Chrysler listens, Starbucks wants ideas.

There seems to be a concurrent trend. Two companies just announced new projects / plattforms on which they want to listen to consumers, engage them, discuss product development with them.

Starbucks launched the website „My Starbucks Idea“ on which they aks users to provide Starbucks with their ideas:

You know better than anyone else what you want from Starbucks. So tell us. What’s your Starbucks Idea? Revolutionary or simple—we want to hear it. Share your ideas, tell us what you think of other people’s ideas and join the discussion. We’re here, and we’re ready to make ideas happen. Let’s get started.

As you would expect, you can post ideas, vote on other’s ideas, discuss ideas, etc. In addition, there is a blog called „ideas in action“ that covers the project. At the moment, some sources are rather cynical about the project, because people mostly just ask about free drinks, fre Wi-Fi, etc. I am curious to see if there will be some really good ideas with added value resulting from this approach.

Chrysler, on the other hand, will launch a „customer advisory board“ of up to 5.000 consumers chosen of those who will apply through the website to take part. Once they can access the forum, they can submit ideas, get a sneak peak at videos, etc. It will be interesting to see if they can capture the right target audience, to quote autoblog:

However, we’re a little unsure if the tactic will provide Chrysler with what it needs to shape the future of its products and services, considering that the only people likely to sign up are partisan pistonheads who are already married to the Mopar camp or slighted customers looking for a place to vent.

For some companies, this change in dealing with the (online) target group has resulted in successes, as Ad Age writes about the Dell case study:

This sort of online listening post worked for Dell, whose IdeaStorm website resulted in a few concrete product developments and, in turn, helped to turn some of the computer-maker’s fiercest critics. One of them, Jeff Jarvis, went from a state of high dudgeon on his blog to praise the company in BusinessWeek.

In my opinion these approaches should probably work fine, as long as there is added value for both sides. If the consumer ideas and suggestions are crap, useless, unreal or simply silly, the companies might soon stop asking consumers in this fashion. It would then be much easier to go back to the old fashioned model of focus group research, where the noise to signal ratio is much better.

On the other hand, there should be some real improvements/products/ideas coming out of these approaches, making the whole outcome visible to the participating audience, showing them that their little contribution did infact change the way these companies go to market (even if the resulting outcomes were not your own idea, you would appreciate the effort made by the company).

Otherwise we’ll start having similar symptons as you have in German elections nowadays. You feel like your vote is too small to make a difference – and heck, no matter what people vote for, it doesn’t feel like things change much anyway. So why bother.

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Do social networks need advertising?

Mitch Joel pointed me to a business week article about advertising in social networks. In the same post he also links to a blogpost claiming social media sites need advertising.

In short: time spent on social networks is declining, for whatever reason – one could of course be increased advertising on these platforms. So this could be a problem for advertisers in the near future. Secondly: social networks need advertising, the same way media has always been ad supported.

But it’s not only the fact that user numbers are going down, ads on social networks are also less effective than on regular websites:

Many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they’re more interested in kibitzing with their friends. Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web.

The solution to this is new targeting mechanisms, to serve users more relevant messages.

Last fall, both rolled out programs allowing marketers to pitch products to people in hundreds of categories of interest, such as fashion and sports. News Corp. President Peter Chernin said on Feb. 4 that response rates on MySpace improved as much as 300%.

Could be a solution. But at the end of the day, this whole approach still tries to use old answers to new problems. How about taking an approach that looks beyond plain advertising? How about introducing branded widgets, services, or exclusive whatevers to these platforms, so that brands can provide an added value to the interaction between users?

I am thinking of such things as the Red Bull Rosham Bull Challenge in facebook, which is a game that two users can play against each other. Or even just plain and simple things like the fact that you can sponsor digital gifts in facebook. There still is lots of potential for these kind of approaches.

Oh, and from a business model perspective: I don’t think social networks need advertising support. At least not to the extent that their business models are in danger if there is no proper ad solution in place.

Think about the German platform Xing.com. There you have a choice of paying a monthly premium for additional services – one of which is the fact that you don’t get to see any ads.

There could also be other models, like changing the business model slightly and starting e-commerce around certain product groups (i.e. certain information-based, digital products or even real products).

These problems are not really new. But what this whole discussion shows, is simply the fact that social networks have, all of a sudden, exposed the need for new marketing approaches much clearer than any of the previous developments on the web.

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Reading „join the conversation“

As I twittered already: I received Joseph Jaffes new book „join the conversation“ today. Much faster than I thought it would take amazon to deliver it. I have already started reading it and sofar it’s good!

Joe utilized all the means of new marketing (conversational marketing!) to produce and promote the book: Bloggers were helping to design the cover, within a wiki everybody could help write chapter 10 (there seems to be a system – chapter 10 was also the „odd one out“ in his last book the chapter being downloadable as an audio file from his website).

There is also a blog for the book, jointheconversation.us. And in true conversational effort, everyone can be an author in this blog (let’s hope that doesn’t become too messy).

Last week Joe managed an amazing coup of „bumrushing“ the amazon charts by asking all his blog readers, podcast listeners and facebook friends to join the „bumrush the charts“ event on facebook.

This basically meant for everyone to buy the book on one single day, so that the collective effort would push the book up the charts at amazon.com. (This is also why I bought the book last Sunday – I was going to get it anyway, so why not take part in that exercise.)

The last result I could see: #2 in business books (behind Alan Greenspan) and #26 overall. Pretty impressive! It dropped down again to lower ranks in the meantime, as one would have expected with a fairly new title, but let’s see where it will get to over time.

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Advertising: Death by Web 2.0?

Andrew Keen is a well known critic of the whole Web 2.0 user generated („communistic“) cult of the amateur that is shaping our media consumption („prosumption“) these days.

Now, on Ad Week, he contributed an Op Ed about Web 2.0 being the death of advertising. It is quite a rant, you’ll be amazed:

Web 2.0 is, in truth, the very worst piece of news for the advertising industry since the birth of mass media. In the short term, the Web 2.0 hysteria marks the end of the golden age of advertising; in the long term, it might even mark the end of advertising itself.

At first I thought he must be joking. And then I looked up his name on Wikipedia – finding out that he must be serious about these things.

Don’t get me wrong – the new media production and consumption setup has changed (and will continue to change) and has had an effect on the advertising business. But instead of complaining about it, we should look at the possibilities and opportunities of the new landscape.

Many of the new technology enabled trends are somewhat user friendly, if not at least user-centric. So why should we not adopt and keep them? Really, there is no time for complaining. It’s a no brainer, that (mostly) bad advertising was first to adopt the new setup. Now we should try to figure out how to continuously create good advertising given the new circumstances.

Let’s not sit there like the music industry (as Andrew Keen writes):

Evidence of the crisis of mass media is depressingly ubiquitous. The recorded music business is in free-fall, the tragic victim of mass digital kleptomania.

There are alternative ways to sell music, Steve Jobs proved it with iTunes. A much more user centric model. Might not yield as high a margin as selling CDs in heavy jewel cases transported across the globe, but that’s the way it goes. Horse carriages were out of fashion at some point, too. Musicians like Madonna and Radiohead seem to get it.

The next couple of quotes are amazing:

What Web 2.0 is doing, compounded by the online consumer’s shrinking attention span and his or her hostility towards the „inauthenticity“ of commercial messages, is radically deflating the value of advertising. […]

As the scarcity of mainstream media is replaced by the abundance of Web 2.0’s user-generated content, advertising itself is being painfully commoditized. […]

No new technology—neither the false dawn of mobile, nor the holy grail of personalized, targeted advertising—is going to save the advertising business now. No, the truth is that advertising can only be saved if we can re-create media scarcity. That means less user-generated content and more professionally created information and entertainment, less technology and more creativity. The advertising community desperately needs more gatekeepers, more professional creative authorities, more so-called media „elites“ who will curate, filter and organize content. That’s the way to re-establish the value of the message. It’s the one commercial antidote to Web 2.0’s radically destructive cultural democracy.

It almost sounds like advertising is a form of art worth protecting for its own good.

Instead, the value of the message should come from relevance, in terms of content, targeting and timing – and of course the creative idea! (This, by the way, has always been the case. But not all advertising in the past has had good content, targeting or timing. Nevermind a creative idea.) A valuable message should still resonate, even when surrounded by a cacophony of user generated clutter.

Only now it is not so easy to spread bad advertising any longer, because the audience has more choices and more control.

What do you think people have thought about bad advertising in the last 50 years? Yes, they fast forwarded, or got a new drink from the fridge, or switched the channel. Or cursed at the TV. Or flicked over to the next page. Bad advertising always existed, and yes, it has always been a pain.

Good advertising, however, has (almost) always found the attention of the audience. And it still does. It has even become a lot easier for the audience to seek and find the content of those campaigns that they’re really interested in. At any time of the day. And it has become much easier to share good advertising, forwarding the content, (clips, emails, site URLs) to their friends.

While Web 2.0 has made it much more difficult for traditional advertising mechanism to work or break through the increasing clutter, there is also a lot of opportunity, new ways for attracting and involving users. Sometimes even beyond what traditional advertising mechanisms are capable of delivering.

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Marketing to Moms: Discovering a new target group online

In times of overmarketed standard target audiences, everyone is trying to find new potential in niche audiences. The new trend is not about a niche per se, because moms are a large segment in general. But not on the net. Online, this segment is not yet properly covered and targeted, even though some studies seem to point out the obvious.

In Germany, there are several sites competing for this apparently very lucrative target audience. Two that I know of are netmoms.de and mamiweb.de. Looks like there is a real run on covering this segment all of a sudden.

Caff now pointed me to several posts/stories about marketing to moms on the web:

The impact of her purchases or what she touts can spread on the Internet far beyond her e-mail list or blog. If your product or service passes the Alpha Mom test, it’s gold. That’s why the nation’s biggest marketers, from Procter & Gamble to General Motors to Nintendo, are focusing on this remix of the modern mom.

The combined study found that 69 percent of online moms subscribe to 1 to 5 retail emails. The study also reported that 86 percent subscribe for discounts and coupons. Also, online moms are more likely to click through emails that include product pricing (62 percent) and photos (61 percent).

When marketing to moms, you need to take advantage of the networks they build. Moms love to talk about what they’re buying, so if you have a good product or message, the word will spread. Virtually all new moms join some sort of play group or support group, so it’s wise to get your message across to these members.

If moms are your target market, you can forget about trying to buy their loyalty with cutesy graphics or long-winded offers. Today’s email-savvy moms respond to price discounts and free shipping in email messages from a handful of trusted senders.

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Social media sites and the impact on email marketing

At DMNews, there is a column about the impact of social media on email marketing, which is quite interesting:

Today’s younger generation is the single best predictor of future behaviors. And right now they are leveraging multiple social Web sites: MySpace and Facebook to chat with friends, Evite to send party invitations and LinkedIn to stay front and center for new business relationships. E-mail for these users has become a tool used strictly for the purpose of collecting business information — special offers, promotions and business information.

As we increase our usage of social networks, our use of e-mail will inevitably decline, reducing the success of e-mail marketing campaigns. Marketers need to take the time to understand what sites their users are comfortable in and then evaluate marketing opportunities in those spaces.

I don’t think it’s only that. (But it will be a large factor.) The other email killer is things like skype and other chat tools, mobile phone messaging, and RSS.

For any communication with your contacts, ther is a better way than email. Or at least there will be. With spam still filling most people’s inbox, they will undoubtedly move to other, uninterrupted channels and only open their email accounts to separate the „bacn“ from the spam.

So email marketing is not dead, as people will continue to use it. But in the next 5 years or so, we’ll probably see a shift in usage patterns, decreasing the target audiences attention to email. It is now, that we need to test the alternatives, so that we have working tactics in the future.

Try out producing widgets for facebook, offering RSS feeds (this should already be a no brainer!), sponsor chats and communities (or offer them yourself), and may be start advertising on the long tail of the web…

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Why it could make sense for Amazon to send users away with ads

Read/writeweb has an interesting observation. Apparently Amazon has started to place ads on their site that lead to products in shops on completely different sites. Some ads are contextual, others are not. And Alex asks, why on earth Amazon would do something like that, i.e. sending people out of their shop to go somewhere else?

Here are a few thoughts why it might make sense:

  1. People might remember that they found what they were looking for when visiting the amazon site. Sort of like Google whose tools are all more or less designed to send people away. AFTER they found what they were looking for.
  2. Amazon should know the parts of the site where they are loosing the most users anyway, simply because of natural drop out rates that always occur on sites. This way, they can at least earn some money with people who would never have purchased anything in the first place, too. Question is: would they also integrate the banners on pages with well-selling products?
  3. Learning about the click behaviour for products that amazon doesn’t list, is really clever (and paid for) market research into the gaps of their product offering.
  4. Who says, that margins of products sold are always better than advertising revenue. Most of the web 2.0 sites base their business model on advertising revenue rather than actual products. Amazon can probably offer a good, if not the best, targeting based on their recommendation engine. Does anyone know what they charge per click or per CPM? I bet it’s dearer than most sites you can put your ads on. (And it should well be worth the money!)

These are just four thoughts that immediately came into my mind, why it could possibly make sense for amazon to start placing ads on their site. Any other ideas, anyone?

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