Customer World

Interview with Drayton Bird - " Internet has accelerated direct marketing"

Paul Dervan had a chat with Drayton Bird, one of the legends of the Direct Marketing industry. His answers are incisive and pretty telling. Take a look:

Me: What is the single biggest change you noticed in direct marketing industry in the past 15-20 years?

Drayton: More people are doing it, less well.

Here are some of the things that have had significant effect on the marketing industry over the last four decades:

• The  computer and particularly the speed with which data is available.
• Databases. Now all organisations want databases because they realise the value they hold. They have seen how easy it is to capture data via a website.
• Direct  marketing attracting more investment than general advertising
• Personalisation  and customisation has allowed more relevant communications to be  produced.
• The  decline in educational standards, especially literacy and numeracy
• The  internet
• The way in which the idea of the brand has come to seem important, even to people who have nothing to do with marketing – and who misunderstand it
• Inflation, especially in media costs, where it has far outpaced general inflation, leading people to seek new ways of marketing
• The greater desire for individual expression, frustrated by the move among those in power towards ever more centralisation. This mirrors what has happened in politics – e.g. the European Union.
• Compliance  – and the obfuscation of language in the pursuit of covering  the corporate rump.
• Changes  in attitudes to sex – greater openness, particularly in  advertising imagery.
• The  increasing use of marketing techniques – usually badly and  often dishonestly applied – by government.

                      

Me: There seems to be a blur between direct marketing, ATL advertising and digital marketing. Do you find this?

Drayton: Yes there is. This is a good thing. This is not a difficult business to master and people should be able to understand and practice all three, since customers switch happily between them. Customers and their motivations do not change even if the media do. Actually as I point out in the new edition of Commonsense Direct and Digital Marketing, the word “digital” is a misnomer. We have digital TV and radio, but marketers don’t think of them as digital.

Me: Is the future of direct marketing looking bright?

Drayton: Yes. My former colleague Shelley Lazarus, now CEO of Ogilvy Worldwide said at the DMA conference not long ago that today, all marketing is direct. This is because of the internet, which is accelerated direct marketing.

Me: What are the common mistakes made by marketers?

Drayton: Here are some I listed recently for another interview...

• Too  many amateurs in a business that calls for professionalism.
• They  fail to study the past – or read.
• They  “seek applause instead of sales” – Claude Hopkins  said that over 80 years ago.
• They forget it’s just salesmanship and imagine it’s a branch of the entertainment business. Entertain, by all means, but make sure it’s relevant.
• They  invest before testing – why guess when you can know?
• They don’t measure. If you can’t measure it, you can’t manage it. What sane person invests in anything without measuring return on investment? Marketers do every day. Why? Because firms see it as an expense, not an investment. That’s why they cut marketing expenditure in recessions.
• They  believe research will supply the answer – when it is only  indicative.
• They  don’t study business as a whole - all they think about is  marketing.
• They  fail to explain clearly to their colleagues what they are doing –  maybe because many don’t really know.
• Over-optimism  and a naive belief that marketing, especially advertising will solve  business problems.
• Hiring marketing directors and senior agency people without checking their credentials. There is too little due diligence in our industry.
• Uncritical  acceptance of “gurus” who are often just recycling old  truths. Me, for instance.

               

Me: What advice would you give anybody starting off in marketing?

Drayton:

• Read. It’s a very agreeable feeling when you walk into a meeting knowing more than anyone else.
• Study people. They are the only profit centre in your business. If you really understand your customers you multiply your chances of success.
• Constantly ask yourself: “What if?” - that is how ideas are born. You need an inquiring mind to succeed in this business.
• Take an interest in as many things as possible outside marketing, which is a very dull subject. If you think about nothing else you will end up a tremendous bore – to others and yourself.

Customer conversations in a world without identities

I recently read a very thought provoking article by Alec - " Hankering for a world without identity or federation". Also, a lovely follow-up article on the same topic by Andriana. Also, there's a nice comment by Christopher Carfi on the same topic.

These articles raised serious questions in my mind about how marketers, in the future, will have to build conversations with customers without identity. The key issue raised in my head was - increasingly as more and more get customers get online or mobile( in developing markets like India, China and the like) they would like to control their identity & conversations with brands. I presume things like DNPC( Do Not Place Cookies), DNL( Do not link ads(without permission)), DNT(Do Not tag along - SMSs )etc. will increasingly gain importance.

At the same time , these mediums are also being used for transactions and  purchases more and more. Many of these articles talk about protecting identity but when you combine identity with transactional information, interests in various social networks,memberships in certain sites etc.- it provides a new dimension in building conversations  with customers.Marketers will need to use data from multiple sources -in real time- to understand customers, get into their inner circle by really being valuable to their lives not just providing or sending a marketing messages. Also, identities need to be confirmed from multiple sources of paths from where customers come. There is a nice diagram from Adriana that I have picked-up which brings this point alive:
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The key challenges and the winners of tomorrow will be the ones who are able to build conversations without identities. 

Personal recommendations are more authentic

As many channels start to converge, the chatter among customers about products, benefits, uses, problems, referrals is increasingly gaining a lot of attention. It's so easy  today to get on to the web and know what customers think about your products. The ability to fuse this data along with your transactional & attitudinal data that lies within your organization and doing analytics on this information is going to be the next inflection point for marketers.

Here's a presentation by Paul Isackson that brings out the power of this chatter and influence on customer behaviour.

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The laws of physics behind marketing methods

I read an interesting post about how the rules of mass marketing, direct marketing & social media are so different in approach, content, analysis and results. Therefore, for marketers, the challenge of applying & measuring each of them is conflicting, different & downright confusing. The truth though is that data(at an individual customer level) is becoming the DNA for marketing and incremental byte-sized data from each of them come at different points of time - controlled to near-real to real.The key, therefore, is knowing how to use it, apply it basis the method of marketing marketers are executing or seeking solutions for, not making the mistake of transposing one type of marketing hypothesis to the other etc. are key factors of being a successful marketer tomorrow.

Take a look:

Mass advertising is like Classical Physics; large-scale, mostly intuitive and somewhat predictable.

Direct Marketing is like Atomic Physics; small/medium-scale, mostly logical, but the segmentation aspects start to show some bumps and troughs on what appeared to be smooth and simple.

Social Media is more like Quantum Physics; small-scale, counter-intuitive and usually unpredictable.

• Traditional marketers deal with everyones opinions in big bins like sales figures, national focus groups, opinion polls, etc. These roll-ups average out the inconsistencies of individuals and blur together to form tendencies, trends and preferences. The actions taken in mass marketing can expect a relatively consistent result (i.e. send out a coupon and you can expect a certain level of redemption and sales revenue to come from it and the larger the audience, the more likely it is to average out at a predictable result). This is the world that marketers are familiar with and all-in-all it makes sense if you know the system.

• Social Media on the other hand acts on the niche and individual level where things are a lot less certain. The complex nature of blog posts is hard to parse out into definitive numbers and trends.The lack of large numbers makes the reaction and result of social media efforts difficult to determine and measure. It is much more difficult to roll up all of these disparate opinions into a meaningful decision than to look at an opinion pie-chart.So in essence, social media tools have given marketers a microscope powerful enough to see what is going on at smaller scales.

...many marketers in the classical camp are not very happy with what they see, because it doesn’t confirm what they thought they knew. Decisions which appear obvious when looking at large sample sizes becomes more nuanced and contradictory when you see everyone as an individual.

Gartner CRM 2008 Summit

I was just going thro' some reports on the Gartner CRM 2008 summit. There are some highlights which I  saw was not new or earth-shattering but definitely makes a lot of sense to reinforce once more:

• Act on feedback, deploy changes and communicate actions to employees and customers - companies should view every contact with customers as an opportunity to deliver brand values and standardise on the business feedback management tool across the organisation and for all communication channels.
• Design processes from the outside in - most process redesign is done with the objective of improving operational efficiencies rather than to improve the customer experience; which requires the organisation to identify which processes matter most to customers then set about identifying what to improve: an outside-in approach.
• Act as one organisation to ensure consistency - the customer may interact with many parties as part of his or her business with a company. The challenge for the company is to ensure that information gleaned at one interaction is not forgotten in the next channel.
• Be open - organisations that want to improve the customer experience often become more open. Being more open may just mean opening up more channels or opening hours but it can mean much more. For example, some firms establish an environment where customers can support, promote, defend or refer their products and services through an online community.
• Personalise products and experiences - some personalisation options are simple, such as a website that enables customers to monogram products, while others are more complex, such as tailoring and personal pricing.
• Alter attitudes and employee behaviour - employees’ actions are often the most powerful improvements in a customer’s experience. Companies can alter employee behaviour in three primary ways: recruit the right types of employees, ensure standards such as policies, procedures and governance structures, and create training programmes and incentives that can modify employee behaviour patterns.
• Design the complete customer experience - many organisations have no plan or design for the customer experience. Companies with a focus on selling experiences focus on designing experiences. Customers of Disney, for instance, told it that difficulties in leaving the amusement parks often spoilt the experience, so the firm has worked to improve parking and traffic at its facilities.

My View:  The key question really though, is how do we enable all of this in organizations - to me it is about execution-employee focus. I think there is only a small mention on how do we reward, appraise and evaluate employees who should make this happen. This is really where the pieces begin to fall. There are conflicting KRAs in different departments and hence there are no compelling reasons to deliver a consistent customer experience. To put it bluntly, "if it does not hurt, it does not matter!"  This is where it needs to begin and end as the puzzles in the middle are put together!

Do you know how to build analytics from conversational databases?

Peter Kim of Forrester has written a thought-provoking article on the future of the advertising agency. The report argues that consumers now rely less and less on marketing messages when in buying mode. Instead they seek guidance from family, friends and others in their respective communities to guide them toward purchase decisions.

Peter’s views via AdWeek

(Agencies are) “in “a world of hurt” because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines. What it is calling “the connected agency” would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns”.

My View:

As communities & conversations become more and more important, there is a need to understand how to build analytical models around huge "conversational  databases" that will emerge. The ability to mine data and conversations together, will become a  huge competitive advantage for service providers. The ones who will succeed are the ones who will be able to overlay the traditional transactional data with conversational data. This is a skill that needs to be built and nurtured if brands and service providers have to succeed in the future.

Understanding the power of customer lifecycle

David Baker provides some interesting insights on customer lifecycle. I quite like the idea of identifying "switch points" when a customer is likely to switch to another product/brand or is ready to move to a product in the higher tier. The key question to me though is the ability of companies to identify such "customer states" or "behaviour states". Marketing needs to quickly start learning that art of using customer information, drill down and observe these changes in customer patterns and take appropriate action.

He writes:

If you are like most people, you have stages of life and all things around you; people and environments change dramatically over time. We have an early life stage where we learn the primary elements of surviving in this mixed world, the basics, as we could call it. This is where we form our basic judgments, values and shape who we are and the paths we'll lead. This is where we learn to develop our community of generations, or simply break out and build our own communities. We have many milestones that we go through: high school graduation, college for some, young adult life in the working force, family development and planting roots into a community. We then drift into the middle stages of our life, where many foster these communities and evolve the next stage of life till we get to the celebrated later stages of our life and bask in our wealth and watch our families grow up.

A customer lifecycle is just that. It is the foundation of consumer involvement with your brand over time. A customer lifecycle can shift over time, as consumers come in and out of different lifestages.

The key to marketing exactness in developing a lifecycle program is to identify "switch points" when a customer is likely to shift away from your brand, consider new alternatives and potentially develop some brand affinity with your competitor. Many in the marketing space trigger off of key income milestones. We graduate from college, we get married and have dual incomes, we start a family, we invest in our first home, we buy our first automobile, we consider life insurance as a means of protecting our family, we look more closely at investment options. All are viable triggers.

Don't purge that consumer from your database or program if they don't respond; don't purge them if they don't buy. Look deeper and see if a lifestage is influencing their involvement with your brand. That's the essence of marketing!

NYSE CEO Report 2008 - Focus on the customer

Frank Capek drew my attention to a recent report  on how customers & devoting signifcant executive time on managing customers will be central focus of CEOs during 2008 (Report)

From the executive summary:

”The first theme is that this may be a year in which there is renewed vigor around the customer - 2008 may be a year where many CEOs put the customer at the top of the long list of issues on which they must focus. Why?  Simply stated - customers are at the core of growth.  Here are a few points from this year’s study that are the foundation of this theme:

• CEOs are planning greater investment, both budget and time-wise, on customer relationship management.
• The importance of sales growth as a performance measure has increased since the prior study. Customers are the engine of sales growth.
• Brand, reputation, and investments in corporate social responsibility are more important this year - all efforts that are focused on the winning the hearts and minds of the customer.
• While many CEOs say it is easier to attract customers than it used to be, many, particularly outside the United States, say it is getting harder to retain customers. CEOs recognize that losing customers can be costly.”

Key take-out: It's heartening for me to note that managing customers will be on top of CEOs' agenda. To make it a reality,I think they will have to spend significant time in driving it down the organization - amongst their business heads and their ranks. This has always been a key challenge as there are a lot of issues regarding channel conflicts, change management, marketing budget allocation, linking performance incentives wrt customer management goals, technology investments, profit & cost allocation etc. that will need their focus, to drive this kind of a culture in an organization. Also, they will have to invest significantly in identifying metrics and measurement dashboards around how customers are being managed real time in an enterprise and drive this relentlessly across lifecycle of their customers over the next couple of years once they make a start in 2008.

 

Add social value to your customer's financial value

Forrester has some interesting insights on the growing importance of social value in determining customer value:

• As marketers, we find ourselves relying more and more on consumers to impact others in their purchase decisions.  Evaluating customers based only on their business or financial value - such as my much-loved Life Time Value, or an operation's ROI - is *has been*. 

What's social value?

          I've simplified it into 3 components:

1) A customer's knowledge and involvement - in short, his level expertise  and  interest  in the  category and brand. 

2)  How he participates, and the value of his connections - what social activities is he involved with (both on and offline) and where (on what networks is he active).  The value refers to the value of the connections themselves:  are the communities more tightly-knit or diffused, are they public or more intimite.

3) The number of contacts the customer has in each network.

Your CRM or loyalty program members and active web users would be great starting points for social scoring. 

Customer Relationships are Conversations

There is a lovely little post by Valeria Maltoni where she tracks a post in Tom Peters blog on " What is customer relationship? " She writes:

The working definition they’ve come up with is:

A relationship is an ongoing conversation with a customer, in which the customer never thinks of you without thinking of the two of you.

Customer relationships are conversation only and if there is an unwavering commitment on the part of the company to make it so. Let’s not forget that in exchange for providing a product or service, the company gets compensation.

So far, the best reasoning I read about the whole discussion comes from Paul H in the UK:

customer relationship should be what the customer wants it to be. We want that to be a human relationship.

While it matters how we think about customer relationships and approach the opportunities we have to begin or continue these conversations with a mindset and attitude of service...

Getting your blog strategy right

If you are a company having a blog where potential or current customers visit, Greg Verdino has some great advice on how to make it interesting and compelling:

"..we put together this simple graphic that presents the 7 Strands of Blog DNA - the key elements that, when combined in a unique way, make any given blog what it is.  Original, compelling and unlike anything else on the web."

Secrets to building a customer-centric organization - # 1

I have been coming across some interesting quotes (which resonate a lot & appeal to me) as building blocks towards creating a customer-centric organization. There is no one formula but I thought I will blog about them (as and when I find them), aggregate them here so as to serve as a resource for all. Here's the first!

TiVo of the Online World

NY Times has an article on whiting out of ads in the online world thro' a software called Adblock Plus, very much akin to TiVo in the offline world. Adblock is an open source software and has already over 2.5 million users!! Here's an example of how a whole business model of advertising will get hiccups with applications such as this in an online world.

The key point however to me is that in an online world the traditional model of advertising based on interruption, will not work. Else, consumers will take control and reject them with applications like Adblock plus. Hence, the old world form of communication - banners, emailers belong to the Advertising 1.0 world. SEM, SEO are at least a lot more contextual but even these will have to evolve as they will become blindspots in some time.

However communication in the online world will have to change from "Informing" to " Entertaining". Hence, we will need a lot more "Content thinkers" rather than "creative Copywriters/Art directors" who are trained to "sell" products or develop "messages". Consumers will consume content that's interesting, involving and participative.It's got to have some gossip value, surprise value, upgradable value to consumers so that they can pass it along with their comments or inputs. To me the more I think, the online model of communication has to have a mix of  TV programming, TV commercials, event marketing, promotions, traditional DM rolled into one.

It's got be as "unadvertising" as possible. I guess only that format will lead to a lot more believability, credibility, have some retention value in consumers' minds and will not be blocked!

In the online world, we need to forget the word " Advertising" and think "Contentization" .

Attn: CEO - Great marketing + Great Technology is the only way forward

George F.Colony CEO, Forrester, has written a brilliant paper on how technology has broken down the barriers that existed between companies and customers. In an era where the 30-sec TV Spot and newspaper ads are dying, over the last couple of years, I too have come to firmly believe that marketing and technology departments in companies have to come together and work closely, if companies want to build truly tangible value for their customers. 

George goes on to explain how CEOs need to pay attention to this increasingly:

• Marketing and technology in your company must work together to design and implement your Web 2.0 strategy. And you, and only you, can get the dogs and cats to interbreed. It's an unnatural act, but one that must occur before your company can become an opportunist, rather than a victim, in the world of Web 2.0.
• You may try to restrict your digital content through laws, rules, digital rights management, and/or security systems. The cold reality remains that customers, citizens, consumers want what they want, regardless of how you may try to restrict them. They see the power of digital and its inherent flexibility.
• You've got to earn the respect and allegiance of your customers every day — both of which can wither with unparalleled speed (see Dell and the flaming batteries, circa 2006).
• Get your marketers to throw out those 30-question customer surveys and focus on one question: "Would you recommend this product or service to a friend or colleague?"
• After eight years of evaluating more than 1,000 large corporate Web sites, Forrester found only 3% with passing grades. The vast majority are hard to use, confusing, poorly designed, and cast an unfavorable shadow over the brand.
• It's now a two-way conversation. Listen, respond, and talk intelligently. Stop dictating to customers. It's your customers, not you, that have the power.

Lovely stuff and worth putting into action rightaway!

Which promotions do consumers trust?

There's an emarketer report on what US adults find worthwhile and trust when it comes to promotions. To me, it's a benchmark of how consumers may see them across different geographies too. Take a look: 

What does it take to succeed as a marketing professional in the future?

If you want succeed as a marketing professional today, there are a new set of skill sets that you need to learn and practice. Ad Age has a fantastic article on this. While it is focussed on the CMOs, it is relevant to every marketing professional at any level .Here's the topline:

Here are the top five things you need to do now:

• Immerse yourself in direct marketing, CRM and database/analytics, so you can manage your personal transition from a mass marketer to a one-to-one marketer.
• Immerse yourself in the internet and understand best practices in website design, e-mail marketing and e-commerce (online sales and lead generation), both within your industry sector and in other sectors.
• Learn everything about new media, including search-engine marketing and optimization tools, because these are becoming drivers of future integrated-marketing and media efforts.
• Do a deep dive in mobile marketing -- the iPhone and other mobile devices are the future communication hubs for receiving just-in-time communications and incentives -- at the point of sale. The mobile phone is also rapidly becoming a payment system where funds can be automatically transferred at the point of sale.
• Hire people at the VP levels and below with different skill sets -- for example, more engineers with Ph.D.s -- people who understand the numbers, who focus on ROI. In other words, surround yourself with VPs who have the relevant skills in database/analytics, online marketing/new media or e-commerce that you may be lacking. Then learn from them.

Remember, the future is now.

The rise of immediate media

Om Malik  has a fantastic post on this topic:

Our whole lives are about doing more in less time, trying to cram everything into 24 hours, in a day that is filled with constant interruptions. Instant messages, emails, and the constant chirping of cell phones have surely and slowly squeezed our attention spans. We have responded this to customizing the digital world according to how lifestyles.

We have TiVo to personalize our television, watching only what we want. We plug in our iPods, using playlists, instead of listening to the radio waiting for our favorite tune. Like TiVo and iPod, the web allows us to customize what we want to read. Blogs offer short bursts of information in an easy to digest format that fits nicely with this socio-culture change happening around us.

Blogs, also have the ability to focus on niche topics, allow almost anyone to publish, and then have it distributed over high-speed Internet connections instantly is what can be summed up in two words: “Immediate Media.”

This immediate media is information simply adapting to the new methods of distribution. At the turn of the last century, telegraph was used to spread the news. Telephone technologies gave newspapers a new sense of urgency and made distant events a weekly, and for some a daily affair. Radio broadcasts made news more real-time, making it part of our daily life. TV brought news into the living room, made it more personal. Cable and the birth of CNN made news a 24/7 phenomenon.

The Internet in its early version upped the tempo, and with the rise of high speed, always on connections, information is now an unending stream. If you follow that thread, then with can easily see that with each transformation, technology compressed the news cycle a little, and made distribution a bit more efficient. The more we connect, the more we want to know but in less time. Blogs are a reflection of our time-deprived times.

Virtual Kitchens - Consumers get involved

NY Times has an interesting article on how recipe searches on the internet are gaining huge interest among women:

Roughly 50 million people, or one-third of active Internet users in the United States, visited food sites in May, Mr. Cassar said, with sites like foodnetwork.com and kraft.com attracting more than seven million people. If recent and expected changes are any indication, these visitors are looking for friends as much as they are seeking recipes.

Condé Nast’s epicurious.com late last month introduced My Epi, a set of online tools perhaps best characterized as Facebook for foodies. Readers have long been able to compile their own recipe collections on the site. But now users on Epicurious, which was among the earliest recipe-sharing destinations on the Web, can search the virtual recipe boxes of other users, create profile pages for themselves and sift through profiles of other users with whom they may share similar interests.

In the coming months, marthastewart.com, the online division of Martha Stewart Living Omnimedia, will also allow users to collect, share, rate and review recipes with other users on the site. “And that’ll just be the beginning of our community and personalization initiative,” said Jody Jones, the editorial director of the Web site. “These are big growth areas for us.”

Is Joost leveraging the power of internet?

NY Times reports Joost, the Internet television service being developed by the founders of Skype, has lined up several blue-chip advertisers, including United Airlines, Microsoft, Sony Electronics and Unilever, as it prepares for its introduction. While some advertising on Joost will resemble traditional 30-second television spots, others will take advantage of the interactive qualities of the Internet.Instead of interrupting the programming, these ads will appear as the shows are running with a small box called a “hand-raiser.” Viewers who click on the hand-raisers will be sent to an “overlay,” or menu of content created for Purina. “It’s a whole new way to market to people,” Mr. Renshaw said. “You’re combining the best of the rigor of direct marketing with the richness of the Internet and the entertainment of television.”

I see quite a lot of different challenges when it comes to launching an internet television service. It's unlike the traditional TV network model. Let me tell you why:

• Global Vs Local Viewers: Last week, I downloaded Joost TV beta to my desktop. I am from India and I didn't find the content really relevant for an Internet TV viewer out of India. The traditional TV model of the past has always been restricted by geographical footprint and hence content was a lot localized. The internet TV model is a lot more global, hence programming content has to be a lot more inclusive. Imagine internet users from China, Korea, Japan and the like. They might not find Joost TV currently engaging and relevant. But, they have access to Joost TV!
• Build-up vs Scalability: The Network TV model builds-up viewers over a period of time by way of subscriptions, signal availability etc. The internet TV model is scalable right from day 1. The launch of Joost TV in the mind of an avid internet consumer is a worldwide launch and not a geography launch. Millions of internet users will want to use it right away if content is engaging and entertaining. Hence, Joost TV will need programming partners across globe right from its inception not just from one or two countries.
• Interruption vs Irrelvant advertising Most advertising in network TV medium are viewed, more recently, as interruption. Since internet TV is a medium with a vast global reach, the advertising can get irrelevant too, for an internet TV viewer in Europe or India, if the content and ads are US based, for example. Hence, marketing departments of companies need to work closely with their country teams so that viewers are served relevant country specific ads. Else, it is advertising dollars down the drain.
• Single format vs Multi-format : Most advertising in network TV are single-format based – 30 sec TV commercials. But in the case of internet TV there is a lot of interactive and contextual multi-format advertising opportunities. For example, the internet TV viewer may be interested in just seeing, knowing more, buying, chatting, seeking references etc. about brands and they can tracked at different stages of such a behaviour. Hence, the traditional model of just time-based selling will have to move out and new monetization opportunities will have to adopted by internet TV folks. Advertisers have to work on multiple format campaigns that will have to be served to viewers in real time.

UIDs - User Initiated Discussions

I had recently posted about the impact of UGC(user generated content) in travel and the rising power of user-driven marketing. It seems this is an interesting trend that is gaining ground. Myspace, the social networking site, conducted a study called neverendingfriending and there are some interesting facts from this study. Forbes has carried an article on the same which mentions some of the highlights of the study which include:

• When a MySpace user talks, her friends listen.
• ..in addition to the 1.8 million MySpace users who said they plan to buy a new Electronic Arts game after seeing the company’s ad campaign on MySpace (at a cost of $1.19 per user), 4.5 million more — people who saw the brand’s profile or heard about the product from a friend, but didn’t see the ads — said they’d buy it, too.
• MySpace calls that kind of word-of-mouth spreading of an online ad campaign the “momentum effect,” and says its ability to calculate the chatty effect is the best thing to happen to social network marketing since, well, clicks.

Some key questions that came to mind were:

1. User Initiated Discussions(UIDs) in social networking sites drive brand awareness and conversions. How will one monetize this impact as this has an effect beyond CPT and CPC?
2. For advertisers' and social networking sites, it is more than just getting more dollars but may be is there a need for a new form of "giving back" to the community that needs to be adopted by brands?
3. Context-driven conversations(CDCs) have to become accountable and transparent. Is there a need for a new kind of tracking  that needs to evolve? It has to move beyond white papers and studies in my opinion for ad dollars to move here.

Travel consumers trust each other - CGC is a big trend

According to a research study released by Compete, when making travel decisions, consumers listen to one another. In total, consumer generated content (CGC) already influences $10 billion a year in online travel bookings.  Consumers are increasingly embracing their peers’ voices online: 20% rely on CGC when planning travel, and they consider this content more credible than reviews from professionals or information from the brands themselves.

To understand how marketers can create a strategy for getting involved in the conversation, Compete analyzed the effectiveness of three innovators in the travel category that have already embraced CGC:

• Sheraton Hotels pushed its standard website booking functionality aside, transforming into a social platform revolving around a “Global Neighborhood”
• Southwest Airlines launched a promotion to involve consumers in its marketing campaign through a contest for creating the best “Wanna Get Away” commercial
• TripAdvisor has become the single largest source of consumer-generated travel reviews online, with over 5 million consumers sharing in an ongoing dialogue

Three strategies recommended are:

What drives deep engagement in communities?

Just read a nice piece of research on what drives deep engagement, involvement when brands want to build communities. Looks like if you can't drive involvement, passion, alignment of minds and a channel for dialogue and sharing, communities won't take-off. I also felt as I read this research, as communities grow, we need to break them down into smaller communities of similar interests to sustain interest and engagement amongst members. Communities are not about "width of users" but  about "depth of usage".Read on for some extremely good insights:

People Engage More With Small, Branded, Well-Lit Communities!

According to Communispace, in this new era of "conversational marketing", the measure for engagement in a community isn't the number of people logging on. Rather, it's how actively people participate in the community.

New Communispace research, which analyzed participation behavior among 26,539 members of 66 private online communities, provides an initial look at member participation in communities.
The study evaluated communities along three participation metrics:

• Frequency - how often members contribute
• Volume - the number of contributions made by each member
• Bystander or "lurker" rate - what percentage of members are simply observing versus actively participating.

Key findings of the research are:

The more intimate the community, the more people participate:

• 86 percent of the people who log on to private, facilitated communities (average community size: 300-500 people) made contributions.
• Only 14 percent merely logged in and observed, or "lurked."
• In contrast, on public social networking websites, blogs, and message boards, this ratio is typically reversed, i.e., the vast majority of site visitors do not contribute. In fact, in a typical online forum (e.g., wiki, community, message board or blog), one percent of site visitors contribute and the other 99 percent lurk.

People get more involved when they know whom they are talking to and why

• Branded sites showed a higher volume of participation.
• When potential members were considering whether to participate in a community, they were 30 percent more likely to log on when the welcome notice disclosed the company sponsoring the community. Branded sites had an initial log in rate of 71 percent, compared with 55 percent for unbranded sites. This suggests that transparency - being upfront about who's behind the community - is a key factor for companies that want to engage with customers in a community.

Why people participate: social glue, shared passion, having a voice

• Communities of parents get the highest involvement
• Differences between how men and women participate: based on analysis of single-sex communities, the research found that although members of women's communities participated more frequently than men, men seemed to have more to say when they did participate: 4.8 weekly contributions for men compared to 4.1 for the women.
• Homogeneity triggers participation
• Education and household income were not related to community member participation
• Having a voice, productive leisure: One of the implications from the research is that people may get more involved in private, intimate communities because they feel like they can have a say.Another implication is that people may view the time spent as "productive leisure." They see participating as an interesting or fun outlet for communicating with other people who love what they love.

Integrating minds and solutions not just agencies or departments

At OMMA Hollywood, there were some interesting points made on the challenges facing agencies and how they need to rethink their solutions & models for consumers. Take a look:

Tim Hanlon, senior vice president-Ventures Group, at Publicis Groupe's Denuo said "Agencies should be de-siloing to make that TV expression both a branded and DR vehicle," whether it's a TiVo vehicle or a telescope unit, "a little TV with a DR component," adding: "Is that the direct marketing agency's responsibility or the brand agency's? I think it's both, so why do have two separate groups?" He further added "Consumers, especially younger ones, if they see something in any form of media, they're going to want to go further with it,"

Bant Breen, president, Interpublic Futures Marketing Group said ""It's a messy landscape today ... Digital media staff is working two and a half times longer and harder than the traditional media staff," he noted, citing thousands of media channels and different data feeds. "We need systems to coordinate that process. Truly personalized creative could be very, very exciting."

"The big part of what agencies do is to empower consumers to make a purchase decision, foster relationships, enable transactions and deliver information," added Sean Gold, senior vice president marketing, MySpace. "Traditionally, they've been great at delivering information, but the fostering relationships/enabling transactions needs to improve."

 

Will TV advertising become targeted?

Imagine mass media getting targeted. That's the ultimate dream of every one-to-one marketing professional. Google is testing targeted delivery of TV commercials. Google has maintained in the past that TV and Radio will remain high priority opportunity for them to sell measurable advertising solutions.  According to an article:

• Google has begun a test run serving up TV commercials to cable subscribers in Concord, people familiar with the matter say. Google's pilot project to bring its approach to cable boxes represents a foray into the $54 billion U.S. market for TV advertising -- much bigger game than its online turf.
• In the test, advertisers are buying commercial placements through an auction system, people familiar with the matter say. But it is at an early enough stage that the buys are being handled manually by Google salespeople, rather than through a full-fledged automated auction system like the one Google uses to sell ads online, one of the people says.
• Rather than every household seeing the same commercial, Google in theory might tap databases with information about the demographics of an individual's neighborhood and examine the content of the program being watched at a given moment to better select which ads to beam through the TV. So, for example, a household in an area with lots of children might be more likely to see commercials for minivans than for sports cars.
• Its traditional media-advertising efforts have also been bumpy to date. Google's executives admit to problems with the company's first tests of print-ad sales; they have given the system a major overhaul. Analysts say Google hasn't yet lined up enough radio-ad inventory to make its efforts there significant.

A few years from now, when you watch the TV commercials, your neighbours might not see what you see. Your telemarketing calls will get filtered a lot more precisely basis your geo-demographic data. Your SMS messages, mobile advertising and internet ads will be a lot more coordinated.

Welcome to the world of 'orchestrated engagement'. 

Radio Station extend the customer experience with Videos

Recently, I had a written a post about new media getting the attention of marketers. In fact, I had mentioned there that I hated the use of the word non-traditional media and called it convergent media.

Looks like radio stations are fast adopting convergent media strategies. NY Times has an interesting article on how radio stations are using their websites to have videos that literally 'extend' the listening experience.

I personally think this is an extremely sticky & brilliant idea for radio stations. It just moves seamlessly from offline 'listening' to online 'viewing and listening' very well. Take a look at the opportunities it provides when you view radio media with a convergent mindset:

• A simple camera in the broadcast booth( How about seeing your RJ?)
• Web-only musical performances

Radio Stations can become a visual medium if you have the right imagination!

Dripvertising - Is this the future?

I was reading an article in NY Times on how Microsoft  launched Windows Vista last week. There is an interesting point in the article that reinforced my long-held belief that we are going to see seismic shifts in marketing communications and how consumers will consume communication - "Messages in Drips" as I have termed it. It's no more the blockbuster approach of the past! It's happening as we speak and is gaining ground rapidly.

Here's the point Brian Marr of Microsoft makes in the article that reaffirms my belief:

“We wanted something very special for this audience; something very low key,” ....“This is an audience that is very cautious about marketing.”

Take a closer look at this:"low key", "cautious about marketing". That's the biggest challenge for brands today! Marketing to the ever cautious consumer!

How has Microsoft approached this problem? They launched a site called clearification.com. According to NY Times:

The campaign offers a series of “webisodes,” or stories told in short video clips. Microsoft also sponsored a performance tour for Mr. Martin and his Comedy Central special....

News of the clearification.com site was released in e-mail messages to influential blogs like laughingsquid.com and on video sites like YouTube.com. The site also lets visitors sign up for an alert to notify them when the latest webisode is released.

It's interesting how messages are being released in "drips". This creates a high level of engagement and involvement plus don't forget the buzz it creates.

I believe "drip messages" can capture the imagination of consumers. There is a lot intrigue and expectations in this kind of story-telling for brands. It's pretty media neutral and does many things a 30-sec spot can never do - dialogue, converse, respond, interact and build an experience. This is the way marketing communications is headed in the future.It's not devices like TiVo any more that pose a challenge for marketers. Brands need to break the "cautious wall" consumers have built around themselves.

The article ends with this quote"...The idea is to deliver something with depth and substance.”. Never mind the jargon -"Dripvertising" but surely this approach makes a lot of sense to me.

Conversations are never assembly line

Joseph Jaffe is one person who does a great job of building collaborative projects. After his successful book Life after the 30 Sec Spot, he has started to write a  new book - Join the conversation and has invited people to contribute. I have tried to contribute my thoughts in Chapter 10 - Why are you so afraid of conversation? Here's my take:

It is a good idea to trace this to the history and growth of organizations in the industrial age. This was the age where efficiency was the focus. Organizations were built around driving productivity. People were trained to do things over and over again - faster and quicker. For over a century, people worked in an era of mass production. Hence, they forgot the ability to develop conversations. They worked in large organizations that told them what to do rather than get them to explore what to do.

We therefore moved from

• an era of 'inventory of goods' to an era of 'inventory of ideas'.
• an era of 'scarcity' to an era of ' insatiable choices'
• an era of ' information poverty' to an era of 'information overload'

Imagine the kind of shift they would have to make for this new eco-system. They had to express, share and collaborate to get prepared for such an environment. This is a new work culture altogether for them. Also, one-size-fits-all product strategy became irrelevant.

Conversation at the end of the day is two-way. Conversations require

• A capability to accept reality as it were because that's how consumers talk amongst themselves
• Ability to listen and respond in an unbiased manner
• Skills to experiment,learn and develop
• Ability to change the course of one's action swiftly, even if the decision was wrong

Hence, they were not ready for a conversation era. An environment where one has to express, empathize, engage, enable and empower. The mindset a marketer must have is not to 'inform at any cost' but 'spread at no cost'. This is a new marketing paradigm that demands new thinking, new rules and new ideas.