Big hugs to all the young rich asian nonparent masters degreers and doctorate holders that make this tree of digital life what it is!
Tuesday, November 30, 2010
Meet You!
My faithful readers, here's a look at who you OldestLiving.com readers are!
Big hugs to all the young rich asian nonparent masters degreers and doctorate holders that make this tree of digital life what it is!
Big hugs to all the young rich asian nonparent masters degreers and doctorate holders that make this tree of digital life what it is!
The Internet's Greatest Marketing Bloopers
Everyone loves a good blooper -- until your own brand becomes the butt of the joke. Let's examine some digital flubs and what we should take away from them.
Who doesn't love a TV blooper? They are fun to watch -- flubbed pronunciation, forgotten lines, double entendres. You don't even need to be a mean person to enjoy them because bloopers are mistakes, but not deadly ones.
In an environment as dynamic and ever changing as digital, it's natural that even the smartest in the digerati make bloopers in judgment or execution. Many such online marketing bloopers are the result of the changing reality brought on by the advent of digital, and as such are quite understandable. But that doesn't mean we can't learn from them.
If the definition of insanity is doing the same thing and expecting different results, then perhaps this article can help us avoid straightjackets by pointing out a few digital bloopers and what we should take away from them.
1) Don't assume you can isolate messages
The web provides enormous opportunities to segment and tailor creative messages. But it also breaks down demographic, geographic, and other boundaries. Segmentation and tailoring does not prevent some segments from hearing and seeing what you are saying to others.
Remember this ad from Absolut, which depicted the pre-1848 Mexican and U.S. borders? Run only in Mexico, the ad was designed to be a funny nod to Mexican pride. The brand surely felt it had found a powerful visual to help la gente identify with the brand. Unfortunately, right-wing American bloggers got hold of the ad, and within hours were lined up to ban Absolut, call it reverse racist, and on and on. Former CNN personality Lou Dobbs switched to Grey Goose over it.
Now, in large part due to income disparities and population, Americans drink more Absolut than Mexicans. So the company had to scramble to apologize to Americans who might have been offended. Here's what the brand issued:
"This particular ad, which ran in Mexico, was based upon historical perspectives and was created with a Mexican sensibility. In no way was this meant to offend or disparage, nor does it advocate an altering of borders, nor does it lend support to any anti-American sentiment, nor does it reflect immigration issues. Instead, it hearkens to a time which the population of Mexico may feel was more ideal."
-- Paula Eriksson, VP of corporate communications, V&S Absolut Spirits
But from a digital perspective, the key takeaway is that you need to assume that everyone can see everything.
2) Avoid building the branded destination website
Most of us have created a digital something in the misguided hope that significant numbers of people care about it and our products as much as we do. If you're like me, there's a $500,000-plus error in your past that reflects this sort of "Field of Dreams" mentality.
It wasn't so long ago that lots of brands were building massive websites in hopes that consumers would spend half their online time interacting with branded games, participating in brand chats, talking to brand experts, etc. While less common these days, the branded "destination" site still appears periodically in the digisphere.
It's fairly unlikely that you can attract and hold the sort of audience you are dreaming of. Why? Because just as The New York Times shouldn't go into the chewing gum business, you probably shouldn't go into the content business. It's not what most of us do. Better to stick to what you know.
The classic example of this is Bud.tv, a $30-million experiment that folded in 2009. Now, hold the phone. I am not ragging on Bud here. If any brand could develop a compelling content destination, it'd probably be these guys. After all, the company "gets" its customer and knows how to bring the funny in a 30-second spot.
But even Bud couldn't define and deliver a place where its customers would want to "live" online. The hype and anticipation of Bud.tv were ultimately met with lukewarm consumer response -- despite a broad range of decent-to-good video, activities, and game content on the site.
The hard, cold reality: Bud makes beer, not movies and games. And you make pine-scented air fresheners or electronics or weekend getaways or whatever it is that you make. Not entertainment.
3) Don't field social media programs just before the weekend
Arguably, no one is better at marketing to moms than Johnson & Johnson, so its misstep on Motrin was a bit surprising. Motrin developed a tongue-in-cheek ad that poked fun at moms who love baby slings -- fabric baby carriers that keep your child right next to your body. Motrin suggested that moms who wear them cry more than moms who don't, presumably due to back and neck strain. Here's the ad:
The video went up late on a Friday. While of course social media is a 24/7/365 proposition, most marketing and PR people are at home on Saturdays, and probably not monitoring the social sphere for consumer reaction. But as Motrin soon learned, mommy bloggers and mommy Twitterers do not take Saturdays off.
The maelstrom of negative reactions was fierce , and it built throughout the weekend. By the time Monday came along, Motrin faced a tsunami of angry moms.
Motrin responded quickly. Down the ad came, and with its disappearance the controversy more or less ended.
We could dissect the ad and try to take creative lessons. But hindsight is 20/20. I think its best that we remember that we live in a connected world, and individual opinions matter. And when we don't participate in the dialogue about our brand, bad things happen. So never field campaigns or social media on the weekend. Because listening to early reactions is critical to ensuring success. Had the campaign gone out on a Monday, J&J could have addressed the concerns in near real time, provided it was using one of the many social insights platforms currently available. Nothing good comes from not being around at launch time.
4) Never claim "hackproof"
When a medium reaches more than a billion people, it's safe to say that there is someone out there who can hack whatever you can make. How long does it take before Microsoft launches its latest security update before the next virus hits?
It's not just software that has been hacked as well as shamed online. The people who make Kryptonite bicycle locks found themselves in a whole mess of negative publicity http://www.engadget.com/2004/09/14/kryptonite-evolution-2000-u-lock-hacked-by-a-bic-pen/ way back in 2004 when Engadget was able to pick its signature high-end lock using only a ballpoint pen.
And of course there's LifeLock http://www.lifelock.com/, which famously posted its CEO's social security number everywhere to prove how protected its members are. While said CEO was able to use the service to avoid damage to his credit, his identity was stolen many times. Meaning people used his social security number in a variety of ways, but none had material impact on his credit. Because LifeLock had stated or implied (tomato-tomahto) absolute security, it lost the PR battle, even if its CEO can still easily get a new mortgage.
In short, claiming hackproof is like waving a red flag in front of 6.5 billion bulls. You might be able to outrun the pack, but at least one is getting its horn into your gut.
5) Don't "wing" it without a social media policy
It seems that many companies have recognized the importance of social, and the value of a "live" company presence in social media. Unfortunately, some jumped straight to social media execution without first developing a sound social media policy.
Hospital nurses cell-photoing an embarrassing X-ray and posting it on a social net . Earnest social media managers making statements that are inappropriate. The number of examples in which companies would have been helped by offering explicit and well-considered social media policies is legion.
Fortunately for those who made or are making this misstep, many organizations have made their social media policies public, and reviewing these can help companies understand, anticipate, and address potential issues before they arise. With all these examples publicly available, there's no reason or excuse to wing it anymore. Naturally, companies need to strike a balance between natural and genuine thoughts and opinions with the need for strong corporate controls. Fortunately, more and more companies are succeeding.
6) Don't ignore privacy concerns
Most industry participants are certain that advanced targeting technologies pose no threat to consumer privacy. That doesn't matter anymore. What matters is that consumers and the government think that they pose a threat. The WSJ article last July was just one of the stories that are slowly rousing public concern about online privacy.
You can say people are confused. You can say people are being paranoid. Or moronic. But you are in the people-pleasing business, not the people-judging business.
"Judge not lest ye be booted out on your snotty arrogant a*s, you self righteous b*stard."
(Book of Jim 1:1).
Ask Phorm if privacy concerns matter. Or now defunct Gator/Claria/JellyCloud http. Or better yet, ask Jon Leibowitz, FTC chairman .
The self-regulation efforts from a cross-industry coalition, encapsulated in the "Power i" program, have created a great means of informing the public and enabling cool, rational decisions about advanced targeting. Get on board.
Many thanks to the fine people at iMedia Connection for publishing this first.
Who doesn't love a TV blooper? They are fun to watch -- flubbed pronunciation, forgotten lines, double entendres. You don't even need to be a mean person to enjoy them because bloopers are mistakes, but not deadly ones.
In an environment as dynamic and ever changing as digital, it's natural that even the smartest in the digerati make bloopers in judgment or execution. Many such online marketing bloopers are the result of the changing reality brought on by the advent of digital, and as such are quite understandable. But that doesn't mean we can't learn from them.
If the definition of insanity is doing the same thing and expecting different results, then perhaps this article can help us avoid straightjackets by pointing out a few digital bloopers and what we should take away from them.
1) Don't assume you can isolate messages
The web provides enormous opportunities to segment and tailor creative messages. But it also breaks down demographic, geographic, and other boundaries. Segmentation and tailoring does not prevent some segments from hearing and seeing what you are saying to others.
Remember this ad from Absolut, which depicted the pre-1848 Mexican and U.S. borders? Run only in Mexico, the ad was designed to be a funny nod to Mexican pride. The brand surely felt it had found a powerful visual to help la gente identify with the brand. Unfortunately, right-wing American bloggers got hold of the ad, and within hours were lined up to ban Absolut, call it reverse racist, and on and on. Former CNN personality Lou Dobbs switched to Grey Goose over it.
Now, in large part due to income disparities and population, Americans drink more Absolut than Mexicans. So the company had to scramble to apologize to Americans who might have been offended. Here's what the brand issued:
"This particular ad, which ran in Mexico, was based upon historical perspectives and was created with a Mexican sensibility. In no way was this meant to offend or disparage, nor does it advocate an altering of borders, nor does it lend support to any anti-American sentiment, nor does it reflect immigration issues. Instead, it hearkens to a time which the population of Mexico may feel was more ideal."
-- Paula Eriksson, VP of corporate communications, V&S Absolut Spirits
But from a digital perspective, the key takeaway is that you need to assume that everyone can see everything.
2) Avoid building the branded destination website
Most of us have created a digital something in the misguided hope that significant numbers of people care about it and our products as much as we do. If you're like me, there's a $500,000-plus error in your past that reflects this sort of "Field of Dreams" mentality.
It wasn't so long ago that lots of brands were building massive websites in hopes that consumers would spend half their online time interacting with branded games, participating in brand chats, talking to brand experts, etc. While less common these days, the branded "destination" site still appears periodically in the digisphere.
It's fairly unlikely that you can attract and hold the sort of audience you are dreaming of. Why? Because just as The New York Times shouldn't go into the chewing gum business, you probably shouldn't go into the content business. It's not what most of us do. Better to stick to what you know.
The classic example of this is Bud.tv, a $30-million experiment that folded in 2009. Now, hold the phone. I am not ragging on Bud here. If any brand could develop a compelling content destination, it'd probably be these guys. After all, the company "gets" its customer and knows how to bring the funny in a 30-second spot.
But even Bud couldn't define and deliver a place where its customers would want to "live" online. The hype and anticipation of Bud.tv were ultimately met with lukewarm consumer response -- despite a broad range of decent-to-good video, activities, and game content on the site.
The hard, cold reality: Bud makes beer, not movies and games. And you make pine-scented air fresheners or electronics or weekend getaways or whatever it is that you make. Not entertainment.
3) Don't field social media programs just before the weekend
Arguably, no one is better at marketing to moms than Johnson & Johnson, so its misstep on Motrin was a bit surprising. Motrin developed a tongue-in-cheek ad that poked fun at moms who love baby slings -- fabric baby carriers that keep your child right next to your body. Motrin suggested that moms who wear them cry more than moms who don't, presumably due to back and neck strain. Here's the ad:
The video went up late on a Friday. While of course social media is a 24/7/365 proposition, most marketing and PR people are at home on Saturdays, and probably not monitoring the social sphere for consumer reaction. But as Motrin soon learned, mommy bloggers and mommy Twitterers do not take Saturdays off.
The maelstrom of negative reactions was fierce , and it built throughout the weekend. By the time Monday came along, Motrin faced a tsunami of angry moms.
Motrin responded quickly. Down the ad came, and with its disappearance the controversy more or less ended.
We could dissect the ad and try to take creative lessons. But hindsight is 20/20. I think its best that we remember that we live in a connected world, and individual opinions matter. And when we don't participate in the dialogue about our brand, bad things happen. So never field campaigns or social media on the weekend. Because listening to early reactions is critical to ensuring success. Had the campaign gone out on a Monday, J&J could have addressed the concerns in near real time, provided it was using one of the many social insights platforms currently available. Nothing good comes from not being around at launch time.
4) Never claim "hackproof"
When a medium reaches more than a billion people, it's safe to say that there is someone out there who can hack whatever you can make. How long does it take before Microsoft launches its latest security update before the next virus hits?
It's not just software that has been hacked as well as shamed online. The people who make Kryptonite bicycle locks found themselves in a whole mess of negative publicity http://www.engadget.com/2004/09/14/kryptonite-evolution-2000-u-lock-hacked-by-a-bic-pen/ way back in 2004 when Engadget was able to pick its signature high-end lock using only a ballpoint pen.
And of course there's LifeLock http://www.lifelock.com/, which famously posted its CEO's social security number everywhere to prove how protected its members are. While said CEO was able to use the service to avoid damage to his credit, his identity was stolen many times. Meaning people used his social security number in a variety of ways, but none had material impact on his credit. Because LifeLock had stated or implied (tomato-tomahto) absolute security, it lost the PR battle, even if its CEO can still easily get a new mortgage.
In short, claiming hackproof is like waving a red flag in front of 6.5 billion bulls. You might be able to outrun the pack, but at least one is getting its horn into your gut.
5) Don't "wing" it without a social media policy
It seems that many companies have recognized the importance of social, and the value of a "live" company presence in social media. Unfortunately, some jumped straight to social media execution without first developing a sound social media policy.
Hospital nurses cell-photoing an embarrassing X-ray and posting it on a social net . Earnest social media managers making statements that are inappropriate. The number of examples in which companies would have been helped by offering explicit and well-considered social media policies is legion.
Fortunately for those who made or are making this misstep, many organizations have made their social media policies public, and reviewing these can help companies understand, anticipate, and address potential issues before they arise. With all these examples publicly available, there's no reason or excuse to wing it anymore. Naturally, companies need to strike a balance between natural and genuine thoughts and opinions with the need for strong corporate controls. Fortunately, more and more companies are succeeding.
6) Don't ignore privacy concerns
Most industry participants are certain that advanced targeting technologies pose no threat to consumer privacy. That doesn't matter anymore. What matters is that consumers and the government think that they pose a threat. The WSJ article last July was just one of the stories that are slowly rousing public concern about online privacy.
You can say people are confused. You can say people are being paranoid. Or moronic. But you are in the people-pleasing business, not the people-judging business.
"Judge not lest ye be booted out on your snotty arrogant a*s, you self righteous b*stard."
(Book of Jim 1:1).
Ask Phorm if privacy concerns matter. Or now defunct Gator/Claria/JellyCloud http. Or better yet, ask Jon Leibowitz, FTC chairman .
The self-regulation efforts from a cross-industry coalition, encapsulated in the "Power i" program, have created a great means of informing the public and enabling cool, rational decisions about advanced targeting. Get on board.
Many thanks to the fine people at iMedia Connection for publishing this first.
Wednesday, November 24, 2010
It Gets Better
I love the idea of this video. I love that Pixar and Disney sanctioned it. I love the joy in the eyes of the people in the video. And I love it that this giant corporation values struggling kids more than the bigoted opinions of those who have criticized them for this video. But most of all, I love the people for whom the video was made. It DOES get better.
Thankful!
(Thanks to MediaBizBloggers for publishing this first!)
Excuse me if I make this column rather personal this week. Because I am feeling rather thankful.
• Thankful that my Mom beat cancer this year.
• Thankful for being able to work with people I genuinely love.
• Thankful for working in a media environment that is more tsunami than placid sea. How fun is that?
• Thankful that I am one of the lucky people who has a job and an income, in a nation where far far far too many people do not.
• Thankful for health, joy, and my little ginger pup.
• Thankful for the blessing and curse of my work life: Powerpoint.
• Thankful that I get to write something and post it somewhere and people find it worth reading. All one of you. (Hi Dad!)
• Thankful for my own health and modest prosperity.
• Thankful for friends, family, and a roof over my head.
• Thankful for my Toughbook that takes a lickin and keeps on tickin.
• Thankful for Bridget Jones, my Scion XB, whom I love just the way she is.
• Thankful for the People’s Republic of San Francisco and all its quirky peculiarness.
• Thankful that the Governorship of California cannot be bought. Whatever your POV on policies.
• Thankful for Season Three of Jersey Shore. Yes, I know.
• Thankful that I have gotten to know fabulous people like Lissie Heinkele, Coco Jones, Lucy James, John Furey, and Joy Nestor this year.
• Thankful that I got to reconnect with magnificent people like Carol Phillips and Lori Xeller.
• Thankful that I got to keynote at iMedia Sydney and meet so many brilliant people with sexy accents.
• Thankful that my neglected friend Grecia got his teaching degree and is now surrounded with screaming 9 year olds. I hope they know how lucky they are. I expect they do.
• Thankful that I got to spend 8 hours at Powell’s bookstore in Portland last weekend.
• And while I still don’t care what you had for breakfast, I’m even thankful for Twitter.
• And 127 other wonderful people, places, and events.
• Thankful that Bill Bryson released a book this year. And Ian Sansom to boot.
Whether it’s things, people, relationships, bookstores, or your fingerprint-covered iPad, please take a moment to think of a few things you are thankful for. In this business it’s easy to get caught up in mayhem and tempests in teapots. But there is so much we can all be thankful for. What about you? What’s on your gratitude list this season?
Excuse me if I make this column rather personal this week. Because I am feeling rather thankful.
• Thankful that my Mom beat cancer this year.
• Thankful for being able to work with people I genuinely love.
• Thankful for working in a media environment that is more tsunami than placid sea. How fun is that?
• Thankful that I am one of the lucky people who has a job and an income, in a nation where far far far too many people do not.
• Thankful for health, joy, and my little ginger pup.
• Thankful for the blessing and curse of my work life: Powerpoint.
• Thankful that I get to write something and post it somewhere and people find it worth reading. All one of you. (Hi Dad!)
• Thankful for my own health and modest prosperity.
• Thankful for friends, family, and a roof over my head.
• Thankful for my Toughbook that takes a lickin and keeps on tickin.
• Thankful for Bridget Jones, my Scion XB, whom I love just the way she is.
• Thankful for the People’s Republic of San Francisco and all its quirky peculiarness.
• Thankful that the Governorship of California cannot be bought. Whatever your POV on policies.
• Thankful for Season Three of Jersey Shore. Yes, I know.
• Thankful that I have gotten to know fabulous people like Lissie Heinkele, Coco Jones, Lucy James, John Furey, and Joy Nestor this year.
• Thankful that I got to reconnect with magnificent people like Carol Phillips and Lori Xeller.
• Thankful that I got to keynote at iMedia Sydney and meet so many brilliant people with sexy accents.
• Thankful that my neglected friend Grecia got his teaching degree and is now surrounded with screaming 9 year olds. I hope they know how lucky they are. I expect they do.
• Thankful that I got to spend 8 hours at Powell’s bookstore in Portland last weekend.
• And while I still don’t care what you had for breakfast, I’m even thankful for Twitter.
• And 127 other wonderful people, places, and events.
• Thankful that Bill Bryson released a book this year. And Ian Sansom to boot.
Whether it’s things, people, relationships, bookstores, or your fingerprint-covered iPad, please take a moment to think of a few things you are thankful for. In this business it’s easy to get caught up in mayhem and tempests in teapots. But there is so much we can all be thankful for. What about you? What’s on your gratitude list this season?
Thursday, November 18, 2010
Wednesday, November 17, 2010
Should Your Brand Join the Social Couponing Craze?
Thanks to iMediaConnection for publishing this first.
True confession: I am a group coupon addict.
For me it's about the whole "insider" psychology. That I am in on a really special offer, thanks to my personal network. I never thought I'd find anything involving a screen that's more fun than last instant bidding on eBay, but group couponing is it.
What it is
If you're not in on this particular trend yet, let me give you a nutshell explanation. A company puts a great offer (like 50-75 percent off) up on one of the couponing sites, and makes the offer conditional on enough people accepting it. If you're an interested consumer, you actually buy the coupon (for example, paying $5 for $10 worth of store merchandise credit) and then publicize the offer to as many people in your network as possible, so that enough people indeed do buy it. When the hurdle is crossed, the offer is yours. If not enough people decide to buy the coupon in the time allotted, the offer vanishes.
Mr. and Mrs. America are definitely spreading the word on their favorite offers. This business segment is arguably the hottest in digital at the moment. The largest player, Groupon, has experienced more rapid growth than any tech startup ever. Ever.
That's what's in it for the consumer. But what about for brands? Some early mover brands have seen blockbuster results. Gap, for example, issued a coupon for $25 off a $50+ purchase, and more than 440,000 people bought in. If you factor in the greater than 80 percent redemption rate on the coupons, that's a helluvalot of arses in skinny jeans.
But did they make money on all those rump covers? Gap sells the coupons through Groupon, and Groupon takes a cut, reported to be 20 to 50 percent of the revenue generated. Assuming Gap got the 80/20 rate, Gap got about $11 million in revenue. The key to whether such deals are profitable is the margin on the apparel and whether coupon redeemers spent more than the minimum of $50 each. Spending $50 is pretty easy to do in a Gap, but that doesn't mean people actually did. I suppose only Gap knows for sure.
But getting more than 400,000 shoppers into retail locations is an absolutely remarkable outcome, and one that lots of businesses -- small and large -- have noted with prodigious saliva production.
If you look out into the social sphere for business comments related to group couponing, the tenor is quite positive. Certainly some retailers have noted a paucity of profitability when many customers only shopped to fulfill the coupons' minimum requirements. But most seem happily shocked by the response.
• Some businesses report jammed phone lines
• Others report fast out-of-stocks
• Still others have seen slow days and nights turn into Black Friday clones
Imagine that you own a taqueria. And on your feature day, 350 people come in for chile rellenos. It's a tremendous trial mechanism, and a way to crank meaningful brand awareness -- provided you can offer a great product at that pace and volume.
Who offers it
I cannot hope to list all of the companies that have jumped on this train. But here are summaries of some of the larger and more interesting players to get your search started. One of the big ways these services vary is in the number of local markets they serve. Some may have expanded in the brief time between the writing of this article and its publication date. so rather than listing markets, I have hyperlinked their names so you can see the latest information.
Groupon
The big daddy in the market has well over 15 million members, up five fold from just six or so months ago. Of all of the players, Groupon seems to have attracted the most national brands, though in keeping with the original vision, the consumer experience features a great many small business and local offers. Groupon essentially defined the model others are cloning, and has garnered strong press attention. In its latest money round, the company's valuation was raised to $1.35 Billion. That's with a B.
Homerun
Homerun works to inject more fun and engagement into the space, with special rewards, points systems, levels, and private offers. In sum, more of a sense of participatory community. Private offers entitle members to special deals available only to this most loyal of audiences. They also offer what they call Avalanche Deals – ones in which the price declines as more people capitalize on an offer. By taking the core offering and layering on these additional capabilities, Homerun is working to create a more consistent community with greater long term prospects. In essence, they are injecting game psychology into the process.
Wow.com
AOL http://www.aol.com/ has announced it is entering the fray with Wow.com. AOL has promised some interesting twists, as well as huge potential reach by delivering offers to the vast AOL community. That reach may be a significant advantage for leading national brands or national footprint retailers that need big volume to impact their businesses. The site isn't up at the time of this writing, but it's a potential partner you might want to look into.
Living Social
Living Social is another leading group couponing community. One of their growth strategies is to incent users to socialize deals by making their coupon purchase free if they get three others to buy. Living Social also offers something they call Deal Bucks -- a frequent buying program that rewards people for buying more offers. Using these strategies, Living Social seems a great platform for the most offer-sensitive consumers. It is likely that these people will be strong opinion influencers, given that they have chosen a platform that rewards them for having a big personal network.
KGB Deals
Similarly, KGB Deals offers KGB Cash to reward referrals and purchases. The site also does not require a minimum uptake of coupons to get a deal. Users simply need to buy the offer before the expiry.
Crowd Savings
Crowd Savings has a similar model in that they do NOT require a minimum uptake of coupons in order for consumers to get the deal. The site also makes the case that because its sales team actually lives in the markets it serves, users get an insider's perspective on the best venues and deals in a market.
Dealster
Dealster uses a referral marketing program in its battle to garner industry share. When members get their friends to sign up, they receive a $10 credit for future coupon purchases. It's a great way for them to attract the most highly connected people.
Tippr
Tippr's angle is accelerating discounts. Specifically, their program incents users to share offers by increasing the discount based upon the number of people who sign up.
There are literally dozens of others, and you should choose a partner that has strength in your core markets. Many companies currently focus on the major metros, especially in coastal "blue states", where digital acumen and interest in web-based offers is stronger. But the largest players are now available in dozens of cities nationwide.
When it makes sense
Because of the high discount required to get strong consumer uptake of an offer, it's important to really think out your social couponing strategy before you act. Basic horse sense suggests that this marketing challenge works best for brands with:
• Significant awareness and trial goals: The combination of a hot offer and the social endorsement from the sharing process can drive strong growth in awareness and trial. One might equate the impact with a sampling program except that you're actually earning some revenue, and you're connecting only with the low hanging fruit.
• Businesses trying to reactivate lapsed or infrequent users: A coupon can be a great way to stimulate former users to come back. The key to making this work for your business is a follow up strategy to get these retriers to keep coming back.
• Service businesses: Not to discount the potential value of group couponing for goods sellers, but there are clear advantages for service businesses. In many cases, a service business has lots of fixed costs (people, development, office space, utilities, etc.), with commensurately lower variable costs, because no physical good is actually changing hands. If you have the people and the locations out there, group coupons simply mean additional marginal dollars.
• High-margin goods: At more than 50 percent off plus the cut that goes to the site, you're offering a strong discount with a program like this. While this may make sense for many different kinds of businesses, it's plain that the higher your margin, the lower the risk and the higher the potential payout
• Retail businesses with uneven demand: Lots of national restaurant chains, for example, find themselves packed on Fridays and Saturdays, but slow on Tuesdays. A group coupon for a specific day can fill the seats by driving impulse dining and impacting restaurant choice at the last minute.
• Businesses expanding their retail footprint" By targeting an offer to a city or neighborhood, you can drive awareness and demand for a new location or a new offering exactly where you need it most.
Another consideration to make is cash flow. The sites typically pay their business customers in three installments, meaning that it can take some time to get all of the revenue. This shouldn't be an issue for most brands, but if you're running "dollar in/ dollar out" it's something to keep in mind.
Finally, preparation is critical. The Street recently published highlights from an interview with Utpal Dholakia, associate professor of marketing at Rice University's Jesse H. Jones Graduate School of Business. Dholakia interviewed 150 past Groupon customers to understand how they fared using the service.
So what makes for a successful social-promotion effort? "For the most part, it comes down to expectations and preparation," Dholakia says. Owners who lay the groundwork for a rush of customers do well, while those who don't prepare their employees adequately can face a backlash. Groupon's success in drawing subscribers can also be the biggest challenge for the businesses it features. Not everyone is equipped to handle hundreds of new reservations. One business owner told Dholakia about a receptionist who couldn't handle the deluge of phone calls and ended up in tears.
Conclusions
The Groupon model clearly has tremendous consumer and business appeal. Based upon the dozens of case studies that are circulating, it's plain that the tactic can move the needle on sales and customer counts. By carefully considering your business goals, the dynamics of your business, and your cost structure, you can quickly find out if the model makes sense for you. For marketers who like to dip a toe before they take the plunge, these platforms are geographically based, and it is easy for a national marketer to make an offer in a single region to better understand what they can expect from a national campaign.
Group couponing is powerful, addicting, and a whole lot of fun for consumers. And for the right kinds of businesses, can be just as compelling.
True confession: I am a group coupon addict.
For me it's about the whole "insider" psychology. That I am in on a really special offer, thanks to my personal network. I never thought I'd find anything involving a screen that's more fun than last instant bidding on eBay, but group couponing is it.
What it is
If you're not in on this particular trend yet, let me give you a nutshell explanation. A company puts a great offer (like 50-75 percent off) up on one of the couponing sites, and makes the offer conditional on enough people accepting it. If you're an interested consumer, you actually buy the coupon (for example, paying $5 for $10 worth of store merchandise credit) and then publicize the offer to as many people in your network as possible, so that enough people indeed do buy it. When the hurdle is crossed, the offer is yours. If not enough people decide to buy the coupon in the time allotted, the offer vanishes.
Mr. and Mrs. America are definitely spreading the word on their favorite offers. This business segment is arguably the hottest in digital at the moment. The largest player, Groupon, has experienced more rapid growth than any tech startup ever. Ever.
That's what's in it for the consumer. But what about for brands? Some early mover brands have seen blockbuster results. Gap, for example, issued a coupon for $25 off a $50+ purchase, and more than 440,000 people bought in. If you factor in the greater than 80 percent redemption rate on the coupons, that's a helluvalot of arses in skinny jeans.
But did they make money on all those rump covers? Gap sells the coupons through Groupon, and Groupon takes a cut, reported to be 20 to 50 percent of the revenue generated. Assuming Gap got the 80/20 rate, Gap got about $11 million in revenue. The key to whether such deals are profitable is the margin on the apparel and whether coupon redeemers spent more than the minimum of $50 each. Spending $50 is pretty easy to do in a Gap, but that doesn't mean people actually did. I suppose only Gap knows for sure.
But getting more than 400,000 shoppers into retail locations is an absolutely remarkable outcome, and one that lots of businesses -- small and large -- have noted with prodigious saliva production.
If you look out into the social sphere for business comments related to group couponing, the tenor is quite positive. Certainly some retailers have noted a paucity of profitability when many customers only shopped to fulfill the coupons' minimum requirements. But most seem happily shocked by the response.
• Some businesses report jammed phone lines
• Others report fast out-of-stocks
• Still others have seen slow days and nights turn into Black Friday clones
Imagine that you own a taqueria. And on your feature day, 350 people come in for chile rellenos. It's a tremendous trial mechanism, and a way to crank meaningful brand awareness -- provided you can offer a great product at that pace and volume.
Who offers it
I cannot hope to list all of the companies that have jumped on this train. But here are summaries of some of the larger and more interesting players to get your search started. One of the big ways these services vary is in the number of local markets they serve. Some may have expanded in the brief time between the writing of this article and its publication date. so rather than listing markets, I have hyperlinked their names so you can see the latest information.
Groupon
The big daddy in the market has well over 15 million members, up five fold from just six or so months ago. Of all of the players, Groupon seems to have attracted the most national brands, though in keeping with the original vision, the consumer experience features a great many small business and local offers. Groupon essentially defined the model others are cloning, and has garnered strong press attention. In its latest money round, the company's valuation was raised to $1.35 Billion. That's with a B.
Homerun
Homerun works to inject more fun and engagement into the space, with special rewards, points systems, levels, and private offers. In sum, more of a sense of participatory community. Private offers entitle members to special deals available only to this most loyal of audiences. They also offer what they call Avalanche Deals – ones in which the price declines as more people capitalize on an offer. By taking the core offering and layering on these additional capabilities, Homerun is working to create a more consistent community with greater long term prospects. In essence, they are injecting game psychology into the process.
Wow.com
AOL http://www.aol.com/ has announced it is entering the fray with Wow.com. AOL has promised some interesting twists, as well as huge potential reach by delivering offers to the vast AOL community. That reach may be a significant advantage for leading national brands or national footprint retailers that need big volume to impact their businesses. The site isn't up at the time of this writing, but it's a potential partner you might want to look into.
Living Social
Living Social is another leading group couponing community. One of their growth strategies is to incent users to socialize deals by making their coupon purchase free if they get three others to buy. Living Social also offers something they call Deal Bucks -- a frequent buying program that rewards people for buying more offers. Using these strategies, Living Social seems a great platform for the most offer-sensitive consumers. It is likely that these people will be strong opinion influencers, given that they have chosen a platform that rewards them for having a big personal network.
KGB Deals
Similarly, KGB Deals offers KGB Cash to reward referrals and purchases. The site also does not require a minimum uptake of coupons to get a deal. Users simply need to buy the offer before the expiry.
Crowd Savings
Crowd Savings has a similar model in that they do NOT require a minimum uptake of coupons in order for consumers to get the deal. The site also makes the case that because its sales team actually lives in the markets it serves, users get an insider's perspective on the best venues and deals in a market.
Dealster
Dealster uses a referral marketing program in its battle to garner industry share. When members get their friends to sign up, they receive a $10 credit for future coupon purchases. It's a great way for them to attract the most highly connected people.
Tippr
Tippr's angle is accelerating discounts. Specifically, their program incents users to share offers by increasing the discount based upon the number of people who sign up.
There are literally dozens of others, and you should choose a partner that has strength in your core markets. Many companies currently focus on the major metros, especially in coastal "blue states", where digital acumen and interest in web-based offers is stronger. But the largest players are now available in dozens of cities nationwide.
When it makes sense
Because of the high discount required to get strong consumer uptake of an offer, it's important to really think out your social couponing strategy before you act. Basic horse sense suggests that this marketing challenge works best for brands with:
• Significant awareness and trial goals: The combination of a hot offer and the social endorsement from the sharing process can drive strong growth in awareness and trial. One might equate the impact with a sampling program except that you're actually earning some revenue, and you're connecting only with the low hanging fruit.
• Businesses trying to reactivate lapsed or infrequent users: A coupon can be a great way to stimulate former users to come back. The key to making this work for your business is a follow up strategy to get these retriers to keep coming back.
• Service businesses: Not to discount the potential value of group couponing for goods sellers, but there are clear advantages for service businesses. In many cases, a service business has lots of fixed costs (people, development, office space, utilities, etc.), with commensurately lower variable costs, because no physical good is actually changing hands. If you have the people and the locations out there, group coupons simply mean additional marginal dollars.
• High-margin goods: At more than 50 percent off plus the cut that goes to the site, you're offering a strong discount with a program like this. While this may make sense for many different kinds of businesses, it's plain that the higher your margin, the lower the risk and the higher the potential payout
• Retail businesses with uneven demand: Lots of national restaurant chains, for example, find themselves packed on Fridays and Saturdays, but slow on Tuesdays. A group coupon for a specific day can fill the seats by driving impulse dining and impacting restaurant choice at the last minute.
• Businesses expanding their retail footprint" By targeting an offer to a city or neighborhood, you can drive awareness and demand for a new location or a new offering exactly where you need it most.
Another consideration to make is cash flow. The sites typically pay their business customers in three installments, meaning that it can take some time to get all of the revenue. This shouldn't be an issue for most brands, but if you're running "dollar in/ dollar out" it's something to keep in mind.
Finally, preparation is critical. The Street recently published highlights from an interview with Utpal Dholakia, associate professor of marketing at Rice University's Jesse H. Jones Graduate School of Business. Dholakia interviewed 150 past Groupon customers to understand how they fared using the service.
So what makes for a successful social-promotion effort? "For the most part, it comes down to expectations and preparation," Dholakia says. Owners who lay the groundwork for a rush of customers do well, while those who don't prepare their employees adequately can face a backlash. Groupon's success in drawing subscribers can also be the biggest challenge for the businesses it features. Not everyone is equipped to handle hundreds of new reservations. One business owner told Dholakia about a receptionist who couldn't handle the deluge of phone calls and ended up in tears.
Conclusions
The Groupon model clearly has tremendous consumer and business appeal. Based upon the dozens of case studies that are circulating, it's plain that the tactic can move the needle on sales and customer counts. By carefully considering your business goals, the dynamics of your business, and your cost structure, you can quickly find out if the model makes sense for you. For marketers who like to dip a toe before they take the plunge, these platforms are geographically based, and it is easy for a national marketer to make an offer in a single region to better understand what they can expect from a national campaign.
Group couponing is powerful, addicting, and a whole lot of fun for consumers. And for the right kinds of businesses, can be just as compelling.
Friday, November 12, 2010
True Confession: I Once Had The Journey Afro
There is but one picture left, no negative, and I have the photo.
CTRS and One Hundred Thousand Count Von Counts
Thanks to MediaBizBloggers for publishingn this there first!
It's no new observation that digital enables marketers and their agency counterparts to access tons of metrics. So many that for many media people, two days of the week are devoted to collecting and visualizing bajillions of data points in complex reports.
Reports that, let's face it, are often given no more than cursory examination. Why? Because most of the numbers are meaningless, or at least are meaningless until someone takes the time to really examine them, which few actually get around to
Most of us digital marketers have spent years channeling Count Von Count, the affable vampire from Sesame Street who, upon entering any room, would begin measuring virtually every object in his line of vision. 7! Seven apples! 6! Six balls! 1. One Snuffalufagus!
A good way to teach kids numbers, but not a great skill for cocktail party success. Or, for that matter, brand marketing.
Our medium gives us access to data on every aspect of consumer exposure and interaction. Impressions, clicks, interactions. Interaction rates, Interaction times. View through conversions. Interaction rates by spot on the ad. Video views. Video view times. Impressions by in market shoppers. Impressions by metro. Interaction rates by daypart. That ability to count has turned us into 100,000 Count Von Counts.
7 million! Seven million impressions! 6 thousand! Six thousand complete video views! 74 thousand! Seventy four thousand clicks during the period 12-4 PM!
Trouble is, many of these metrics aren't in and of themselves terribly relevant at answering crucial marketing questions. Sometimes some of them have value, but often they don't mean much at all. And the most commonly referenced one of all, CTR, is about as meaningless as they come for most brands.
The traditional side of media often feels smug about our incessant counting. They know that many of our metrics are of little value. But at the same time they aren't offering anything better. For a decade they have been doing jazz hands to cover up the fact that they have few reliable metrics to offer.
The solution to tiresome and irrelevant counting of everything is NOT counting nothing.
As new platforms and technologies raise the value of digital impressions and make TV and Print impressions less passive and transitory, our converged industry needs to take a new approach to measurement. We need to figure out the data points that matter and only count those. With this smaller number of metrics, we can devote more of our time to figuring out brand impacts and optimization strategies to improve effectiveness.
If clicks don't matter to your business objectives, why count them? Having access to them almost inevitably leads to using them as a surrogate measure of brand impact. They are, after all, eminently understandable, and can be boiled down into a simple figure. This makes them almost magnetic.
With the myriad opportunities available for data collection, we can do a lot better than we are now. But doing so requires the time and focus to devise a real measurement strategy.
Finding Your Social Mojo
Thanks to MediaBizBloggers for publishing this first!
I’ve been working on a presentation to give at iMedia Sydney Australia, built around the idea that we need to think about creating relationships with consumers as akin to courtship, nuptials, and married life. In it I am using examples from about 20 countries to show how a variety of brands are courting their customers socially.
And the most salient observation I can make is that the idea of a one-size-fits-all approach to brand participation is patently absurd. Our collective rush to identify and exploit digital magic beans sometimes makes us forget that our brand campaigns have to be as unique as our brands.
For indeed social is simply participatory marketing, not a medium. Social is permeating every media channel, reflecting the truth that consumers prefer personalized experiences across the board, not just on sites where we friend one another.
Preparing the presentation has been a great experience because it has forced me to seek out examples and industry news from across the globe – which is not something I want to do during a typical week. I’ll leave to you to interpret whether that is marketing xenophobia or simply focusing on what matters most in my job today.
In my quest for examples, I’ve learned about Walls, a UK food company that has a multimedia effort showcasing the unique eccentricities of Britons. The campaign asks ordinary Britons to compete to appear in ads where they can showcase their peculiar passions. Mind you, this in a country with a high standard for eccentricity. Where an obscure aristocrat collected thousands of wigs that stuffed every room in his manor house from floor to ceiling. A country where Chelmondeley is pronounced “Chum-Lee”. A place where yeast extract is a delicacy. There is a unique, delightful form of crazy that Britain has a lock on. Tender Britons', please note that I point to your obscure behaviors with loving support. Long live the Belisha Beacon!
But back to the contest. Entries range from “Extreme Ironers” who press clothes while balanced on speeding cigarette boats, to a knitting circle that has created a blanket the size of a soccer field. Where seniors have organized a club in which they compete at pole dancing. Where other people delight in making ginormous versions of snack foods because…well just because. And the whole kit and caboodle of this effort goes far at reinforcing the uniquely British “Proper Food” Walls excels at producing.
The campaign is superb.
And so is the wonderful Australian Tourism effort in which Aussies were asked to submit photos of their favorite hideaways across the country. More than 29,000 people participated, providing what has to be the only travel site that didn’t use (or for that matter, need to use) pro photographers to capture azure ocean vistas and the Opera House at sunset.
Personally, I’d much rather see a snapshot of someone’s favorite billabong.
Another: the fascinating Raymond Weil campaign that asked consumers to describe in their own words what the brand should be in the future. To read these entries is to vicariously experience sincere love.
Which is not to say that good old Yankee ingenuity is dead. Not by a long shot. Pepsi’s Refresh Everything effort and its remarkable charitable overlay are growing that brand as it cures social ills that for whatever reason our government is unwilling or unable to address.
My point is each of these campaigns is wildly different. Each took the essence of its brand and its customers and shaped a participatory initiative around that message. They all recognized that social isn’t a channel. It’s people. People who are anxious to be part of the brands they love.
I for one am delighted to participate in a marketing era where a major national brand is delighted to associate itself with extreme ironing.
I’ve been working on a presentation to give at iMedia Sydney Australia, built around the idea that we need to think about creating relationships with consumers as akin to courtship, nuptials, and married life. In it I am using examples from about 20 countries to show how a variety of brands are courting their customers socially.
And the most salient observation I can make is that the idea of a one-size-fits-all approach to brand participation is patently absurd. Our collective rush to identify and exploit digital magic beans sometimes makes us forget that our brand campaigns have to be as unique as our brands.
For indeed social is simply participatory marketing, not a medium. Social is permeating every media channel, reflecting the truth that consumers prefer personalized experiences across the board, not just on sites where we friend one another.
Preparing the presentation has been a great experience because it has forced me to seek out examples and industry news from across the globe – which is not something I want to do during a typical week. I’ll leave to you to interpret whether that is marketing xenophobia or simply focusing on what matters most in my job today.
In my quest for examples, I’ve learned about Walls, a UK food company that has a multimedia effort showcasing the unique eccentricities of Britons. The campaign asks ordinary Britons to compete to appear in ads where they can showcase their peculiar passions. Mind you, this in a country with a high standard for eccentricity. Where an obscure aristocrat collected thousands of wigs that stuffed every room in his manor house from floor to ceiling. A country where Chelmondeley is pronounced “Chum-Lee”. A place where yeast extract is a delicacy. There is a unique, delightful form of crazy that Britain has a lock on. Tender Britons', please note that I point to your obscure behaviors with loving support. Long live the Belisha Beacon!
But back to the contest. Entries range from “Extreme Ironers” who press clothes while balanced on speeding cigarette boats, to a knitting circle that has created a blanket the size of a soccer field. Where seniors have organized a club in which they compete at pole dancing. Where other people delight in making ginormous versions of snack foods because…well just because. And the whole kit and caboodle of this effort goes far at reinforcing the uniquely British “Proper Food” Walls excels at producing.
The campaign is superb.
And so is the wonderful Australian Tourism effort in which Aussies were asked to submit photos of their favorite hideaways across the country. More than 29,000 people participated, providing what has to be the only travel site that didn’t use (or for that matter, need to use) pro photographers to capture azure ocean vistas and the Opera House at sunset.
Personally, I’d much rather see a snapshot of someone’s favorite billabong.
Another: the fascinating Raymond Weil campaign that asked consumers to describe in their own words what the brand should be in the future. To read these entries is to vicariously experience sincere love.
Which is not to say that good old Yankee ingenuity is dead. Not by a long shot. Pepsi’s Refresh Everything effort and its remarkable charitable overlay are growing that brand as it cures social ills that for whatever reason our government is unwilling or unable to address.
My point is each of these campaigns is wildly different. Each took the essence of its brand and its customers and shaped a participatory initiative around that message. They all recognized that social isn’t a channel. It’s people. People who are anxious to be part of the brands they love.
I for one am delighted to participate in a marketing era where a major national brand is delighted to associate itself with extreme ironing.
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