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Archive for September, 2007

Getting 21st century marketing: How Sweden’s stardoll.com taps the virtual world

September 28th, 2007 No comments

Step one: Set up a free, easily accessible virtual world (VW) where girls can play with virtual dolls.

Step two: Purchase a truck-full of rakes and a heavy duty forklift for the cash that’s going to pile up, sit back in your late 18th century Gustavian sofa and sip a sockerdricka.

Done kludgy, VWs can give users a headache. Who wants to spend a half-hour or more slogging through a mandatory tutorial on how to fly your avatar before you get to explore around? Done right, like Stockholm-based stardoll.com, VWs are a prime opportunity for building virtual and material relationships with potential and existing customers.

Here’s how it works.

Registration is free, simple, stressless as a Swedish massage, and instantly gratifying. Everything Millennial kids and their GenX parents want. It takes only seconds. Talk about a lead generation machine. The final click says “Let’s play!” You just can’t get more inviting than that.

Once in the door, girls can “manufacture” a doll from scratch, picking eye-color and shape, hair-style, skin-tone, etc. from various lists and dress her (or him) in some generic outfits. You can name your doll and enter it in fashion shows, create and join clubs, IM other members (this is where stardoll.com must stay extremely vigilant) or take your doll window shopping in a virtual mall. If you’re 5 or 6, that might hold you for awhile.

Here’s where mommy’s credit card comes out.

If you want a doll from an extensive list of pop stars and celebrities, you’ll need some virtual money. That is, unless the doll you want to play with represents someone a little longer in the popularity tooth, like Cher (no offense meant, Cher). Virtual money is purchased with real money at an attractive exchange rate.

Even if a girl prefers her custom creation, with virtual money she can shop in the virtual stores just like big girls for the latest, virtual branded products for her doll. Think about how much a virtual superstar doll absolutely needs the latest fashion bag and matching designer shoes for a virtual celebrity outing in front of the virtual paparazzi, and you get the idea. So do shops like DKNY and Sephora.

Here’s the next stroke of brilliance.

If mommy’s credit card is not forthcoming, you can still visit sponsored play areas with your doll or gain access to some celebrity dolls (I picked 50 Cent), but outfits, accessories, even furniture comes from the sponsor’s virtual catalog.

Talk about a premium opportunity to build brand recognition: Here’s where you imprint your logo on the brains of millions of girls who eventually get their own credit cards, their own homes to furnish, their own vehicles. Oh, and influence the purchasing decision of millions of boyfriends and husbands. That opportunity should have just about every retailer zooming to get their virtual product into the virtual hands of virtual Amanda Bynes and Brad Pitt.

Stardoll.com was ranked by comScore as the top Internet destination in June for girls aged 9-17. The company, launched just over a year ago, has hit the 10 million registered users’ mark.

Teen and “tween” girls in the U.S. and Europe are projected to have $21 billion in disposable income by 2008.

eMarketer said this week that by 2011, 53% of U.S. kids will have visited a virtual world. Is your business there yet?

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New York Times joins CNN in dumping paid online subscription model: Who’s next?

September 26th, 2007 No comments

In the Internet world of a billion information fire hoses, where you can drink as much as you want anytime you want or drown trying, media giants NY Times and CNN have both dumped the idea of charging online subscription fees to view their “premium” content. In the case of the NYT, that was largely composed of their Op-Ed columns. Last week readers saw an American Express billboard for about 5 seconds, noting their sponsorship of the free content. This week? The billboard’s gone and ads are scattered on the page.

According to Reuters, NYT Web VP and GM Vivian Schiller said “We now believe by opening up all our content and unleashing what will be millions and millions of new documents, combined with phenomenal growth, that that will create a revenue stream that will more than exceed the subscription revenue.”

What can other businesses currently depending on the subscription model for survival learn from those decisions?

First, do the math.

Chances are the paid online subscription model doesn’t pay as well as delivering more eyeballs to advertisers by giving your content away.

The fourth estate learned almost 200 years ago that hooking up advertisers and potential customers essentially paid for their entire intellectual and business overhead. Subscriptions were gravy. The only other advantage I can think of for selling papers was to ensure they got into the hands of folks who cared, could read, and had money to buy things instead of into the hands of people who would use them for bedding.

While I grant that some paid subscription models in the modern world still work—lifestyle pipes like Internet, satellite, and cable TV; lifeline pipes such as phone, water, and electricity—asking users to pay for online content is a gamble, if not an outright turn-off.

Let’s look at CNN, my old stomping ground. Why should I pay to watch CNN’s video online when a) I can get it free from YouTube, Google, or a thousand other local and international outlets that already pay CNN to use their feeds; b) get the same material free, or something much like it, from CNN’s online competitors; c) go to CNN’s source, which in this age of slashed and burned technical budgets is more likely to be APTN or Reuters or a myriad of other providers who now have their own outlets for my viewing pleasure; or D) just turn on the dang TV (I don’t have TV on my PC right now)? It’s not like CNN holds back when they have something interesting to show the world, and neither do any of these other sources of video. So what advantage would a subscription to CNN’s “pipeline” gain me? Nothing worth paying for, as it took CNN several years to figure out.

Second, do it again.

When I recently ran my ideas about the death of paid subscriptions past my boss, Dr. Flint McGlaughlin, he countered it by using the example of an online market still willing to pay for access to the minds of the Wall Street Journal’s editorial staff (though last week the WSJ said Rupert Murdoch is considering giving their 11-year old online version away once he takes over).

Dr. McGlaughlin is right: The business model of a premium audience paying a premium for premium information delivered via a premium channel, for either convenience or before “others” get it, can still work. Look at businesses willing to pay for sage advice and respected opinions from the multi-billion dollar consulting industry. So I agree: Businesses and thought leaders will continue to shell out for subscriptions to premium sources of aggregated and filtered research and analysis as long as the source is perceived to convey a distinct competitive or intellectual advantage that free content does not or cannot provide.

Third, ensure you have accurate numbers.

For everyone else it’s purely and simply (hah) a matter of accurately counting eyeballs delivered to your free content and your hosted ads, in all the myriad contexts and permutations of media (online, mobile, viral, social, print, broadcast, etc.) now available, and who the eyeballs belong to. That’s where I’m placing my bet, not on paid subscriptions.

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Mobile search means businesses better get mo’ or get left

September 20th, 2007 1 comment

Google said this week they are expanding their AdWords service, offering businesses the chance to place ads next to cell phone search results.

They are also rolling out a new Adsense for Mobile service, where contextual ads will appear on web sites specifically optimized for viewing on cell phones. Mobile users clicking on ads are sent to the mobile-version of an advertiser’s webpage or offered the option of connecting to a business phone.

According to a Monday press release, “AdSense for Mobile is intended for AdSense partners who have created websites specifically for mobile browsers, and who want to monetize their mobile content via contextual advertising. Like Google’s other AdSense products, mobile text ads run on an auction model. The system automatically reviews the content of publishers’ mobile websites and delivers text ads that are relevant to the websites’ audience and content.”

Google will use auctions to set prices and advertisers will pay when a user clicks, just like the online version. Google says conversion tracking is available for their mobile offerings.

AdSense for Mobile will cover at least 12 countries besides the U.S., including England, France, Italy, Germany, Spain, Ireland, the Netherlands, Russia, Australia, India, China and Japan.

Google joins Yahoo, AOL and Microsoft in jockeying for the best position in the emerging mobile search marketplace. All four have recently snapped up intellectual talent and treasure. AOL bought Third Screen Media and Microsoft sucked up Frances’ ScreenTonic just three months ago. On Monday Nokia said it would buy Boston’s Enpocket.

As of this week, Sprint customers can take advantage of both MS mobile and LoMo search technology. Sprint’s Mobile Shopper allows users to search and compare prices on 7 million products from online stores like eBags, Bluefly, and Shoes.com with in-store prices. The tool is from a Boulder, Co. company called mShopper. Sprint also offers GPShopper’s “Slifter Mobile” local mobile search tool for finding an item a user wants as close to the user as possible.

According to Strategy Analytics, $14.4 billion will be spent on mobile advertising by 2011, an estimated one-fifth of all Internet ads.

Savvy businesses will optimize mobile versions of their Web sites, if they haven’t done so already.

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A Different Kind of Online Search: Help Look for Steve Fossett

September 14th, 2007 1 comment

Today the blog’s about online search. Searching for aviator Steve Fossett that is.

If you’ve been incommunicado for some reason for the past two weeks, aviation pioneer and record holder Steve Fossett disappeared in the Nevada desert 11 days ago. He took off from a private landing strip in a small prop plane to look for a dry lake bed to use in an attempt to break the land speed record, and never came back.

There are now hundreds of people in aircraft and on the ground searching for him; but thanks to Sir Richard Branson, Amazon.com, and a satellite imagery company called GeoEye, there are also now thousands, maybe tens of thousands of people looking for him from the comfort of their computers, too.

Using satellite imagery from GeoEye and some very cool “artificial artificial” software hosted by Amazon.com, we can all search for Steve using Amazon’s Mechanical Turk.

Once registered, you are fed a steady stream of satellite images of the Nevada wilderness, as fast as you want them, chopped up in easy to manage 278-foot by 278-foot chunks delivered as a 2.5 inch square photo on your desktop.

You’re also given a template positioned beside the image to search that shows the relative size of Steve’s airplane, so you know what to look for. Of course I’m also looking for skid marks, burned areas and HELP spelled out in rocks or sagebrush.

It’s a strangely compelling and satisfying exercise to retrieve a “hit” from Mechanical Turk, scan it for a plane, wreckage, a distress signal, a sign. If you see something noteworthy (and I haven’t), you click yes and write a note about it. If not, you click no and retrieve your next hit.

Multiply that exercise by thousands —potentially millions—round the world, and it’s certainly a contender for the world record for largest search party ever assembled.

According to its site, www.mturk.com, Mechanical Turk provides “a web services API for computers to integrate “artificial artificial intelligence” directly into their processing by making requests of humans. Developers use the Amazon Mechanical Turk web service to submit tasks to the Amazon Mechanical Turk web site, approve completed tasks, and incorporate the answers into their software applications. To the application, the transaction looks very much like any remote procedure call: the application sends the request, and the service returns the results. Behind the scenes, a network of humans fuels this artificial artificial intelligence by coming to the web site, searching for and completing tasks, and receiving payment for their work .”

Of course searching for Steve is volunteer work, but when you take a break browse around the paying areas of the site. Most engagements seem to pay five cents a hit or so for your work, so no huge money-making opportunities here yet, but think about it: This could be the way that many companies decide to work in the future. Outsource a huge task to Turk, and thousands of strangers can pitch in, or just leverage everyone in your company for a few minutes. As the old saying goes, many hands make quick work. Presto! Done! Just pick up your virtual shovel and start digging.

So here’s my pitch: Sign up and help look for Steve when you have a chance. Be part of the world’s largest search party.

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Super Chief Marketing Officers: Ensuring Survival of the Fittest in the Online World

September 10th, 2007 No comments

A book called CMO Thought Leaders: The Rise of the Strategic Marketer, published recently by global conglomerate Booz Allen Hamilton, uses interviews with CMOs and other marketing experts to scope the sea-changes successful marketers will survive and thrive in: Global penetration of an Internet-centric culture and its dramatic demographic shifts—where 1.2 billion consumers simultaneously occupy the online ocean and a myriad of invaluable, ultra-focused niches; where warp-speed concept-to-market delivery of new products and information intersects with end-users possessing unlimited ability to pick and choose what they want, when they want it, and who they want it from; where a brave new world of marketing scientists and analysts focus their experiments on one thing: discovering what really works when it comes to navigating a company through those wired and wireless cyber-seas.

It’s time for those who claim the title of CMO to “lead, follow, or get out of the way,” as my former boss Ted Turner was fond of saying. If you’re going to lead, you’d better be a marketing Übermensch—capable of drilling straight through an amorphous marketplace to the data that can feed an immediate decision on the most profitable model, the best optimization tweak, the sharpest hook, the killer copy you need to make the right changes, the right move, the right decision, right now, and as close to the end user/customer as possible—because tomorrow it will be too late: You’ll be eating the dust of a million other companies, including a half-million that didn’t even exist yesterday.

Oh yeah, you’d better put being best friends with the Chief Information Officer on your to-do list as well.

According to a fascinating article by Randall Rothenberg and Association of National Advertisers President and CEO Robert Liodice published by the Interactive Advertising Bureau, the study looked at “the rise of marketing as a core function in the operations of consumer and business-to-business companies. . . . Whatever the industry, companies today have little choice but to embrace the Growth Champion marketing model — to become, as Rob Malcolm, president of global marketing, sales, and innovation at the $18 billion liquor giant Diageo PLC puts it, ’the engine room of demand creation.’”.”

“Growth Champions” was a term coined for the leaders of marketing teams by Harvard Business School gurus John A. Quelch and Gail J. McGovern, who labeled these visionaries “Super-CMOs.” (See also “Growth Champions” by Edward Landry, Andrew Tipping, and Jay Kumar).

Here are other key insights from the book that Rothenberg and Liodice mention in their article:

• “The consumer is not an idiot; she is your boss. Consumers have near-total control of communications channels, choices, and content is now the principal underpinning of companies’ marketing strategy.

• The “purchase funnel” has Web feet. Interactive media are perceived as central to marketers’ new growth mission, capable of supporting brand awareness, retail traffic generation, product trial, loyalty programs, and other needs.

• Marketing experimentation is accelerating, along with the need for new metrics, as communications cost barriers continue to plunge.

• Marketers’ arsenal is expanding. The definition of “advertising” is changing to include multi-platform campaigns, marketer in-sourced infotainment, user-generated content, complex CRM programs, and other activities rarely associated with traditional advertising.

• There is a race for new capabilities among media, agencies, and marketers as the marketing-media value chain grows more tangled and competitive.”

Adrenaline rushing? Invigorated? Ready for the challenge?

If your visionary board, your CEO, or your company president has seen the benefit of empowering a super-CMO to make change as quickly as possible and as close to the consumer you can get in order to drive company growth, congratulations; but as Ted Turner also said, “Here’s the rope; go hang yourself.”

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Hot on the consumer’s trail: Behavioral marketing provides sizzling results

September 7th, 2007 1 comment

It’s a good time to be in the ultra-personal, targeted ad business: Sexy, sultry behavioral marketing has AOL, Time-Warner, Yahoo, Google, and Microsoft all digging deep in Nomex-lined pockets to ensure they have a zaftig-share of behavioral technology and talent tucked away safely in-house.

Yahoo announced this week they are buying sixth-largest U.S. ad network BlueLithium. Yahoo CEO Jerry Yang said in a press release Tuesday that BlueLithium’s talent and technology is going to be “an integral part of our drive to build the industry’s leading advertising and publishing network.”

According to comScore’s Media Metrix Ad Focus Rankings for July 2007, Yahoo is already the #3 ad network, while AOL owns #1 eye-ball delivery channel Advertising.com as well as Tacoda (as of yesterday). Within the past few months Publicis bought Digitas, Google has offered $3 billion for DoubleClick, and Microsoft spent $6 billion on aQuantive. Is it time to buy some #2 ValueClick stock? Better have a big appetite for the risk generated by a new round of shareholder suits and an ongoing FTC investigation.

So what do these firms and their clients know about marketing that you don’t, or should?

Behavioral marketing works very well, at least until people become immune to it, there’s a backlash against how creepy it can be, something new and better comes along, or all three.

For those who haven’t been paying attention to the relationship between all those ads competing for your attention and where you’ve been surfing lately, behavioral marketing zeroes in on where you’ve been, and what you want, including what you may not have told anyone else about your needs and relationships; that is, no one but the Internet. If you’ve named it on a search bar or found it online, they can track you down wherever you go, continuing to show you what these companies noticed you’re interested in.

A 2004 study by Advertising.com, #1 in terms of unique user visits on comScore’s latest list, showed what Robyn Greenspan of the ClickZ Network called “a definitive link between behaviorally targeted online ads and click-through (CTR) and conversion rates.”

According to Greenspan, Advertising.com “identified users that did not complete advertisers’ registration forms or make purchases. These behavioral observations allowed Advertising.com to serve customized ads to these users as they visited other sites across the network.”

You certainly can’t argue with conversion rates improvements like 2,232 and 3,130 percent. How does a 94 or 225 percent lift in click-through rates sound, or a dramatic reduction in cost per thousand (CPM) impressions?

According to AOL CEO and Chairman Randy Falco’s press release regarding the successful acquisition of Tacoda, “Behavioral targeting is a fast-growing part of the advertising business, as marketers increasingly look to get efficient and measurable results from their advertising dollars.”

Results that mean companies who spent only a few million on behavioral marketing last year will spend almost $4 billion annually on it by 2011, according to eMarketer.

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