Tapping the Scale of Social Networking

MySpace, Facebook, LinkedIn… the list of social networks seems as deep as the long tail of digital music. Social networks are everywhere and have been the darling of digital marketing over the last couple years. But why do digital marketers want their piece of the social pie? A few simple words… achievement of scale.

 

Why do national and international marketers still rely on television for the vast majority of their marketing dollars when everyone knows that TV audiences are shrinking, significant numbers of people are viewing additional media while watching TV so they are distracted and many people completely skip commercials using their DVRs? Marketers are looking for scale… the most bang for the marketing buck. The theory is that the more marketers bombard vast numbers of people with a compelling message, a good percentage of those people have to be paying attention. Then, a percentage of those people paying attention will take action and investigate the product or service. Then, an even smaller number will make the decision to purchase. By starting with such a large market (up to tens of millions of people depending on where the TV spot is running), marketers can quickly move the sales needle even if the medium is less effective now than it was even a year ago. So, how does this relate to social networks? Social networks are getting eyeballs in vast numbers, which is why popular networks like MySpace and Facebook have tremendously high book values. Marketers want numbers, and in theory, social networks can deliver those numbers.

 

From business-to-business networks like ITtoolbox (and its 1.3 million members) to professional networks like LinkedIn to networks of mommy bloggers, social networks are everywhere and consumers, professionals and businesses are using them. Not only are marketers taking advantage by advertising on networks like MySpace and creating applications for Facebook, such as Visa creating the Visa Business network for small businesses on Facebook, but they are also creating their own networks. For example, brands such as Luvs diapers are engaging consumers by allowing them (mothers of young children in the case of Luvs) to share their views on controversial parenting topics. The theory being that the more engaged your consumers are in conversation (with your brand as the backdrop), the more positive their view of your brand.

 

Even mobile consumers are getting involved in social networking. Based on multiple sources and its own analysis, eMarketer predicts that more than 800 million people will use their mobile phones to access social networks by 2012.

 

So, consumers are using social networks. So, what? Well, marketers have realized that if they can tap into networks, maybe they can harness the power of word-of-mouth in the digital space. Advertising programs on the likes of MySpace and Facebook haven’t been overly successful cash generators for the networks, however marketers are trying to find any way they can to gain access to the large amount of eyeballs on these sites. The successful marketers have figured out a way to use the networks themselves rather than relying on traditional digital mediums such as banner ads. One good example of a marketer harnessing a popular network was Toyota’s use of YouTube. Toyota posted “consumer” videos of people driving the Corolla. These “consumer” videos were actually shot by professionals using hand-held cameras to make it appear as if they were actual consumer videos, but it worked. A significant number of consumers mentioned the videos when they went to dealerships to test-drive the Corolla. Toyota tapped the network with videos compelling enough to pass along to friends and family… the digital world’s version of word-of-mouth marketing.

 

Social networks are used by millions and millions of people, offering the potential digital scale that marketers are craving. Banner ads can offer scale as well, but tapping (or even creating) a vast social network can lead to pass-along the likes of word-of-mouth, as well as high brand affinity and increased purchase intent. Many of you reading this article are a member of a social network. Whether it’s LinkedIn, Facebook or some other professional, business-to-business or purely social network, the number of members continues to grow at a furious pace. Are you tapping into social networks to grow your brand? Most likely the leader in your market is.

B2B Information Technology

Properly harnessing Information Technology in today’s economy can give your company a significant number of benefits, but only if it is implemented properly. IT can increase business process complexity as easily as it can improve business process if it’s implemented improperly.

 

Over the last decade, IT has offered up a vast array of business-enabling tools, including: websites, ecommerce, web conferencing, CRM systems, accounting systems, phone systems and other forms of communication.

 

The act of buying a piece of technology will not make any positive difference to your business. It’s what you do with the technology that determines if it will give you a significant competitive advantage. If you are purchasing a new system to mask a business management problem, you are not likely to see any return on your investment as IT should be viewed as an enabler not in itself a differentiator for your business. The key is how you implement the technology.

 

Questions to ask yourself if you are considering an IT purchase:

 

·          What are my objectives?

·          What will allow me to meet my objectives?

·          How will I know when I've got it? (measurement)

·          What steps must I take to make it happen?

·          Where do I invest at what level to manage risk?

 

Potential Benefits of IT:

 

·          Increase efficiency of internal company processes, such as customer service and accounting.

·          Improve decision making throughout the organization.

·          Increase timely communication with customers.

·          Increase accuracy of new business estimates by using comparable historical data.

·          Identifying market needs more effectively by understanding specific customer requirements.

·          Cross-selling of other products by highlighting and suggesting alternatives or enhancements.

·          Effective targeted marketing communications aimed specifically at customer needs.

·          Increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales.

 

When implementing new IT systems, be sure to follow these rules:

 

·          Make sure you put together a plan before making a purchase that outlines the benefits of the new technology. Without a written plan, your employees will not connect their performance to the technology, they will not measure the impact of the new system on performance and they will not change their behavior to make it work.

·          All of your various IT systems must “talk” to each other in an integrated, easy-to-use system. For example, your accounting software must talk to your CRM system, as well as your marketing dashboard. Without all of these systems synced, you will not have every piece of pertinent information at your fingertips.

·          Be aware of the groups in your company that are against the process/organizational redesign. If they are not addressed openly and sold on the benefits of the change, they could be the link that makes the new process/system fail.

·          Your IT system must provide fast, clear, actionable information. If your system reports information that is not already in an actionable format, it is useless in today’s fast-moving business environment.

The Strength of Online Moms

Moms are a force to be reckoned with online. From product ratings and reviews to social networking to spreading messages in word-of-mouth viral style, moms are an important group that marketers should take advantage of. According to three separate studies conducted over the last year (by Pew Internet & American Life Project, the National Telecommunications & Information Administration and Experian Consumer Research), about 86% to 87% of parents are online. Experian found that the figure rose to 94% among women who expected to have their first or second child in the next year.

In addition to the high Internet penetration of moms, eMarketer reports that the number of US adult female Internet users with children is about 34.2 millions. Nielsen Online (32.4 million) and comScore Media Matrix (30.1 million) also reported similarly high numbers. eMarketer also found that nearly 44% of all adult females who go online are mothers.

Whether online or off, new and expected moms are talking about products to friends, family and colleagues. According to BSM Media, 64% of moms asked other mothers for advice before they purchased a new product and 63% of mothers considered other moms the most credible experts when they had questions. Keller Fay Group and BabyCenter.com, in a 2008 study that compared women in the general public to new and expectant mothers, found that each week, women in the general public have 83 total conversations about products and 59 of those conversations mention a specific brand. For new and expectant mothers, those numbers rise dramatically to 109 total conversations and 70 brand-specific mentions, leaving the door wide-open for brand-related word-of-mouth pass-along. In fact, the same study found that 70% of pregnant and new moms trusted what they heard from other moms and more than 50% said they tended to pass that information along to others. Further supporting mom word-of-mouth, NPD Group found that nearly three-quarters of the mothers surveyed received product information via word of mouth or online, and SheSpeaks found that 87% of female Internet users will mention a favored product in conversation, 67% will call others to let them know about the product and 64% will forward an e-mail link to others.

Marketers are beginning to realize the power that moms are wielding online. A small cross-section of the power of online women can be seen in the popularity of “mommy” blogs (blogs written by and for mothers and expected mothers) and entire women-focused blog networks such as BlogHer. Just a few years ago, women had to rely on their own moms, other mothers, books and offline groups to find and share motherly information, now those women are doing these things online – tracking down parenting advice, researching products, joining groups alongside other mothers and sharing their experiences with other new and expecting moms. From online ad campaigns that stretch across mommy blog networks to BlogHer sampling programs, marketers want to get their products in front of moms and mothers-to-be. With the propensity of moms to seek out and then share information, marketers want to get their products in the hands of would-be users and clearly broadcast their brand messages. To do this, marketers are using tools that encourage trial and information sharing, including: product sampling, couponing, blog tags, portable content that can easily be picked up and shared across the Web (including the use of tools such as ShareThis), brand blogs, testimonials from real moms and even connecting directly with bloggers to secure product reviews, which can be very powerful when a blogger has a strong following or belongs to a network of bloggers and posts a positive review. Like marketing to any other group, negative word-of-mouth is a risk that marketers must face when approaching moms online – you must be credible, respectful and above all must have a product that has a perceived benefit in order to effectively use these tools.

New and expectant moms make up a perfect group for baby- and mom-related marketers. This group is the epitome of a target market – large size, large spending power, shared interests, strong desire for information and the desire to share product experiences with others. From women’s social networking sites to mom-friendly products, marketers are taking advantage of the power of moms and expected moms. If you have a product or service that is aimed at moms or expected moms, you are missing a tremendous opportunity if you are not taking advantage of the online tools that are available to you. When in doubt, go ask your mom if you can go online and play.

Online User Reviews

If you spend any significant amount of time on the Web, you’ve probably used it to research products and more than likely ended up buying something either online or in-store that you researched online. One tool that continues to skyrocket in popularity due to its very high credibility level is user-generated reviews. Consumers view user reviews as a more and more critical piece of information in the purchase decision making process, and they are actively seeking them out. However, if you are on the other side of the table and are running an e-commerce website or offer any sort of link-to-buy function on your site, you most likely do not offer user-generated reviews. The primary issue is that user reviews by nature put the user in control of the message and take it out of the hands of marketers. This is exactly why user reviews are so popular and is also the reason that they make marketers very nervous.

A recent study by Deloitte showed that 62% of US Internet users read product reviews written by other consumers. And not only do a majority of US Internet users read user reviews, but as eMarketer reports, consumer-generated reviews are viewed as either somewhat or very credible by 99% of US Internet users. Deloitte also conducted a separate study that showed 42% of US online shoppers thought that featuring consumer reviews on websites increased consumer trust in the sites and presumably the products on the site.

Not only are a majority of people reading user reviews and nearly all users believe they are credible, but a report from JupiterResearch showed that in a study of online social network users, consumers were three times more likely to trust user opinions than advertising when making a purchase decision. The Deloitte study also showed that more than 80% of users who read consumer reviews were influenced by those user reviews.

In addition to enhancing credibility, building trust and influencing purchase, user-generated reviews can also:

• Improve search results because reviews add a greater volume of site content and are updated frequently
• Become syndicated content
• Provide feedback to the company on the cause of negative reviews

With all of these benefits, you would think it would be an easy decision to offer online user reviews. However, more than 66% of US e-commerce sites do not offer consumer-generated reviews, according to an August 2007 study by Vovici. Many times, marketers are not willing to give up control of the messages on their site in fear of negative reviews. But according to a Bazaarvoice trend analysis, product and service user reviews are very positive, with an average rating of 4.3 out of 5. In the study, Bazaarvoice found that of those people who had contributed one or more online reviews, 36% were positive every time, 51% were positive most times, only 1% were negative most times and only 1% were negative every time. An eMarketer study backs up the fact that the vast majority of consumers are not looking to seek revenge on a retailer when developing reviews. In fact, in the study, 9 out of 10 reviewers posted reviews to help others make better buying decisions and close to 80% posted reviews to reward a company for a good buying experience. Other studies have shown that even when reviews are negative it's not necessarily a bad thing. Actually, allowing the posting of negative reviews increases credibility and increases purchase intent as it shows that bad reviews are not being filtered out and that the reviews are legitimate.

Even with the potential for negative posts, consumer-generated product and service reviews should be a product or service website “best practice”, “must-have”, “price to play” and any other cliché you want to use. The potential upside far outweighs the risk marketers take when they allow consumers to post opinions. While the overall percentage of sites offering online reviews is still low at around one third of sites, online retailers are slowly beginning to accept these risks. Nearly one-quarter of the businesses included in Internet Retailer's "Holiday Sales Expectations" study conducted prior to the holiday 2007 season said they had added customer reviews for the holiday season. This percentage was third on the list of additions behind only order tracking and faster checkout.

The marketing world has changed over the last five to ten years and will continue to change at a very rapid pace. One of those important changes is the level of control consumers are demanding from marketers. Consumers want 100% transparency in product and service quality and pricing and will use that information to their advantage whenever possible. One of those advantages consumers are seeking is the first-hand knowledge gleaned from real-life users of products and services in the form of user-generated reviews. Consumers are actively seeking out user reviews when researching products and services, and multiple studies have shown the benefits to both the consumer and the marketer. The question is, are you willing to give up some control to win a new customer?

Behavioral Targeting

Behavioral targeting is defined as the serving up of online advertising messages based on what pages the user has previously visited and/or what the user has previously searched for over a specified period of time. By tracking a user’s Web history, behavioral targeting allows publishers to serve up ads that are more relevant to the user by allowing publishers to change ad creative on the fly for different users. And, the future for behavioral targeting looks bright. According to an eMarketer report in the second half of 2007, spending for Internet advertising with a behavioral targeting component will increase from $575 million in 2007 to $1 billion in 2008.

Behavioral targeting can take place within an individual site or across a network of sites. If a publisher, Yahoo! for example, knows that a user visited a number of Y! Health pages of the site, they can then serve up health-related ads when the user hits any other page of the site whether that page is health-related or not. Since the user has shown a propensity to view health content, Yahoo! can track that user and serve up ads that may be of interest to that particular user based on previous page view history. This same method can work across a network of sites as well. For example, a user may visit several pages of FoxSports.com, then visit an automobile page of MSN.com and then check his email on Hotmail.com. In this instance, MSN would be able to theorize what type of ads the user would be interested in. So when he hits his Hotmail inbox page, he may see an ad for a new sports car, whereas another user with a different Web browsing history would see a completely different ad. According to a Forrester report on consumer attitudes toward advertising from November 2006, there are three main sources of advertising irritation to consumers: ads are too numerous, disruptive and irrelevant. Behavioral targeting was created to help answer these complaints, as well as command premium ad placement fees by serving up fewer, more relevant ads.

While different types of online targeting have been around for years, many people do not understand the differences – even between the two most common targeting methods, behavioral and contextual targeting. The difference is that behavioral targeting serves up ads based on previous search or browsing behavior while contextual targeting serves up ads based on the current content of a Web page. For example, Google AdSense ads are a form of contextual targeting, as is the serving up of a 2009 Honda Civic ad on a used Honda search results page of Cars.com. To lessen confusion, it is easiest to distinguish these two forms of advertising in this way:

Behavioral targeting – serves up ads based on a user’s search or browsing history
Contextual targeting – serves up ads based on current content the user is viewing

While publishers like the fact that behavioral targeting makes inventory more valuable and marketers are embracing this form of marketing for its effectiveness, consumer groups are not fond of publishers tracking users across the Web. In fact, some groups are calling for a national do-not-track list similar to the famous national do-not-call list to help curb this sort of tracking. Also, some groups are calling for sites to instantaneously disclose what a site intends to track. In an effort to head off these consumer group complaints, some of the larger publishers are putting increased emphasis on how, what and when they track. For example, AOL announced on October 31 that it will initiate a major campaign to educate the public that it only tracks non-personally identifiable information. AOL also announced that the company will offer a permission-based opt-in to behavioral tracking, which is something consumer groups have been calling for.

One company pushing the envelope of behavioral targeting is NebuAd. The company announced at the ad:tech New York Conference in November that their new behavioral targeting system generates a greater percentage of ad conversions and higher ROI than any other behavioral system. According to the company’s CEO Robert Dykes, NebuAd receives analytical information about which ads work best, and in turn, the higher ad effectiveness increases the value of inventory above and beyond what other behavioral systems offer. The driving force behind NebuAd’s system is that their hardware tracks at the ISP level rather than the site or network level. By using ISPs, it enables NebuAd to track a user’s movement across the entire Web rather than just a specific site or a network of sites. To protect consumer privacy, NebuAd uses one-way hashes to anonymize user identities. NebuAd takes the approximately 70 percent of ads that are currently untargeted and targets them by observing Web searches, Web pages accessed, and the ads consumers click on. It then creates and updates anonymous consumer profiles to better focus ads. The company charges advertisers and shares a percentage of those revenues with publishers and ISPs. It is too early to tell how effective NebuAd’s system is or what the consumer group reaction will be, but there are already copycat systems being announced, and as everyone knows, imitation is the sincerest form of flattery.

Behavioral targeting has many benefits, including increased ad effectiveness, increased value of ad inventory and even an increase in ad relevance for the consumer. These benefits have caused explosive growth in the marketing dollars allocated to behavioral targeting, which shows no signs of slowing down in the near future. However, consumer groups see behavioral targeting as a violation of privacy and are doing everything they can to limit the depth of tracking. Publishers have responded by trying to make their tracking methods more transparent, as well as beginning to create voluntary tracking opt-ins. No matter which side wins the battle of public opinion, one thing is certain: behavioral tracking systems will continue to evolve by increasing the depth and breadth of information collected in an effort to optimize ad trafficking while at the same time addressing consumer concerns before legislation forces it.

Relationship-building, Email Style

In a July 2007 The McKinsey Quarterly study, email marketing spending scored the lowest projected increase in a list of popular online marketing tactics and finished with the highest projected decrease in spending over the next three years. While it’s true that, on a whole, online marketers are planning to pull back on email spending, consumers are still signing up to receive newsletters, promotional emails and new product and service announcements at a steady rate. Long story short, no matter what online marketers say, consumers are still asking for relationships with the brands they love and email is still a big part of that relationship.

Over the recent past, consumer patience with non-solicited email (spam) has fallen to an all-time low, there has been a steady increase in the adoption of more efficient information delivery methods such as RSS, and there has been a continued rise in the use of spam blockers. One would think that these forces would indeed put negative pressure on overall email use and spending by marketers. However, Penton Media Custom Research reports that of the online marketing tactics used by US marketers in February and March 2007, email marketing and email newsletters were used more often than any other tactic including banner ads, blogs, viral campaigns, search engine optimization and podcasts.

Adding to what Penton found, we recently conducted an online survey for a consumer packaged goods client where over 95% of the more than 800 respondents said that they prefer email communication as the primary means of brand communication, above RSS, text/mobile messaging and five other online marketing tactics. Beyond just preferring this method of information delivery, more than 90% said they prefer email communication more often than just once a month. Consumers are looking for relevant, targeted, personalized content from their favorite brands and beyond tolerating email communication, they are asking for it.

Consumers are asking for relationships from their preferred companies and are looking to build relationships with their favorite brands. According to Silverpop, retail marketers understand that building a relationship with consumers is important and leads to long-term sales. As such, retail marketers are making it easier to opt in and out of campaigns, and they are learning to ask customers for more than just e-mail addresses to help craft personalized messages. eMarketer states that in 2007, nearly six out of 10 companies will send their e-mail recipients to pre-populated Web forms if they want to opt-out, up from 30% who did so in 2005, making it easier to end communications on the consumer’s terms. In addition, nearly two-thirds of e-mail opt-out links in 2007 led to a page for registrants to make changes to their preferences. In 2005, only 12% of e-mail marketers did so. Not only does ease of opt-out help build a trusting relationship but taking consumers to a preference page instead of a simple opt-out may convince consumers that the company has something else of interest, even if they no longer want a particular communication.

Not only is it important to communicate with consumers when and how they want, but it is important to build trust from the beginning, by starting the conversation when a consumer asks for it. eMarketer reports that Mike Weston, managing director of Silverpop EMEA, believes effective e-mail marketing tends to resemble polite conversation. "There are rules of conversation," Mr. Weston said. "Companies that fail to respond when someone gives them an e-mail address are doing the equivalent of ignoring them face to face in a store."
If consumer desires aren’t enough to convince you to continue the use of email communication, listen to online marketers who reported to MarketingSherpa in March that more than one-half of US marketers stated that e-mail marketing produced the second best ROI of any marketing tactic. Only search engine optimization was more highly regarded for ROI. Yet, eMarketer predicts that US e-mail marketing spending will reach $1.65 billion in 2011, up from $1.5 billion in 2007, so the annual growth rate will slow from 5.6% in 2006 to 1.5% in 2011. Consumers are asking for relationships with brands and the ROI payouts are there, so why is email spending predicted to decline? Researchers believe that while the number of emails sent will actually continue to increase steadily, efficiencies in email delivery will offset those larger increases in number of emails sent by reducing costs. As such, email spending will increase at a slower rate than the rate at which the number of emails sent will increase.

Many people believe that email marketing is dead or is in the process of a slow death. However, consumers are still asking for brand relationships that are buoyed by email communication. I would highly recommend against using email as your only means of communication with consumers, but it should not be ignored in the face of negative publicity. In addition, the ROI payouts have been proven, so it shouldn’t be too difficult to sell your CMO on the tactic either.

Marketing to a New Tech-Savvy Generation

Originally Published: August 2006

As schools open for another year and college students arrive on campus, now is the perfect time to discuss the new tactics marketers are using to target the next generation consumer. In the beginning, marketing tactics were used to deliver mass market messages such as television commercials running on one of the original three networks. This technique worked very well since a heavy majority of the population could be reached in one fell swoop. Since most people were watching one of the three networks, these marketing messages hit people “where they were” – in their living rooms. But, the marketplace is far different today than it was even 10 years ago. Mass market advertising no longer works for the vast majority of marketers. Due to the fracturing of traditional mass media vehicles such as television, magazines and newspapers, marketers are implementing more tactics in far less traditional media outlets to accomplish the same marketing goals.

The most obvious example of this change in marketing can be seen with companies that are targeting the younger generation – those in high school and college. Unlike other generations that watched one of three television networks and spent most of their free time playing outside, the current generation grew up with hundreds of television channels, high-tech video game systems, powerful computers, cell phones and the World Wide Web. Because of all these gadgets, free time is now split between hundreds of media outlets instead of just a handful. This fracturing is making it much more difficult to efficiently target individuals “where they are”. However, savvy marketers are now implementing campaigns that are integrated across many channels of new and traditional media to hit prospects where they work, study and play. One great case study for how to target young consumers is an integrated campaign that Jeep recently launched to promote its new Compass SUV.

Here are some of the elements of the campaign:

· Jeep has launched a nationwide concert series named “Uncharted: The Jeep Compass Music Tour".
· Jeep has created a MySpace page where fans can add Jeep as a "friend" to receive information on concerts in their areas.
· Jeep has also created a profile page on Facebook where concert updates are sent to friends' pages or via text message.
· Jeep is using banner ads on MySpace and Facebook to drive traffic to the Jeep profile pages.
· Jeep is one of the first advertisers of MobiTV, a self-described "cable TV network for mobile phones" that has half a million subscribers for its live TV and content subscription services.
· Jeep has launched a karaoke website and viral video contest where visitors to the site can create an avatar for themselves and choose from three songs, which can be sung into a computer microphone or over the phone via a 1-800 number. Users can then email the video to friends who can vote for the performances.
· Jeep has purchased online ads on AOL, MSN, Yahoo and entertainment, fashion and music sites like Daily Candy, MTV's Real World, Yahoo Music and Batanga.
· Jeep has also created a contest where users can create their own Jeep ad online. Once the ad is reviewed, it will be posted on the web, allowing users to vote for the best ads.
· Jeep has also purchased advertising on TV and the web (Jeep and Compass homepages, YouTube and Lat34.com), as well as print and radio.
· Jeep is also launching an outdoor advertising campaign including billboards, bus shelters, painted walls, building wraps and buzz marketing at beaches and clubs.

This is what marketing experts had in mind when they coined the term “integrated marketing” years ago. Jeep has launched a campaign that hits everywhere – online, TV, radio and print. While most marketers have yet to launch campaigns this sophisticated, the Jeep example is what it will take to target consumers in our ever-changing, ever-fracturing marketplace.

A little side note on MySpace. This social-networking site recently surpassed Yahoo! Mail and Google as the most popular U.S. website, according to Hitwise. In the week ended July 8, 2006, 4.5% of all U.S. web visits were to MySpace.com. Visitors to the site have grown 132% in the last year and 4,300% in the last two years combined.

One marketer taking advantage of the popularity of social-networking websites is Chase. Chase is running banner ads on Facebook asking members to join a Facebook-hosted group page of people who want to learn about or sign up for Chase's new "+ 1" credit card. Students can earn rewards points by getting a card, referring a friend and other actions.

Other marketers targeting the young are adding customized ads in downloadable college textbooks. The ads can be posted as long as an advertiser wishes, and they can be swapped out so advertisers can change their messaging depending upon the season. Colleges currently participating in the program include the University of Michigan, Georgia Tech, Fordham, Clemson and Carnegie Mellon. The books will be available on 150 campuses, with the potential to reach 250,000 students.

Campus Media Group is targeting college students with ads and special offers via mobile phones. To date, 3 million students have opted to receive the ads on their cell phones with messages consisting of text, images, audio or video. Students opt in through their wireless providers to receive the messages, and Campus Media Group limits the number of messages to four per month. According to the company, approximately 20% of people forward messages to a friend.

A study by Experience, Inc. reported some other statistics to consider when marketing to the younger generation:

· 98% of college students said they have made a purchase of a product or service online
· 52% said they have purchased a product or service based on an online advertisement
· 34% find online advertising the most influential means to get them to learn more about a product or service
· 41% said online advertisements would resonate if they are related to the content being read or viewed
· 34% said a contest or promotion that presents them with some value would motivate them to act on the advertisement
· 17% said they would respond to a banner ad that is based on their profile or online behavior

While the marketers in the examples I have included are using new media to target the young, I would argue that these techniques are actually showing us a glimpse of the future. Soon, you will see similar techniques used across all age groups as older generations master new technologies. Also, young consumers are aging everyday. Sooner than we think, these “new media” consumers will make up the majority of society. Just remember, according to the Entertainment Software Association the average video game player is now 33 years old and 25% of Americans over the age of 50 played video games in 2005. Integrated marketing campaigns can no longer include only TV, radio and print media. The sophisticated consumer of today must be reached via the proper mix of online, offline, new and traditional media. Gone are the days of mass marketing, and we welcome the days of niche and one-to-one marketing. Well I better run, Madden 07 just came out and I need to go online to take another beating from a 12-year old.

Online vs. Offline Marketing

Originally Published: July 2006

The relative effectiveness of online and offline marketing and communications presents somewhat of a dilemma these days that results in great debate about the right and wrong approaches to marketing products and services in today’s marketplace. It seems that we can’t have one type of marketing without the other. As with all new media, people are quick to toss out the old and welcome the new with little regard for overall marketing objectives, audience demographics and purchasing behaviors or preferences. However, caution must be taken when contemplating the opportunity to reduce costs with an online program. Will your online program deliver the same or better results than your current offline program? Or are you actually wasting marketing dollars rather than saving them?

Unfortunately, as with many marketing solutions, the answer to whether you should use online or offline media communications can be answered with a nondescript… “it depends”. To answer the question, you need to ask yourself: What media is available that effectively reaches my target audiences? What media do prospects and customers access in the industries/markets I want to reach? What are the ROI projections telling me? Am I looking for new business sales leads, trying to strengthen the brand or looking for the most cost-effective means to retain customers? All of these questions – and many more – will drive the answer to the online versus offline decision.

Clearly, the answer for most companies is that an integrated marcom program that includes both offline and online marketing provides the most effective means by which branding, customer retention and new business development objectives can be met.

The goal of the marketer is to reward the prospect throughout the marketing chain of awareness, interest, desire and action. How do we go about doing that and which vehicles should be chosen? The following is bulleted information that provides food for thought when evaluating online and offline marketing alternatives for your company.

· Offline tools include magazines, newspapers, television, radio, direct mail, outdoor advertising, etc.
· Online tools include websites, online advertising, banner ads, content sponsorships/links, search engine optimization, pay-per inclusion, pay-per-click, permission-based e-mail, online coupons and promotions, blogs, podcasts, webinars, rich media like streaming video, etc.
· Online programs are normally less expensive to execute – the most notable savings come from the elimination of printing and postage and a reduction in production costs
· In-house, opt-in e-mail programs deliver greater effectiveness than rented e-mail lists or direct mail programs
· Traditional offline media still has greater reach but online media has less waste – typically, trade publication advertising achieves prospect acquisition goals whereas online media has proven to be more cost-effective for retention
· Branding can be accomplished through either online or offline alternatives but an integrated program using both is most effective
· Offline media is still effective in driving traffic to the website – but once online, the visitor must find immediate gratification
· Online media offers less expensive distribution, greater personalization, higher response rates and greater tracking capabilities than offline media
· Content is important in offline media but critical in online media
· Search is more effective than banners and button advertisements by a three-to-one margin
· 85% of US business managers use search engines
· 36% of searchers assume top listings, whether sponsored or natural results, represent top brands
· Paid search will grow from $4.2 billion in 2005 to $7.5 billion in 2010, accounting for 40% of total online ad spending
· 62% of search engine users click on links returned within the first page of search hits – 90% within the first three pages
· Searches were up 55% to 5.1 billion searches in 2005 compared to 3.3 billion searches in 2004
· Remember that search engines are a passive tool awaiting activation by the user whereas online and offline advertising, e-mails, direct mail and promotions are proactive, stimulating action
· Permission-based e-mail is an interactive communication channel
· Research shows that an integrated marketing program incorporating both online and offline media is more effective than either an individual offline or online program
· Research has shown that incidental memory for ad content is significantly lower in online media compared to print media – repetition online is even more important than offline
· 98% of businesses in the US are connecting to the Internet via a high-speed line, opening the door for rich media, particularly video
· 95% of B2B marketers indicate that the largest benefit of online media is its ability to complement and enhance the use of traditional offline media

While there is not a blanket answer on what combination of online and offline media will work for your specific situation, I do highly recommend an integrated campaign that takes both types of media into account. As consumers and business decision makers increasingly go online to conduct product and company research, online media will continue to garner larger portions of the marketing budget. However, there will always be a place for offline media in nearly all marketing situations. The decision of online vs. offline vs. integration of the two comes down to your target audience. What do they read, watch, participate in, believe, feel and think? Do they want to seek out information about your company or products or do they want you to interrupt their routine with a marketing message? Let them give you these answers, or go out and ask them with market research. Today’s sophisticated consumers will tell you how and when to reach them and what they think of you and your competition. Just remember, it is okay for the truth to hurt a little.

Search Party

Originally Published: April 2006

It seems everyone is searching for something these days – shoes on Google, sports on Yahoo!, jewelry on MSN and the list goes on and on. While I’ve discussed search engine marketing in previous columns, new data continues to prove it is a subject that is not going away anytime soon. A recent report by Nielsen/NetRatings showed that the overall search growth rate in March 2006 over 2005 was 36%. Both Google and Yahoo! exceeded that overall search growth rate with 41% and 47%, respectively, over that time period. In addition, a Harris Interactive Poll showed that 80% of Internet traffic begins at a search engine and according to DoubleClick, 41% of Web users find companies through search rather than typing a URL directly into a browser. While these numbers reinforce the fact that search marketing remains a hot topic, there are some additional new technologies that are fueling this growth by allowing advertisers to target via user behaviors, day parting, geographic parameters and demographic parameters.

ValueClick Media’s User Retargeting program is one example of behavioral targeting. It works by checking to see if a user has visited one of ValueClick Media’s advertiser sites. If a user has visited any of the 13,500 advertiser sites within the ValueClick Media network, that user is then retargeted with highly customized ads based on what site the user visited previously. According to ValueClick Media, in preliminary campaigns that were compared to run of network campaigns, User Retargeting resulted in up to a 26% improvement in the average cost-per-visitor, a 59% improvement in the average cost-per-sale and an overall conversion rate increase of 1,800%. In addition, these user retargeted campaigns generated a 223% increase in the average order value. This demonstrated success is good news for ValueClick Media considering eMarketer research indicates that behavioral ad spending will reach $1.2 billion in 2006, up from $925 million last year. And, they believe it will reach $2.1 billion by 2008.

Another more recent search marketing tool is day parting. Like television advertising, online day parting allows an advertiser to target specific times of the day with ads. Kanoodle, a distributor of sponsored links, is one online company that allows advertisers to day part. The company has also added a tool that allows an advertiser to target ads geographically via a user’s IP address. This addition completes the company’s LocalTarget product, which uses topics or subjects to identify content targeted at specific markets. By combining these tools, marketers can very precisely target the audience by day part, contextually and geographically, making the advertising more effective and improving return on investment.

Demographic-based search marketing is one of the newest online advertising techniques. MSN adCenter recently joined the demographically-targeted search game. adCenter will use the data it has collected through Passport, MSN’s registration program for other Microsoft services such as Hotmail and MSN Messenger, to target searchers. Demographic targeting may end up being the most important method of search marketing, but because it is so new, it has yet to be made clear on whether an ideal targeting system can be found. While MSN has collected information on thousands of users with its Passport system, the system is still limited to only those that have registered their information. Google and Yahoo! also have versions of demographic targeting, but both only apply to their content networks. So, there is still no perfect system in place. In addition, most likely there will be at least some market backlash from privacy concerns that may hinder the growth of demographic-based targeted search.

With all these new technologies hitting the marketplace, it is important to remember that no one advertising outlet will be enough to accomplish all of your marketing goals. With so many media outlets, both online and off, effective integration of your marketing campaign is critical. Your campaign should have the same look, the same feel and most importantly the same message regardless of the media used to reach prospects. It is also important to remember that according to a SIMM study 66.2% of consumers regularly use TV and the Internet simultaneously. So, if you have an offline campaign for a new product (let’s say a TV commercial), you must tie your online marketing efforts to it. For example, Pontiac is running a television commercial that asks you to “Google” Pontiac to “see for yourself”. If you do indeed “Google” Pontiac, you will see that Pontiac has the first sponsored link and in the second position is a targeted ad for Pontiac dealers. This is a great example of integrating online and offline campaigns.

While I have included just a few examples of the many new technologies in search marketing, it is important to remember that these new technologies are helping to drive search marketing spending and in turn overall online ad spending. Staying on top of all the new search marketing developments is a challenge, but the payoff is worth it. If done correctly, targeted search marketing will decrease your cost-per-visitor, cost-per-sale and most importantly overall return on investment. Isn’t it time you sent out your own search party? Now get out there and hunt for more website visitors.

Convergence is a Reality

Originally Published: March 2006

The convergence of television, radio, movies and the Internet appears to finally be upon us. In the early days of the Internet, one of its greatest promises was of bringing all forms of digital entertainment together and delivering it right into our living room or office in one shiny package. Over a decade later, that promise is becoming reality.

Up until now, the lack of widespread broadband Internet access and the lack of PCs powerful enough to power all forms of entertainment hindered the convergence of television, radio, movies and the Internet. Consumers did not have the ability to reliably and quickly receive streaming audio and video. With long load times and poor quality, even audio and short video clips were too much for dialup. But as broadband has exploded in growth, and the PC has grown into a powerhouse, so has the opportunity to converge.

Along with improved technology, consumers are showing an increasing desire for individualized entertainment experiences. More and more Americans want entertainment on their terms… when and where they want. Digital video recorders, mobile phones with audio and video capability, inexpensive digital still and digital video cameras, PDAs, handheld video game consoles that play movies and digital music, satellite radio and iPods (with video and audio capability) and other digital audio players have made it easy for consumers to access their favorite TV shows, movies and music anywhere and everywhere they want. Personal choice is driving consumption. With these new technologies, people are creating and publishing personal videos, composing and broadcasting original music and creating personal online outlets with services such as MySpace.

The popularity of devices that allow consumers to access content when and where they want is most obvious in Apple’s iPod. As reported by Marketing News, Apple sold 42 million iPods in 2005 with 14 million sold in the quarter ending December 31, 2005. The launch of the video iPod only increased the public’s desire for the product. iTunes sold one million video downloads in the first 20 days of the video iPod’s launch in October 2005 and eight million video downloads were sold through mid-January 2006. iTunes now has approximately 83% U.S. market share of legal music downloads and according to NPD Group/NPD Techworld, Apple holds a 73.9% market share of all digital music manufacturers.

The popularity of devices such as the iPod, digital video recorders and satellite radio is increasing the speed at which traditional media outlets are fragmenting. This fragmentation continues to affect major networks and broadcasters as the captive audience they once had continues to diminish and consumers increasingly feed their entertainment desires on their terms. These major networks and broadcasters used to control distribution of radio and television, but that is no longer the case.

True convergence will only exacerbate this trend. As the home PC becomes the hub of home entertainment, consumers will have access to literally thousands of radio stations, television channels, movies and web-based entertainment at the click of a button. Companies like Dell and Sony are already producing computers that serve as the entertainment hub of the home. Sitting in your living room lounge chair, you can now watch one NCAA tournament game in high definition from the local CBS affiliate, click over to watch your alma mater play in a different tournament game on sportsline.com, surf over to eBay and buy the first Sweet 16 t-shirt that your school has produced in fifteen years, click over to ESPN to check how your five brackets are doing in their $10,000 bracket contest, switch over to MySpace to see if any of your “friends” are at the game, then you can Instant Message your dad to discuss the goaltending call the referees just missed, and when your team finally wins the game, you can go to Wikipedia to research just how good the Connecticut Huskies are since you’re looking past George Mason, as that is obviously a “gimmee” game. To some this sounds like the promise of what the future might bring, but in reality, the dream of convergence (with the Internet and your home PC as the entertainment hub) has finally arrived.

While convergence will continue to give the traditional media conglomerates (including television, radio, newspapers, magazines, etc.) problems with ratings and maintaining advertising revenues, it is great for the consumer who wants entertainment on-demand. Media organizations will have to come up with effective ways to sort out their audiences and allow marketers the opportunity to effectively target specific audiences. And the consumer will only have to sit back, relax and enjoy the converged experience. Isn’t it time you put your feet up and let the entertainment come to you?

Viral Marketing

Originally Published: February 2006

Viruses are feared both in the online and offline worlds. They latch on (many times unknowingly), take hold and spread extremely quickly. Viruses can inflict serious damage and there is little that can be done until symptoms arise, which is usually when the damage has already been done. However, this exact concept has been harnessed by savvy online marketers for effective, low-cost brand promotion. Dubbed viral marketing, the concept of one person spreading a message to a few others who turn around and spread it to a few others who turn around and send it on and on and on until millions of people have viewed the message continues to be an effective online marketing tool. From the time Hotmail pioneered the concept until now, marketers have used this ultimate form of online word-of-mouth marketing to quickly promote brand growth.

Around 1996, Hotmail decided to try a novel concept (at the time) – free Internet-based e-mail. To promote the service, the company attached a line at the bottom of users’ e-mail encouraging the mail recipient to check out and pass on the Hotmail service. In its first year and a half, Hotmail signed up over 12 million users. The most interesting aspect is that from the start of the service with zero users until the time they hit 12 million users, Hotmail spent less than $500,000 on marketing, advertising and promotion. This is an amazingly low number considering $500,000 would have bought the company about 6 seconds of a Super Bowl ad this year.

As the Hotmail example shows, viral marketing is popular because it is relatively easy to execute, offers lower costs than other forms of online marketing, has a built-in targeting mechanism (people who are interested in the offer, product or entertainment value of the message pass it on to others that they know would be interested as well) and high, rapid response rates if the campaign is executed correctly.

The important things to note when implementing a viral marketing campaign are:
· Use a message that entertains or promotes the giving away of valued products or services
· Make it as easy as possible for a recipient to pass it on
· Create a “cool” message and allow it to take on a life of its own

Entertainment can come in the form of interesting or funny commercials, fun games or attention-getting audio. One recent example of the power of entertaining viral email was the video of a house with a spectacular Christmas light show that was set to music by the Trans-Siberian Orchestra. The video shot just south of Dayton in Loveland, Ohio, surfaced around Thanksgiving and spread so quickly and drew so much attention that it became a national beer commercial before Christmas. The man who set up the display actually had to shut it down because it snarled traffic in his neighborhood.

Games are another entertaining form of viral campaigns. As I’ve stated in other columns, advergames are extremely effective at providing entertainment for gamers while pushing a brand at the same time. Many companies offer the option of sending game web links to family and friends at the click of a button. Giveaways and contests are another great way to spread a brand message. If someone spots a valuable giveaway or contest, they usually want to involve their family and friends. People have a natural tendency to want to help or impress their family and friends, so informing others about giveaways, contests, or just a fun game or entertaining video makes people feel good. They want to spread the word, not only to help their friends but also to gain a sense of being on the cutting edge – “Look at the cool thing I found.” So, the sender feels good about it, while the company that originated the message receives the benefit of more eyes on the branded message.

Once an interesting message has been crafted, marketers must make it extremely easy for a person to pass it on to others. Send to a friend buttons are the most popular and easiest way to do this. Also, making it easy to pass along an attachment or encouraging people to forward a web link are other great ways to make it easy for the message to spread quickly.

There tends to be a thin line between the success and failure of a viral marketing campaign. That success depends heavily on the coolness factor. People want to show off interesting, funny, new, cool things. The most successful viral campaigns also tend to be the ones least controlled by the company sending the original message. Generally speaking, the more a viral marketing campaign is planned and controlled, the less likely it will succeed, while the less a campaign is controlled and allowed to spread out and do its own thing, the more likely it will be to build a strong following. It is very similar to the street credibility of a rapper. If someone raps about the tribulations in his life, when he actually went to prep school in New England, that rapper has no credibility and will likely flop in the music industry. The same can be said with viral marketing. The company or brand should release a great message that the target group would be interested in, make it easy to pass on the message and then let it run its course.

While people tend to have negative views of traditional commercial messages, viral marketing has become somewhat of a pastime for Americans. A study by Sharpe Partners found that 89% of U.S. adult Internet users share content with friends, family and associates by e-mail, 63% share content at least once per week and 25% share daily or almost daily. This content includes jokes, news stories, short movies, web links and other marketing messages. Sharpe Partners learned that adding overt brand messages only slightly reduces the likelihood that content will be shared with others. Only 5% of respondents said they refuse to share content that contains a clear brand message and 89% of those who receive e-mails with brand sponsorships had no adverse feelings toward the brand or message.

Viral marketing also allows you to promote your brand message to a targeted group far beyond the original audience. People pass the message on to others who they know would be interested, thus your message can hit portions of your target market that you could never hope to reach on your own. Because individuals become the medium (rather than traditional direct mail pieces, launching a nationwide television ad campaign, etc.), the cost stays low and return on investment can be very high. Viral marketing is a true form of online word-of-mouth. This is one virus that I would highly recommend getting.

Online Copyright Law

Originally Published: January 2006

As the Internet grows larger by the minute, people have access to more and more information. You can now access libraries of information with the click of a button whereas in the past it took a trip to the local library and hours of perusing through volumes of texts. But as the Internet allows you to gather information in minutes, so does it allow you to copy photos, video, audio, text and other content just as easily. But just because it’s easy doesn’t mean it’s legal. In fact, copyright laws apply the same standards to the Internet and the World Wide Web as they do to offline original works. While I’m not a copyright attorney (and please check with one if you feel you may be in violation of a copyright), here are the general basic facts of online copyright law.

According to the Copyright Act of 1976, all original works are considered under copyright protection when they are put in tangible form (written, recorded, etc.). Protected works include literary, dramatic and musical works, pictorial, graphic and sculptural works, audio-visual works, sound recordings and architectural works. As of 1989, you don’t need to give notice of a copyright. Once a work is put in tangible form, copyright is implied even without notice. This means that although there may not be a copyright visible on a website, all the original content is still protected by copyright. This is always the case unless the owner of the copyright explicitly says that the work is in the public domain. If content is not indicated for the public domain, the person who holds the copyright holds exclusive rights to the content. The only limitation is the “fair use” portion of the Copyright Act.

Fair use allows a person to use a copyrighted work for criticism, comment, research and education only, but even then you can only use small portions of the work. Just as you used a quotation in a research paper in high school or college; you must give the author (regardless of what form the creative expression takes) credit for the work. If you are using the content to promote a website, a business, a cause or any sort of commerce, fair use definitely does not apply. For items published on the Web, the Copyright Act of 1976 applies. Individual Web pages, including text, graphics, visual images, music, video, news stories, electronic bulletin board messages, databases, CD-ROMs and even e-mail are copyrighted materials. If you decide to use content from a Web page or email, first you must follow the rules of fair use then you must credit the owner of the copyright. If the owner has published explicit guidelines regarding the use of his/her content, you should follow them. Even if you use content in fair use, whenever possible you should ask the owner of the copyright for permission to use the content. And, it’s always a good idea to keep a copy of your request for permission and the permission received. If you use the content for any sort of promotion, and especially if you stand to gain financially, you must get permission prior to using any content.
The following is a sample copyright statement that is fairly standard for a website:

You may browse this site for information. You acknowledge, however, that this site contains information, data, photographs, graphics and other materials that are protected by laws governing copyrights, trademarks, trade secrets, and other proprietary rights. Under no circumstances may you transfer (including, without limitation, by sale, loan, rent or lease), use, copy, reproduce, download, republish, upload, post, transmit, adapt, modify or distribute the site contents, in whole or in part, without the express prior written consent of ACME Company. The use of any of the site contents on any other website or networked computer environment is prohibited. This site is intended and directed only to residents of the United States and all advertising and claims in this site are valid only in the United States.

I recently discovered an interesting online tool to help fight against online content (text) infringement – www.copyscape.com. The Copyscape website will give you a listing of what sites have quoted your website, as well as those that have copied your content without permission. Once you visit Copyscape, all you have to do is input the website you want to search for and within seconds, you have a list of all the sites that are using your text. This is a quick and easy way to get a snapshot of who might be using your website content legally and illegally.

Online copyright law comes down to this: if you plan to use any content from the Web, including text, video, audio, photos, etc., you should assume it is copyrighted unless otherwise noted. When in doubt, ask permission prior to using the content even if you feel your use falls under the fair use guidelines. It is better to be safe than ending up in a courtroom. And yes, you can quote this article… as long as it is for educational purposes and credit is given of course.

Search Remains Hot While Video Warms Up

Originally Published: December 2005

With the cold weather outside, it’s good to turn our minds to the warm things we miss… beaches, convertible cars and search marketing. Okay, so you cannot really compare search marketing to a white sand beach, but they do have one thing in common… they are both hot. Search marketing continues to garner a larger portion of online ad budgets, and it does not show signs of slowing down anytime soon. Internet video advertising is also trying to make a name for itself and carve out a larger portion of those online ad budgets. With the growth of broadband, video ads have been springing up for some time. However, it now appears they are on the cusp of true explosive growth.

With online marketing budgets making up 56% of the total marketing budget of business-to-consumer marketers and making up 40% of the total marketing budget of business-to-business marketers, as reported by MarketingSherpa, the piece of the pie going to online marketing is getting much larger. In addition, a recent joint study by Deutsche Bank and Media Post revealed that third quarter 2005 online ad-spending rose 10% over the second quarter. 73.5% of respondents said their budgets increased and more than one third said their budgets increased by at least 11% over the previous quarter.

According to the Pew Internet & American Life Project, approximately 60 million people use search engines each day. That number equates to 41% of the Internet-using population that current use search engines on a typical day. The Project also revealed the total number of people using search engines has increased 55% from June 2004 to September 2005 from 38 million to 59 million. With nearly 60 million people using search engines each day, paid search has become a huge business. Currently, comScore Media Matrix ranks Google, Yahoo!, MSN, Ask Jeeves and AOL as the top five search engines based on the number of unique visitors.

When you combine the increase in online budgets with the continuing increase in search engine usage, you can see why paid search advertising exploded in growth in 2005. Online video ad spending is also on the rise, and 2006 should see it truly hit the ground running.

A recent study by eMarketer found Internet video ad spending will nearly triple in 2007 to $640 million from $225 million in 2005, and they predict video spending will reach $1.5 billion in 2009. This tremendous growth has been spurred by the proliferation of broadband access in homes. The year 2005 marked the first time over half of all online households connected to the Internet via high-speed access. eMarketer predicts that by early 2008 more than half of all households, not just those currently connected to the Internet, will connect via broadband. With this extended reach and the ability to use true video, marketers can use the Internet like a targeted version of TV. Marketers can pick and choose who they want to see the advertising, and the creative can have all the elements of TV (audio and video). In addition, true online video will allow marketers to blend entertainment, paid search, behavioral targeting, online brand building and online gaming into a true integrated online brand building and sales-driving campaign.

However, there are a couple downsides to paid search and video advertising, namely rising costs and increased competition. In the study by Deutsche Bank and Media Post, they found prices of search ads continue to increase at a significant rate. 58.2% of respondents reported paying more for search ads in the third quarter of 2005 than they paid in the second. In addition, two thirds of respondents said they paid more for rich media in the third quarter over the previous quarter. This rise in cost can be attributed to the fact that paid search can be easily tracked (to quickly show return on investment), it has demonstrated its effectiveness and since many advertisers have jumped into the paid search game, competition is becoming stiff for limited inventory. Click fraud is also a concern for paid search marketers, although many of the search engines have systems in place to monitor and lessen the likelihood of fraud. Similar things are happening with video advertising. As more and more marketers realize the effectiveness of the medium, and can prove it by fairly simple metrics, it is bringing about increased competition for limited space. While competition is not as fierce as it is with paid search, it is catching up quickly.

As the year 2006 begins, paid search and online video advertising are two hot items during this cold weather season. While both have their drawbacks, they are proving their effectiveness on a daily basis. As more and more marketers are shifting budgets to online (and have been for quite some time now), it is freeing up more dollars for paid search and leading edge technologies like video advertising. Now, who isn’t ready for a heat wave?

2006 Marketing Preview

Originally Published: November 2005

As the weather turns cold and our minds begin to focus on fighting traffic to get to the local WorldMart for another round of Christmas shopping, it’s time to look ahead at what 2006 might bring. 2006 is shaping up to be a very interesting year in the marketing world. The convergence of home entertainment, the growth of RFID, the increasing momentum of blogs, podcasts and mobile advertising, the continuing shift from traditional to new media and Google’s emerging dominance over everything information-related has marketers extremely excited and a just a little uneasy about what the future might bring.

Convergence of Home Entertainment
From my perspective as a consumer of all things electronic, the convergence of home entertainment is an exciting trend. It will not be long until our PC becomes the hub of home entertainment. 2006 should see the introduction of the first digital-cable-ready PC, which will turn your computer into an HD-capable cable box and becomes the nerve center of your home entertainment system. Want more proof that data, video, mobility and voice are converging? How about Cisco’s purchase of Scientific-Atlanta? As the proud renter of a Scientific-Atlanta set-top cable box and the proud owner of a Linksys (owned by Cisco) wireless router, this is huge news. It won’t be long before Cisco produces one device that includes digital cable TV capabilities, a cable modem, wireless LAN, VoIP and even high-definition TV. With a single device, users can download movies from the Internet and watch them on their televisions. With picture-in-picture, you could even surf the web while watching the Bengals game. It would mean true convergence, and it is not far away. Another example is Yahoo’s plan to stream old TV shows via the Web, and the company’s recent launch of a service that lets subscribers use the Web to schedule recordings of television shows through their TiVo digital video recorders. Forgot to record your favorite mid-morning game show? Just logon to Yahoo and set your recording. TV and the Web are slowly merging, and 2006 will see the first true steps toward visible convergence. The coming introduction of the Xbox 360 (basically a computer wrapped in a video game console box) won’t hurt either.

RFID
Around this time last year (and in this column), the easy prediction was that RFID was poised to explode onto the scene with the promise of great commercial opportunity. Radio Frequency Identification did indeed make great strides in 2005 mostly as an inventory management and control device, ensuring that products were available when and where customers required them. This technology has allowed businesses to begin to follow the product as it passes through logistical channels, from manufacturing through shipping and warehousing and onto store shelves. RFID also allows businesses to track shelf life and even identify where and when a product is purchased.

Whether you are a proponent of RFID or opposed to some aspects of it because of privacy concerns (as many consumer groups are), 2006 should see even more adoption as smaller, cheaper and more reliable devices are released. One example is NASCAR’s new tire leasing program from Goodyear. Goodyear will install RFID devices in all the tires it supplies to NASCAR under its tire leasing deal. This will allow the company to track thousands of tires throughout the season. Not only will RFID allow Goodyear to locate each and every tire, but also it will allow the company to study important data on the performance of each tire, which will potentially lead to better tire technology. As RFID technology continues to evolve, 2006 will see increased use of the devices and the data they supply. It won’t be long before marketers use RFID to very accurately and narrowly segment and target markets, identifying who purchased the product and then linking it to demographic data of the buyer to establish a profile that could then be applied to other potential buyers or market segments. RFID could be extended even further to identify where and when a product is consumed. This information could be utilized by companies to trigger end user contact to offer promotional incentives to re-purchase. Companies would be able to target customers on a truly individual basis and make product and distribution adjustments on the fly as they learn how and where their products are being purchased and consumed.

Blogs, Podcasts and Mobile Marketing
I have discussed web logs (blogs) and mobile marketing in previous columns, but they (like RFID) are worth repeating when discussing the trends of 2006. Blogs have for the most part already come of age (although we have only scratched the surface of using blogs for revenue generation), but 2006 will see mainstream adoption of podcasts and mobile marketing as well. Podcasts allow you to subscribe to a service that periodically sends an audio or video feed, which you can download and view or listen to on your computer or portable media player. Contrary to popular belief, you don’t need an iPod to use a podcasting service. Many syndicated radio shows have already begun podcasting feeds, and the technology is on the verge of exploding in popularity with the likes of the iPod itself. 2006 should see widespread use of the technology, and as it spreads, you can bet marketers will use it for precision commercial messages. As previously discussed, mobile marketing is entering into its adolescence stage. While it’s not quite mature enough to warrant large advertising budgets, its time will soon come. 2006 should bring mobile marketing into the mainstream as the public warms up to it and the technology grows up. Expect to see more text message contest entries, more ads in mobile games, use of mobile advergames, more subscription services, etc. Mobile commerce is still a good distance into the future, but mobile marketing is here.

Continuing Shift from Traditional to New Media
It is no secret that marketing dollars are being shifted from traditional media like newspapers, television, radio and magazines to new media including Web ads, pay-per-click ads, targeted emails, online and email newsletters and other forms of eMarketing. 2005 has seen explosive growth in eMarketing while newspaper and magazine ad page counts have dropped. The reason for this is simple, more and more consumers are paying attention to online media and content at the expense of traditional media. This trend, which will continue through 2006 and is here to stay, is most obvious in newspaper statistics. A recent report by the Audit Bureau of Circulations found a six-month decline in the average weekday print circulation among the top 20 U.S. newspapers. At the same time, newspaper website traffic grew by 11 percent year-over-year in October. Nielsen/NetRatings found interest in newspapers was still strong, but 22 percent of readers had shifted from offline to online sources, which was much stronger growth than the increase in Internet users as a whole, which rose 3 percent year-over-year. From these numbers, it is obvious that the trend is away from traditional media. Traditional media will not go away entirely, but as its effectiveness has declined, budgets have shifted to new media as a way to help recapture marketing message effectiveness and efficiency.

Google’s Emerging Dominance
From front-page headlines to record, skyrocketing profits, Google’s emerging dominance over all things related to information is another trend that sees no signs of slowing. Here is a snapshot of what Google has been up to lately:

- Currently the number one search engine
- Google AdWords has become a dominant form of online advertising that is garnering a significant share of advertising budgets
- Providing marketing support for the Firefox browser
- Offering free Wi-Fi
- Offering free web analytics (Google Analytics, aka Urchin)
- Trying its hand at newspaper and other off-line media buying
- Controversial Google Book Search library project promises to allow users to view the entire contents of every book not under copyright protection
- Beta test of Google Base

Firefox Marketing
Google is providing its ad publishers with a set of buttons that website visitors can use to download Firefox with the Google Toolbar. This agreement should accelerate the use of Firefox while continuing to spread the Google brand.

Google Analytics, aka Urchin
Urchin was previously offered by Google as a per-month pay service, but the company recently began offering the service free of charge. With this tool, businesses can gauge the impact of online marketing campaigns such as banner ads, referral links, newsletters and search. Businesses can also pay for more advanced integration and customization. The tool offers reporting dashboards for executives, marketers and Webmasters.

Google Base
Google’s new Google Base service lets anyone upload most anything to a publicly searchable database. This service will make locating anything that has been uploaded nearly instantaneous, provided it finds users willing to provide the content. Google Base could pose a formidable threat to traditional classified businesses such as newspapers, as well as online sites such as eBay. Google has also applied for a patent for a service called Google Automat that helps would-be sellers generate advertising and is working on an online payment system.

Google has significantly elevated its position from a search engine to a leading media and information clearinghouse. No one knows Google’s future intentions, but it is clear that 2006 will see Google continue to expand into other information-related businesses. As the company’s reach extends and as it develops other effective tools like AdWords, Google will continue to see a greater percentage of marketing budgets.

2006 is shaping up to be a very exciting year. Consumers will be able to streamline their home entertainment centers by bringing voice, data, video and mobility together, quickly and easily receive audio and video podcasts and have access more mobile content while marketers will see more effective, more efficient marketing tools hit the mainstream. While traditional media companies will feel the pinch of new media and technology, and marketers will need to continue to educate themselves on the benefits and metrics of new media, the benefits of these trends will outweigh the negatives. While not all of these trends are necessarily good for consumers (as many anti-RFID and Google haters would attest), they are all guaranteed to affect the way companies market themselves in 2006. Let’s start another trend this year: re-gifting old presents and skipping the hassle of another WorldMart trip. Who’s with me?