Mobile advertising, overhyped?

I get the hype: more people using smartphones and connected devices, huge potential of creating targeted campaigns leveraging user preferences and location. Years of experimenting, some growth, but a very small share of advertising. Will it ever gain traction?

All sorts of players have tried to compete along the mobile advertising value chain. Many innovations happened, lots of interesting stuff out there, but I feel its to intrusive to work.

Traditionally, Telecom players sought to monetize this channel through simple communication (text messaging, multimedia messaging, etc). The idea was to control a larger chunk of the value chain and use advertising as an alternate source of revenues to combat falling voice revenues. Measured against that goal, i would say operators have failed miserably. As it stands today, revenues are low and operators have lost the head-start as the focus shifts more towards mobile apps/ mobile web. One interesting business model out of all this is Blyk, an operator that provides its customers with free minutes and messages in exchange for opting in to mobile advertising.

The latest bets i would say are the mobile web and mobile applications. Google acquired admob in 2009 (for $750 million) which, complemented by its Android platform, is able to bring lots of value to marketers. Apple followed by acquiring Quattro wireless last year to launch its iAds network, again lots of synergies and potential there.

I'm sure both companies will revolutionize the mobile-ad space in terms of providing richer forms of media for marketers. However, will there be enough scale given how people use their mobile devices. I might be mistaken here, but i feel mobile devices are geared more towards efficiency and getting things done rather than fiddling with some advertisements.

When you browse the web, shoot an email or download an app on your mobile phone, you are often in a hurry to get something done. In my opinion, it is time-limit that will eventually cap mobile advertising, beyond which penetration will just flatten.

This is strictly my reading of the situation. Are the mobile ad players betting on the mobile becoming a 1st/ 2nd screen type of device where you would spend more time there? Are the target segments a diff category of users that are willing to opt-in to ads?

The Filter Bubble

I recently came across this video of a TED talk by Eric Pariser, that I think is thought-provoking and decidedly a propos to the topics of search marketing and SEO we'l be discussing in the upcoming class:

I was especially triggered by his metaphor (and slides!) on the "human" and now "algorithmic" gatekeepers that have replaced them. In all, his argument is for, in a way, more ethical algorithms, that don't allow themselves to be the feeder of our own conformation biases.

For marketing, the filter bubble is a double-edged sword: on the one hand, the clearer a person's filter bubble,the easier it is for marketers to target this person based on exactly the type of information he or she is most exposed to. On the other hand, penetrating the filter bubble with something genuinely new, that may actually be of considerable interest to this person is harder, as it might simply not penetrate the tough walls of the bubble.
For me, marketing and especially digital marketing is always strongly intertwined with ethics, and Mr. Pariser's argument persents a new layer of ethical considerations I, at least, had not previously considered. Where is the line between "editorial" search and unbiased search? To what extent can marketers use the filter bubble mechanism to create ever more tailored and intrusive (?) advertising?

I don't have answers, but there is definitely enough to think about!

Online retail is growing at a healthy double digit pace, but many questions seem to remain unanswered. After the class, I’d like to share with you some of my concerns:

• How big can continue growing multichannel retail? We have seen in first session techniques to create traffic on websites, and we discovered how expensive this could be. These investments have impact on online sales but also on offline sales. How efficient are the current metrics to measure the latter? How should we adapt digital marketing to foster sales in general and not only online sales?

• Will market place growth, especially Amazon, continue at the same incredible pace? Today it is not rare that 10 to 20% of brands website traffic is generated by market places. Market places are taking a percentage of each transaction. In the long run, shall brand try to avoid them and keep their margins, or will market places become even more unavoidable?

• It seems that there is an increased level of skepticism around the role of social networks in driving sales. This skepticism seems as strong as was the excitement a while ago. However social networks are inexpensive tools, and seem a good way to both gather information about customers and better target them. How should retailers and brands use efficiently facebook and twitter? Can brands expect to drive commerce from social network soon?

The Social Research and Analytics Opportunity

I was intrigued by the first class on digital marketing, in particular, the impressive stats on the expected growth in just about every channel of digital marketing – search, display, email, mobile marketing. While each of these channels presents significant baseline growth opportunities, on a more macro level, my mind was focused on the tremendous opportunity this presents for meaningful research and analytics in each of these areas.

With several hundred online methods for customers to voice their opinions on brands on the Web – how can companies get savvy about filtering out the crap and understanding the real data on their brands effectiveness? How can they mine and leverage the vast pools of data from social networks to gain competitive advantage? An example of a company that rode the early wave on analytics and has since been phenomenally successful is Techlightenment. Based in London the company started out creating facebook ad campaigns and has since expanded to using analytics for data insights and market research. Some of their tools include powerful front end surveys in facebook, rich media polls and social research dashboards.

As we progress through the course, it will be interesting to learn whether the sophistication of research and analytics can provide real competitive advantage across the various digital marketing channels. Watch this space.

"Marketing is for companies who have sucky products"

I attended the "Startup Pitch" event hosted by the New York Tech meetup group last week. A handful of start up companies pitched to a panel of venture capitalists to get feedback on their presentations and business models. One of the companies has been around for over a year and is seeking to bring online romance to the real world. The company's model was very strong and was written up by many tech bloggers and newspapers but only managed to sign up 4,000 registered users. They were seeking to raise funds, utilizing the majority of the capital on marketing and advertising costs. At the end of the pitch, one of the panelists referred to the controversial article that Fred Wilson wrote in February. The panelist stated that there may be a flaw with their product if they cannot gain traction after being exposed by the different media outlets.

Yes, I do agree that startups shouldn't spend most of their start up capital on marketing however, startups should consider bringing a marketing person on board at an early stage. This helps determine if you have a viable product before wasting time developing a product that may not have a marketplace for it. By testing the market first, entrepreneurs will have good feedback on the product's viability and suggestions for improvement.

The Wrong Marketing Strategy

I thought about this article that I had just read during our first class. Apparently the owner of DecorMyEyes, an online retailer of knockoff eye wear was threatening/harassing customers who complained about his site so that it would raise his search profile on Google. According the the Times he "used several aliases and he threatened to kill or sexually assault customers, going so far in one instance that he e-mailed an image of the customer’s home, which had been obtained from Google maps." He will be sentenced on September 16th and could be getting up to 6 years in prison. Also, Google is attempting to change their algorithm so you can't use negative feedback to positive effect.

Here is the full article:

http://www.nytimes.com/2011/05/13/business/13borker.html?_r=1&scp=2&sq=threatening%20messages&st=cse

Facebook: Does it pay?

    I recently recieved a text that simply stated: Do you want to make a lot of money? It piqued my attention and I opened the message to read the secret pearl of wisdom. The answer was a three step process: 1) Log on to Facebook. 2) Click on the deactivate button in settings. 3) Get to work. I chuckled at the simplicity and the truth in the message. Today, as Professor Kagan mentioned in class. many of us spend most of our time on Facebook. We are constantly updating our status and checking the pages of our friends. The size of Facebook's audience is simply huge with Facebook heading to their 700 millionth user level. Yet, for many businesses, advertising on facebook has not been profitable.
    I myself have had the same experience when I attempted to promote on Facebook. I even spoke to Professor Netzer to understand why Facebook with its huge audience reach is not delivering the returns that businesses expect. Almost all major companies are on Facebook. The pull of social media is extremely seductive and everyone seems to jump on the bandwagon with trying to understand their audience. According to Professor Netzer, the reason why facebook fails for many advertisers is the fact that when people are on facebook, they are there to socialize and to have fun. Making a purchase is considered a hindrance and ads are therefore seen as a nuisance. Second, many of the products that are advertised consists of items that are not fun or impulsive purchases. Recently, I came across an ad for a toolkit. It targeted the wrong audience at the wrong time.
     Therefore, while there is huge potential in Facebook as a marketing tool, currently the return on advertising dollars have been disappointing for many businesses.

Social Networks: A Place to Meet Up and Report On Your Friends

During class, we discussed a few examples of social networks other than the standouts Facebook and Twitter.

I came across a couple of interesting sites over the weekend which I'd like to highlight for the class:

Meetup.com- You may already be familiar with the site, but basically it lets you join groups that are already meeting; allows you to start new meetings; provides resources to find likeminded people who will want to do things with you; and creates opportunities for these groups to get sponsors. This site was extremely useful for me in looking for social media classes for work. It doesn't seem to have any advertising yet, but clearly there are great opportunities for targeting along with sponsorship for PR purposes. For example, a knitting store can post ads to knitting clubs or provide yarn for the club to create awareness of itself.

MePorter.com- I am brand new to this site, on which people can sign up to post their own hyper local news. They can then share news with their friends and invite others to comment, add to the story, sign in as eyewitnesses and post pictures. The site already features ads and has the potential for lots of hyper local targeting.

On all these social networking sites, including Meetup.com, Facebook, Twitter and all the dating sites, it's interesting to note that their success ultimately depends on how many people the site can attract, as well as whether others want to associate with the people on there. Ads and networks are both only as useful as the eyeballs connected to them.

Creating a "Viral" Marketing Campaign

I started this post as a comment to my classmate's post on how well adults recognize marketing, but decided that based on the different specific focus, this deserved to be its own blog post. The other blog post made the point that many people fail to realize that videos are part of a marketing campaign, particularly when these videos are funny in their own right. I not only agree with this point, but take it further by suggesting that the key to a marketing campaign's success is the ability to get consumers to enjoy playing and distributing the company's advertisements because the consumer wants to for his own reasons (i.e. it's funny or useful or interesting enough to watch and pass on to friends).

This raises an interesting question: can a company "create" a viral marketing campaign, and if so, how does one go about this? While I'm sure Professor Kagan is full of thoughts on this, I wanted to open it up to the class for comments.

My own view is that even though one can create a viral marketing campaign, this needs to be done in ways that dramatically diverge from traditional marketing techniques. For example, in the case of funny viral videos, it may make more sense to hire comedic film producers (like the guys from College Humor) to run a funny campaign with or based on your company's product, rather than to rely on people within your company to suddenly "become funny." Similarly, for viral videos based on usefulness, it probably makes sense for a company (especially a startup on a smaller budget) to scour YouTube for relevant experts in the field, and contract with these people directly to promote your product in the same kinds of videos they have produced with millions of hits.

The Internet and sites like YouTube have allowed anybody to become a film-maker on a very small budget, which allows all companies (big and small) to experiment cheaply in trying to create the kind of "viral" campaign that will stick. If even one of these videos actually does "go viral" and become the kind of advertisement that nobody even thinks of as an advertisement you have succeeded. The question is how to make this happen in the first place.

Standardized Advertising

One particular point stood out to me in last week's digital marketing class, and that was that display media is making a comeback. In 2008, I left Razorfish to go work for a small boutique web design agency, and at that time, paid search was "king". As an SEM manager, life was easy in the sense that budget was rarely an issue - it was hard to argue against devoting more $$ to paid search as it proved time and time again to the be the most efficient use of the advertising dollar. Sure, sometimes there was tension between display and search execs in this regard, but we just weren't at the point yet where we could leverage true synergies between the two forms of advertising. Clearly, since that time, things have changed as Professor Kagan explained during last week's class that display media has found ways to be highly efficient (primarily through more and more sophisticated targeting). What I find curious, however, is the willingness of companies to be "boxed in" to standardized IAB ad formats. I know I'm probably wrong, but I really don't believe I've ever clicked on a display ad unit. I don't even notice them. That is the downside of being a "pusher", and not a "puller". It is somewhat mind boggling to me that a group of marketers decided on some grid formats for the internet a while back and we're all subjected to these standard units now that are almost impossible to change due to the headaches created by attempted deviation. I worked on a project with Barry Diller and Tina Brown called theDailyBeast.com, a curated news aggregation site, and we tried to break the mold by refusing to partake in the standard ad unit model and instead created a production heavy, micro-site flavored ad serving structure where "engagement" was the primary metric. In theory, this approach was enticing, though in execution, it still couldn't compete with the CPM rates and efficiencies standardization brought. I leave the class with the question, how sustainable is it to force all display advertising to follow the IAB approach? Is advertising going to become really targeted, but really boring?

Focus on the Goals

The phrase "focus on the goals, not on the metrics alone" jumped out in last week's class. Over and over again I see companies intent on building website traffic, increasing ad impressions or boosting their number of facebook fans, with little understanding of why these activities might (or might not) be important.

Getting millions of people to your website is only valuable if they are qualified leads -- people who you might convert to customers, donors or advocates. If they are there for a reason that isn't core to your business, they might be a waste of resources.

The misalignment of goals and metrics isn't new (see this piece from Bain for a great non-digital example), but because digital marketing is so unfamiliar to many institutions, the possibility of misalignment is greater. Corporate executives are likely to see social media as an inexpensive "experiment" rather than a marketing strategy that is core to their business goals. Companies build digital operations, but approach them with less rigor and lower standards of accountability than other marketing plans.

Of course there are complications in the digital world. It's far more likely that a media mix will be responsible for a boost in sales than any one channel, and tracking back the "why" of success is often impossible. But the digital world offers tremendous opportunity as well. Right now, Facebook and Google allow information-gathering that have tremendous marketing implications.

Even more exciting, as convergence becomes a greater reality, there is opportunity for better conversion metrics on all media platforms -- particularly television. A "clickable commercial" or product placement would offer previously unheard of data directly related to placement, timing and quality of particular ads.

If marketers can remember that creating cool new stuff and attracting eyeballs are not goals unto themselves, there will be unprecedented opportunity to capitalize on new technologies.

How well do adults recognize marketing?

I'm sure we've all been here before-- your friend sends you a link to a funny YouTube video and tells you that it will change your world, make you laugh, or at the very least, bring you up to speed on the latest viral video hit.

This past weekend, while with my sister, she told me that "Oh my gosh, have you seen those Old Spice videos? You have to watch them. They're hysterical. HYSTERICAL. SO FUNNY. Get my computer. We'll watch them." What we watched was this video, and then clicked on about a dozen more after. Of course I laughed, but I also turned to her and said, "You realize this is just really good marketing?"

She responded, "Yeah...they're still funny".

She failed to realize that I wasn't asking if the videos were funny, they of course, were/are entertaining. I was asking her if she recognized it (had to and turned out to be) was part of a marketing campaign.

It left me wondering how well adults are able to decipher what is marketing and what is a viral video. And while a viral video must help spread brand awareness (i.e. she referred to it as The Old Spice" video), what tactics are being used to focus on converting those who become aware about the brand into a consumer. Looking forward to learning more about the digital marketing world in order to answer these questions.

E-Commerce Takeaway

Prof. Kagan’s first class was very enlightening – it was interesting to understand the structures applicable to the numerous internet companies that form an integral part of our daily life. One relevant company I would like to highlight is Zappos.

For those who are not familiar, Zappos is the largest US e-tailer of shoes, and is the perfect example of a company exploiting the long tail. As a dedicated customer of Zappos since 2002, I have numerous accounts of instances where styles and sizes unavailable elsewhere, have popped up on Zappos; and most importantly, at a lower price! Zappos has created a loyal following of repeat customers with their unique business and service model, growing into a $1BN company in less than a decade.(It has been acquired by Amazon as of 2009).

However, there is a contrarian view to their ability to sustain the long tail. Conjecture is that Zappos’ profit margins have eroded significantly, as it has changed its model from previously coordinating delivery between shoe-producer and end-customer, to now stocking merchandise in-house.

What lies ahead for Zappos and its like? Any thoughts?

Marketing and the Psychology of Media

In a “Psychology of Media” class I am also taking we have discussed the influence of advertising on children, specifically relating to advertisements made for children.

It is pretty obvious that advertising attempts to influence our reality in order to get us to purchase a product. If it works well with us, how much more successful is advertising with children, especially as they interact with other form of media beyond television such as the Internet?

In the article by Ali, Blades & Oates (2009), “Young children’s ability to recognize advertisements in web page designs” the authors discuss a research which has been done with children in the U.K. and Indonesia ages 6-12. As the Internet has become a growing medium for advertisers to market to a younger audience, the authors examine how well children can accurately recognize an advertisement on the Internet, and discuss how the results from their study have implications for theories on how children develop an understanding of advertising on the Internet and how they could be made more aware of marketing messages on the Internet given the increasing time and importance it plays in children’s lives.

Also for us as marketers, it is important to know and understand to what extent children actually recognize ads and how they respond to them. The fact that children can identify an advertisement does not mean that they understand the nature of advertising. Investigating the effects of unrecognized advertisements on web pages is an important issue for future research, because children’s increasing use of new media means that they are more likely to be exposed to advertisements that they do not recognize as marketing messages.

Digital Marketing: The Critical Trek for Multichannel Campaign Management

The recent study by Adam Sarner at Gartner justified Prof. Kagen's discussion about the affect of Digital marketing is prominent across various marketing channels. The key findings from his paper were as follows:

• Online trend has shifted back to social media, communities and networking aspect of why the Internet was originated.
  
  
• Marketers now have more opportunity to engage their customers through various digitla channels, devices and social activities.
  
  
• Adam also predicted that by 2015, digital strategies specially social marketing, will influence at least 80% of consumers' discretionary spending.
  
  
• The Mass-marketing campaigns with 2% response rate will not sustain.
  
  

Adam quoted a great example of the National Basketball Association's Golden State Warriors. How they utilized social campaign through their website to unveil their new logo and raised ticket sales of 440K by spending only5K.

Gartner classify digital marketing into four major type that are contextual, addressable, transactional and social marketing.

Contextual Marketing
SEO/SEM, Mobile Marketing, Analytics, Augmented Reality

Addressable Marketing
Digital Ads, Videos, Signage, In-Game-Advertising, Podcast

Transactional Marketing
e-mail Marketing, Lead Management, E-Commerce, Reviews, Cross selling, Loyalty Marketing

Social Marketing
Social Monitoring, Social engineering, Forums, Word of Mouth, Networking

Link to the Study

Why aren't FACEBOOK adspace prices higher??

Let me qualify what I am going to say by clarifying it is opinion based on my sentiments on Facebook and not on research.

Right now any ads run on Facebook are both underpriced with comparison to other advertising inventory online, as well as relatively ineffective. Why?

To me it seems that Facebook faces a conundrum. To keep the main area of their pages "pure" with the social utility of the posting and messaging, they must make Ad space minimal. SO as long as Facebook is as popular as it is, it seems that Ad space will continue to be minimal. BUT if Facebook becomes less popular, either due to novel competition or burnout, then they have space on their pages that could sell like Gold to the LONG TAIL of the remaining users of Facebook.

So either Facebook sells out some of its most loyal users and puts ADs more centrally located in the pages, and makes more money that way, or membership remains extremely high due to new functions and relatively low ads.

Thoughts?

Email in Online Marketing

During our first lecture, our class also discussed the use of email in online marketing. First, email is the root of almost all internet advertising; it is a terrific way to execute sophisticated marketing campaigns. Almost all interactions between the buyer and seller are recorded via email. To list a few examples, through email, vendors can confirm product purchases, send newsletters, verify a subscriber’s authenticity, distribute discounts to “friends and family,” and of course market themselves. Email marketing expenditures are particularly unique in that the marginal cost of an additional email sent is essential zero, although the cost of the systems that customize and launch emails is high. Given that email expenditures are mostly fixed, marketers strive to maximize the number of emails sent from one system. Considered one of the most important marketing channels, email depends on three types of expenditures: customer retention, customer acquisition, and customer-vendor transaction. Email is also key to consumer authentication and relationship management; one usually has to confirm his or her email’s accuracy to form a relationship with a vendor. Professor Kagan introduced us to some more lingo related to e-mail: Mailbox Provider, Email Service Provider (ESP), Inbox, Junk or Bulk email Folder, Bounce. We will be studying this topic in greater detail during the semester.

Lecture 1: Strategies and Channels for Digital Marketing

In the beginning of the lecture, I was excited to hear that there is a large growing market for online marketing. I was particularly impressed by the substantial growth forecasts for interactive marketing spend in the U.S.; Forrester predicts a 17% CAGR from now to 2014. US online advertising spending is also expected to grow significantly; eMarketer projects 9-12% annual increase until 2014. In addition to discussing growth trends of online marketing, Prof. Kagan introduced acronyms related to digital marketing: CMC (cost per thousand impressions), CPC (cost per click), CPA (cost per action). CMC defines the cost per thousands of ad images (also termed impressions). CPC is the cost per user's mouse click on the ad and CPA is the cost per user's action (when revenue is generated from the ad, for example). When discussing search engines, we learned the difference between SEMs (sponsored links that appear at the top of search results) and SEO (natural links that appear in search results but are not sponsored). The topic of display ads, or space on a website, was also intriguing. Examples of display ads include contextual ads, static images, rich media, and online video. Digital marketing is an entirely new field to me, so I was thrilled to learn about many new topics and the relevant jargon. I look forward to discovering a whole new area of marketing that is becoming increasingly important day by day.

Elvis Costello's Singing Songbook Tour

You don't need a class in social media or internet marketing to see the interactive possibilities presented by the Spinning Songbook being employed on Elvis Costello's latest tour. With a giant wheel of fortune populated with his songs instead of prizes, on stage, Elvis and his assistants create an entertaining and unpredictable show as audience members' spins create the night's set list.

This process creates a lot of excitement for the longtime fans of Elvis Costello, many of whom consider him their favorite artist, and who have also seen him perform possibly dozens of times over the years. Spinning Songbook ensures they will hear familiar songs, but also that an artist who usually challenges his fans with new music in person will be somewhat reined in.

As an attendee of last night's show, I was impressed by the amount of cell-phone documentation and communication that was taking place among the 50-ish audience members. Unfortunately, however, there is no provision for the Singing Songbook to be influenced or include the participation of online and social media communities. This is a tremendous missed opportunity for Universal Music, who controls Elvis Costello's catalog, to activate their releases through this attention and discussion.

A contest or a live YouTube broadcast including fans' choices from the net and Elvis' own participation in the online marketing could have exposed this event to many more people than saw it at the 20 or so shows he has just completed. While I appreciate that the paying customers shouldn't have their shows spoiled, it wouldn't have made a difference to the online community to wait until the last shows of the tour.

Greatest hits tours are a fact of life for classic rock artists, and Elvis Costello has a fresh approach (even though he first did this type of show in the mid-80s, it hasn't been adopted by anyone memorable since). His fans are smart and would have been apt to share and discuss, based on their actions at the show last night especially.

After the Final: Foursquare Redux - How to Cheat at Foursquare

Since every member of the class has now had a chance to pronounce and speculate about the future of Foursquare's business, this article on how to game the system to get points and badges is particularly timely.

It will be interesting to see how many early adopters stick with Foursquare, or whether check in fatigue turns out to be a reality. Chances are, it will all depend on whether real, tangible rewards begin to be developed beyond the badges and points.