-headed social media marketer, and his “not a replacement strategy” warning is a good one. But what really struck me is that this says it all. Social media is a creature of the web, although it simply enables some physical world phenomena like Word of Mouth. Direct response, the province of the people at NEMOA, has been around for quite awhile. So has branding. What’s fascinating is that direct marketing and brand marketing take place, in similar ways, on and off the web. This is what marketers do—it really does say it all!

This morning’s article by Augustine Fou in ClickZ takes it a step further. Dr. Fou is proposing a new definition of digital that blurs the nice neat lines in David’s graphic. It’s a broad definition; "the collection of habits and expectations of modern users." Here is a summary of his major points:

Branding Is Dead
However, consumer habits have also evolved. Many people actively search for things online. And the moment they type in a search term or phrase, we know exactly what they're looking for at that exact moment in time.

While it’s true that traditional brand marketing in mass media has decreasing relevance on an almost day-by-day basis, brand development is still hugely relevant. It’s just done differently

Targeting Is Dying
As consumer habits change to "pulling" for information when they want or need it, marketers' tactics must also change. Tactics that fall under the umbrella of "push" marketing become less relevant because fewer modern users will tolerate being beaten over the head with ad messages.

Dr. Fou’s point is that people almost always start with search when they’re looking for information on the web, and that’s absolutely true. However, think about the post about McKinsey content last week; they are using Web 2.0 techniques for distributing content. Is that push? I’d say it is, but it’s either permission-based or very polite or both. No beating over the head here!

Social Media Isn't Media
. . .trying to use social networks and social actions as media won't work. Conversations can't be bought. And if they are bought, the community will find out and retaliate.

He concludes that marketers who get it “will gravitate toward techniques that cultivate genuine and open dialogue with customers, where brands humbly listen and learn, and then respond with new features and innovations.”

I totally agree. But I’d add that marketers still need to understand, and properly use, the three disciplines of marketing in David’s bubble chart. Direct response, often PPC these days, can be used to bring people to your site—which had better give them the information they are looking for and allow them to efficiently conclude a transaction (direct response) if they desire. Brand marketing still has great relevance—think all the “who do you trust” discussions. People you know and other consumers come first on the trust list. Brands (I’d include the adjective “trusted”) follow closely. Creating a trusted brand should be the overriding goal of brand marketing these days.

Where the lines really blur is between brand marketing, still a necessity, and social media marketing—more and more the way savvy marketers are doing brand marketing—as Dr. Fou said.

The disciplines are still there; the way marketers execute has undergone a huge shift.

Consumer Reviews Are Positive

Not long ago I wrote a post for the eBrandMarketing blog urging marketers to encourage consumer ratings of their products. Data keeps rolling in that shows the power of this user-generated content in the consumer decision process. Not only do consumers use peer reviews; those who do spend more money. According to eMarketer:

Some 27% of the respondents who read customer reviews reported average spending between 5% and 10% higher than those who did not read them. Another 21% of review readers reported average spending between 1% and 5% higher than that of non-readers. Nearly 7% of respondents who said they read customer reviews reported average spending 20% higher than other online shoppers. (Newsletter, December 4, 2007)

Wow!

A few days ago eMarketer reported on a study that should reduce—if not eliminate—manager’s worst fears. They worry that customers will say negative things. While I can, and do, argue that negatives should be heard (and acted on!), that’s another issue. This data comes from BaazarVoice, a company that helps retailers with social media applications. They analyzed their data for a single month, and found most reviews positive. If this was a five-point scale, 36% were “Always” and 51% were “Most of the Time.” That’s 87% in the top 2 boxes. That’s amazing! That’s huge! The main reason for writing the reviews (90%) was to help other customers.
That’s nice of them, but, given this data, it would behoove retailers to be proactive about reviews. I referenced ShopNBC in the earlier post. Amazon recently asked me to review purchases, see the email above. Since these are automated messages, it doesn’t cost the retailers much, and the results may be significant!
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Creating Brands Online

I’ve been writing about online branding for quite awhile, in my textbook and some marketing encyclopedia articles. The chief point has been that we have a whole new set of interactive tools to use on the web, whether we are creating new brands or strengthening existing ones. The tools are:

•Personalization
•Co-Creation of Content
•Purchase-Process Streamlining
•Customization
•Dynamic-Pricing
•Brand Community

Many online marketers use several of these tools well. Amazon has pioneered some of them and uses most of them well; I’m not sure they engage in dynamic pricing. What I am sure of though, is that when you do it well it can become an information product. When I ordered Christmas gifts from Target online I was given a choice to use their checkout process or Amazon’s. That was a surprise, but no big decision. I have my account set up on Amazon, I trust that they take care of my data, and I’d use them whenever given the chance. Seeing Amazon in that context didn’t do any harm to their brand image either!

There are new branding opportunities inherent in Web 2.0, as the description of Verizon’s recent branding activities in today’s iMedia Connection suggests. And that article doesn’t include Verizon’s My Home 2.0 promotion I discussed earlier—different agency I think.

Having suggested a new media model that reflects that new reality, I’ve been thinking about branding. I posted my thoughts on the eBrandMarketing site. Hope you’ll take a look and tell me whether you think this is the way it can work in the Web 2.0 world.

The Importance of Word-of-Mouth

Marketing Charts recently published results of a study of word-of-mouth marketing. All marketers know that word-of-mouth is powerful. The PQ Media study shows that formal word-of-mouth marketing is still miniscule compared to other marketing media. It is growing at a rapid rate, and they predict expenditures will exceed $1 billion this year.

Efforts to generate WOM are fairly recent and they have met with mixed results. I think I know why.

A firm that has achieved explosive growth with its WOM program is BzzAgent. What they do is interesting overall, but my focus is on their disclosure policy. They require that Buzz Agents disclose the fact that they are “buzzing” a product, whether it’s in person or in some medium like a blog. The requirement to disclose is absolute.

Doesn’t that limit the effectiveness of the agents? To the surprise of virtually everyone, it doesn’t. Whatever the venue, people just seem to accept the disclosure and move on to information, or product experience, or whatever it is that’s being offered. BzzAgent is much in the news, having recently established a major strategic partnership with the Interpublic Group, but I can’t find any reports of the negative consequences that would come from a revelation of non-disclosure.

Think back to the blot on the record of John Mackey and Whole Foods caused by his dishonest postings. The Wall Street Journal recently reported (subscription required) that all Whole Foods executives have been forbidden to post on any Internet forum not sponsored by the company. That’s too bad, but it’s what you get when you do something wrong and get caught at it.

What started this train of thought was the reminder a few days ago that there are sites on the Internet where you can find people willing to write for pay in Internet forums of all kinds. The ones I’ve looked at don’t seem to have a disclosure requirement. For my money, that’s a bad idea. Period.

Transparency works. Deceit does not.

Word-of-mouth works—if it is honest and transparent.

It’s really hard to hide anything in this always-on world. You will get caught. So build transparency into your social media programs. You and your brand will be better off!
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Announcing a New Blog

I'm happy to announce that a new vertical blog sponsored by Glam Media launched just last night. eBrand Marketing has an interesting line-up of authors and you can expect it to be a lively and informative look at ebranding, especially in the context of marketing to women.

You may be familiar with Glam Media. Their website Glam has recently become the web traffic leader in the women's space. It has lots of good content and Web 2.0 features.

I'll be making today's post there with some new data on video. We hope you'll check it out and come back often!

Coke, Virtual Thirst, and Second Life

According to Coke, even avatars get thirsty!

Whether you believe that or not, Coke has just concluded its first contest in virtual world second life. Called “Virtual Thirst” it invited people to create virtual vending machines for Second Life. The machines were to vend experience—the essence of Coke—not cans of Coke product.

The contest had a couple of interesting aspects; participants could submit entries in a variety of different formats and Second Life avatars would be the judges.

According to the contest rules,

You may submit your idea in any of the following ways: - gift an object to us in Second Life - teleport your avatar to http://www.virtualthirst.com/launch (link no longer active; see graphic below) and use the drop-box to gift us your object
- share a video in YouTube - visit http://www.youtube.com/virtualthirst and use the "Connect with VirtualThirst" function to send us a message and attach your uploaded video
- share an image/description with us in MySpace - visit http://www.myspace.com/virtualthirst and use "Send Message" to post your idea as a message to us
- US residents only can also e-mail us your idea - send an email to Entries@virtualthirst.com with the subject line, "Virtual Thirst Entry" and attach your idea to the email. Please do not use the body of the email to describe or to link to a description of your idea. [emphasis mine]

The contest took place across several media channels, opening it to more participants and giving Coke insight into channel usage. It probably also increased the difficulty of picking the winning entry. Judges were avatars, members of Joseph Jaffe’s Crayon marketing services company. A blog entry by Greg Verdino, a member of the firm, shows how comments were used to implement “listening” as part of the program. He also makes available a screen capture of the submission process on Second Life, complete with avatars.

The winning entry was a video and the announcement gives a good idea of how the contest played out. Coke doesn’t appear to be talking about their perspective on the contest—at least not yet.

There’s been a lot of criticism of Second Life in the marketing and tech trade press lately. Second Life itself offers metrics for its use, which of course makes their credibility suspect. Second Life may or not have the sustainable model; time will tell. There are many virtual worlds now; Tech Crunch (see complete table here) did an overview recently.
The time may come when most Internet users will have a presence in a virtual world for social or business purposes. It’s another thing marketers must learn about, must experiment with. It looks to me as if Coke’s first try turned out pretty well. I’m sure they learned lessons that will stand them in good stead as they consider other interactive ventures.
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Relating to Gen Y

The generation of consumers born between 1980 and 2000 numbers over 70 million. Many are well into their 20s and in the labor force. All, through their own earnings or through influence over household expenditures are a powerful consumer force. They are a prime target for many retailers. They have been raised on media and the Internet is their chief channel. They are a leading indicator, and often an influencer, of cultural change. Their opinion matters. New York magazine had a provocative article (free registration required)about their values and behavior recently.

I’ve had a couple of interesting encounters with the more broadly defined 18 – 35 demographic lately that have started me thinking. Both center around one of their favorite retailers, Gap.

In a recent class I assigned a short Internet marketing exercise. It started with my usual “select a website that interests you, one that you are reasonably familiar with.” Eight teams of graduate students worked industriously for about 20 minutes, with little or no conversation between groups. At the end, when we debriefed the exercise, two out of eight had chosen the Gap site. Not too surprising until I realized that both had focused on the (Product) Red ™ promotion.

Members of both teams had been following the promotion and gave every indication that it would affect their purchasing behavior and they wanted to encourage others to participate. Cause-related marketing can be powerful for young adults.
Their support of (Product) Red ™ lead to a broader discussion of social issues. The class occurred just a few days after the news about child labor in one of Gap’s supplier plants in India. They had been following that also, including being aware of how and how quickly Gap president Marka Hansen responded to the allegations and how quickly her response was posted on the Gap home page. They are paying attention. And always remember they are communicating. I searched Technorati and found 136 posts for “gap child labor india.” When I broadened the search to “gap child labor” I got 506 posts. I counted 13 video clips on the subject. All this has happened since the story broke in the British publication The Observer on October 28, and the posts continue.

What I heard from this small, unscientific sample is that they were giving a trusted brand the benefit of the doubt. Gap has a pretty good record for dealing with this type of issue and the reaction to this revelation was swift and decisive. So far, so good, but they are being watched.

A few days later a communication from another member of the target demographic revealed that Gap, too, has marketing feet of clay. The opt-in email offers a nice promotion. Unfortunately on the day it was offered, the entire site was down for a scheduled upgrade. Do Marketing and IT talk to one another? Not in this instance! And the site was back up a day later, so the promotion could easily have been postponed. Will the young adult continue to patronize the Gap? Probably, but they likely lost a sale this time.












Whether they are identified as Gen Y, Gen X or the 18-35 demographic, these consumers are connected and demanding. Their demands include the behavior of corporations as well as the products they offer. A trusted brand is built slowly, with considerable effort. It can provide a margin of error for unforeseen events. But news is viral among these consumers and marketers have to react quickly and effectively.
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The Explosion of Advergaming

I'm not a gamer myself so when I saw the announcement that Dr. Pepper had introduced its first branded game for the iPhone I though I’d look around and see what was going on. A first stop was eMarketer, which forecasts that all kinds of branded mobile spending are ready to explode.




Second stop was Dr. Pepper itself. I found it interesting that I could only access the game using the Firefox browser, but once I did that it seems easy enough to play from the desktop. Hum. . .looks like “bottle cap bingo” to me.
Then I visited Apple to learn a little more about the iPhone and the Safari browser that makes applications like gaming easy. If you want to learn more, take the Safari tour.
I kept on to the iPhone page, because I really didn’t know much about the iPhone except that it's expensive. I listened to the September updates video and was blown away with how much you can do wirelessly. Apparently your iPhone and your desktop iTunes update one another when you plug it in. Cool!

As I write this, analysts are discussing the new Google SmartPhone software. The speculation is that Google will partner with device makers with the effect of boosting the already-rapid growth in the mobile Internet space.

A final word from Marketing Charts, quoting a study by Ingenio/Harris in which Gen Y consumers, a key target market for mobile promotions, emphatically resist all types of mobile advertising. That makes Dr. Pepper seem right on track. Mobile users don’t want advertising per se, but they do want entertainment on their mobile devices. iMedia Connection has some suggestions on how to do it right. Let’s hear it for advergaming!
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The Brave New World of Social Media

Marketers are well aware that the media and customer landscapes are changing all around them. A recent study by Accenture found that 62% of executives surveyed believed that “new platforms/new ways of delivery” would be the greatest driver of revenue growth in 2007. It was followed by “new content” at a mere 32%. But in order for this to be true, marketers have to get it right. Even Accenture didn’t get it entirely right. They have a catchy but off-target subhead in the report, “The Revolution Will Be Televised.” Not exactly. It will be caught on video, often captured by personal cell phones, as current events continue to demonstrate.

But that is the new world, and marketers have to get it right. This video featuring Paul Martecchini of PowerStar Consulting shows some examples of what works and what doesn’t.

Click here to play the video.

There’s been buzz lately about the relative success of Target and Wal-Mart on Facebook. One social networking metric is members of your group; as of today Target has 12,829 and Wal-Mart has 1,242. It’s not the theme of the respective pages, both are designed to appeal to the college market. In fact, Wal-Mart has more interactive content with their “decorate your room” application.




















If you could see clearly the user-submitted pictures at the bottom of each page, you’d see the issue emerging. The pictures on the Target page are of dorm and apartments and young customers enjoying them. At the time I checked, all four of the user-submitted “pictures” on the Wal-Mart page were negative—a protester, a report cover, what looks like a website home page, and a cartoon. None favorable, which can’t be pleasing to Wal-Mart, although they say they are going to continue with the page. When you read the “wall posts” on both pages, the issue becomes even clearer. The young members of the Target group generally love Target, love shopping there, etc. It looks to me as if the average member of the Wal-Mart group signed up to express social concerns about Wal-Mart.

Two points. First if you’ve got a respected brand, your customers can—and probably will, if you do it right--help you get the word out. If your brand is not respected, submitting it to social scrutiny is going to magnify the issues. Second, do you have a Facebook and a MySpace account? Do you spend some time looking at what your competitors are doing there? If not, you may be missing something important!

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A New Entry in Wikispace?

Not long ago Martha Stewart Omnimedia announced that it’s working on a Web 2.0 site to be called “Marthapedia.” It has created a lob of buzz, but it’s clearly not up yet. When you seach for Marthapedia at present you are redirected to the current site. I took a look at their Community page and, while has lots of interactive features, it doesn’t have real collaborative features.


According to MediaPost, the new “”Marthapedia" will essentially serve as an online handbook to provide user-friendly info on topics such as home and garden, family, food and others. The entries will initially be developed by Stewart's editors, but like Wikipedia, consumers will be able to link in and suggest their own recipes or gardening tips. However, unlike Wikipedia, where consumers can freely update the content, the editors will serve as gatekeepers, determining which consumer-generated info should be added.”

I’ve always been a great admirer of the Martha Stewart Omnimedia business model. It was designed from the ground up as a multimedia company. If you follow any of the publications, on or off line, you know that they really understand the use of various media and excel at cross promotion. On the web they are good at rich media, video and interactivity. The founder and her issues aside, it is a model par excellence of multichannel communications and marketing.

I’m adding my voice to the chorus of skeptics in the blogosphere on the “wiki” aspect, though. Neither marketer-developed content nor extensive monitoring of submissions is in the open source spirit. What are the expectations when consumers submit content? Is it that all content will be used? That content will be monitored for acceptability? That only selected content will be posted? You can see examples of all these practices all over the web. It's a matter of setting expectations--and then living up to them.

Maybe we’re just being purists, objecting to the use of “wiki” in something that sounds like a glorified message board. Maybe there is a real issue here that’s going to come back to bite the brand. All branded sites have to maintain some control over posted content. It will all depend on the execution.

But just don’t call it a wiki!