Tag Archives: online marketing

MetLife’s new ad, featuring Schroeder, is more than just a rich banner – it’s an interactive experience and game that encourages the user to play the keyboard to help Schroeder successfully play a mini concerto in what looks like Carnegie Hall. It’s a brilliant way to engage with users and keep their attention for more than a split second, and the scoring and social sharing ensured this unique experience went viral.

You can view a video of how the ad works here:

This is easily one of the best banner ad executions since the I’m a Mac banners that also ran on the NY Times home page. It must be the high dollar cost of the ad placement on nytimes.com that brings out the best in banner creative.

If you missed the ad, you can play the game on Facebook, or catch it on March 1st on People.com.

 

Brilliant MetLife Ad

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Groupon is Not a Marketing Strategy

Groupon logo.

Image via Wikipedia

Groupon‘s UK Managing Director Chris Muhr opined today that the reason Google would want to purchase Groupon was because Groupon has “…something that Google does not have and no one else has and that we have really tapped a new market,” but is it really a new market or have the just tapped into the greed and laziness of businesses who long for days of old media? I think it’s the later, which is why the idea of Groupon is at once appealing and dangerous to small businesses and brands all over. But first a bit of background.

How Groupon Works - Groupon highlights one business in each city every day with a sale that’s too good to pass up. (They also have “side deals” and Groupon Stores, but we’ll focus on the main deal here.) Usually 50% or more off retail price of a service or item. They like to focus on a price range that makes the item easily bought on impulse and guide businesses to try to stay under $50 for the best results. So if you sell wine for $30 a bottle they’ll want you to offer it for $12-$15 on Groupon. Then Groupon takes 50% of every transaction successfully processed through the offer. So to continue the example, if you sell wine for $30 regularly, you’ll put in on Groupon at $12 and you’ll end up with $6 per bottle sold. They’ll also set a tipping point for the deal to be activated (the “group”” in Groupon) and will also let you cap your deal at a certain amount of sales. It’s pretty easy to see that if you don’t have much margin built into your product, you’ll be in the red on every sale, depending on how you structure your Groupon. And if you can give up 75% of revenue and still make a profit, it’s likely going to be a very small one, which means you need to sell a lot of units to make any money.

So, then why does a business use Groupon? Businesses use Groupon because they can drive a large number of visitors to a store location with a single event. They hope that the new customers reached by Groupon will buy additional items above what is advertised (if you’re losing money on your Groupon this is considered a “loss leader” strategy,) and/or you hope that they become loyal customers that come back. But I also think they use Groupon because they’re lazy. That’s right. Lazy. And here’s why.

Groupon works a lot like a newspaper ad used to. You find the biggest circulation possible, you make an appealing offer and you hope that you get customers that will come in and like your business. It’s the old “spray and pray” model of marketing that worked so well in the days of mass production and mass consumption. Get it in front of them and they will buy. It takes little thought, little effort. It doesn’t take cultivating relationships, building a brand or finding customers who really need your service. It’s the laziest form of marketing out there.

If you’re a business you have four critical attributes that help drive sales: your brand, your prices, your awareness level and your location. There are of course many more; but let’s look at these four for a moment.

Your Brand – If you have a strong, growing brand, you don’t need Groupon. Your brand drives customers, customer loyalty, word of mouth marketing and strong margins. You can charge more, spend less on advertising and focus on growing your brand through unique experiences and high quality products. It’s a virtuous cycle, but one which few companies get into and fewer still that can maintain it.

Your Prices - If you don’t have a strong brand but you have incredibly low prices then you’ve defined yourself as the low cost leader, you’re first in the race to the bottom and you know you’ll live a life of low margins and need to move a lot of units to make up for it. You also aren’t ideal for Groupon because you probably have a brand associated with being the low cost leader, and Groupon’s pricing structure doesn’t work well in a low margin world (as outlined above.) If you’re priced in the middle of the market you really don’t have a lever for sales on prices because customers can go to the low cost leader.

Your Awareness Level – Among your customer base your awareness level is what drives repeat visits, word of mouth and new customer acquisition. If you have great awareness, if everyone knows that you’re the only 24 hour locksmith or the only tux rental place in town then you’ve got great awareness. If you’re one of 12 women’s clothing stores, like a Chico’s in a strip mall somewhere, you’re awareness level isn’t great. Groupon starts to sound like a good idea here.

Your Location - Unless you’re a virtual retailer with a strong ecommerce presence, you’re really limited to the surrounding area for your customers. How far they’re willing to travel to get to you is a function of all three above. Groupon makes sense here too.

So if you’re a middling business with little or no brand, little or no price differentiation, and a fixed customer base that is more or less only growing with the population in your area, then you have only a few levers to pull to make your business go. You can go about the hard work of building a brand in your community. Connecting with core customers, building word of mouth by creating an amazing experience, or demonstrating expertise above and beyond the competition. Or you can cut your prices, be the unbeatable low cost leader and price match anyone else. People know that they’ll get the lowest price from you and that goes a long way. Or you can increase your awareness by advertising, sponsoring events, etc. Or you can open more locations, a capital intensive process that may or may not work for your business.

Or, you can Groupon. Because with Groupon you don’t need to do any of that. You just spray and pray. Cut the prices on an item and let Groupon do the rest. But is that really it? Do the customers come back? Do the customers care that you exist? Do the customers remember who you are and where to go the next time they need something you provide? There are plenty of Groupon disaster examples on the Web that say “No.” Because without thoughtful marketing in place, Groupon is just a flash in the pan.

In the PR trade they say “Getting on TechCrunch is not a PR strategy.” I say “Getting on Groupon is not a marketing strategy.” And it’s where I think Chris Muhr is wrong. Google provides the savvy, thoughtful marketer a lot more than Groupon ever could. It provides the people willing to invest in their brand, their customer experience and their awareness with an avenue to showcase their business to people actually looking for them, not just people looking for a rock-bottom deal.

This goes for big brands as well as small businesses. If your brand is flagging, and you’re undifferentiated among your competitors Groupon is not going to solve your woes. It doesn’t matter how many gift cards you sell if you can’t convert those customers into repeat customers and advocates of your brand. And if you don’t fundamentally change your brand and the customer experience then Groupon will be nothing more than crack for your marketing department. Because each time you run a Groupon you’re high will be a little less than the last time and your hangover will be a little worse. For every Groupon you run, you dilute your brand a little bit. Do it once and it’s a marketing stunt. Do it over and over and you begin to redefine the value of your product or service. You hurt your brand and any differentiation you had. You’ve chosen the low cost leader, commodity approach. Prepare to accept the consequences.

So can Groupon work? Absolutely. Is it the right answer? Maybe once. Is it a strategy? Absolutely not. Is it easy? Too easy. Small businesses and big brands should focus on reengineering their customer experience from the web site to the warranty service. And when that is done then, maybe, it’ll be time to shout it to the world with Groupon. But more likely, the people that have been blown away by the change in your service will have already told the people you want to reach. Don’t be lazy. Do your job. Your brand and your bottom line will thank you.

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We Spend Almost Half Our Time Looking at Content Online

A cool infographic on what we do and how we spend our time online.  If we spend half our time looking at content and only 22% of our time on social networks it seems like as marketers we should be focused more on creating great content and less time trolling socnets for business leads.  IMO.

how we spend our time online

via: How the World Spends Its Time Online [Infographic].

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Viral Video – Motorola Android Phone Solves Rubik’s Cube

Motorola Rubik

This video of a Motorola phone solving a Rubik’s cube has everything you could want in a viral video: surprise, cool tech, something remarkable and Lego robots.  They say there isn’t a recipe for viral video, and I agree, but the combination of the above is about as close as it gets.

Also, Google products have been on a roll with the viral videos lately. In addition to this one there’s Search Stories and the Chrome speed test.  Three for three.

Enjoy the video:

Search Stories:

The Google Chrome Speed Test:

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What’s the problem?

As a marketer you always need to be asking yourself “What’s the problem my [product/service/company] is trying to solve for the customer?” This is the simplest, easiest way to figure out the best way to talk about what you do in terms of providing a solution for your customers. It’s easy to look at your product and say it solves whatever is the opposite of what it does. But that is company-centric thinking, not customer-centric. You need to solve a real problem from the customer perspective, not just a problem that that matches up perfectly with your product/service. Stop short of identifying that and you’ll be trying to identify where all of your sales are.

But not every product or service solves a problem you say? You point to the iPod and say that it was just a well designed gadget. You point to Starbucks and say that it was just an overpriced cup of coffee. I say you aren’t looking hard enough. The iPod serves a very real problem brought on by the digital music revolution. It elegantly solved the problem of purchasing and managing music from your computer to your MP3 player. Starbucks solved the problem of making people feel connected to one another and their community. They solved the problem of a communal meeting area where people were free to lounge, converse and share experiences over coffee.

Both were problems that aren’t easily visible. Both probably aren’t the first problem that come to mind. And that is the second challenge.

The problem Starbucks solved wasn’t that there wasn’t any good coffee out there. If they just went after that one they would’ve found themselves in a commodity industry, fighting with Dunkin’ Donuts over the cheapest mega-sized coffee they could offer. Instead, they solved something much more important and were rewarded because of it.

As a marketer you have to dig for the essence of the problem you’re trying to solve. Often times your customers can’t even consciously identify the problem, but when they see the solution they know they needed it all along. And some problems they don’t even know they have at all until you present it in a way that grabs their attention and spurs them to action to resolving this suddenly very real problem.

So what is the problem your product or service solves? And is it really what it seems to be at first blush, or can you dig deeper and get to something much more profound and important. Because without a problem, there is no need. And without a need you severely cripple the demand for whatever you’re selling.

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The Problem with Minimum Viable Product

If you work in the online space long enough you run across the idea of “minimum viable product” (MVP).  The MVP is the minimum product design/functionality that you can launch with that will give you the learning you need about your customers with the least amount of time and resources poured into the project. It’s an important concept that stresses speed to market, agile development, and iteration on the  learnings to build toward your ideal product.

Eric Ries (who I can’t recommend reading enough) has an excellent description of the MVP:

The idea of minimum viable product is useful because you can basically say: our vision is to build a product that solves this core problem for customers and we think that for the people who are early adopters for this kind of solution, they will be the most forgiving. And they will fill in their minds the features that aren’t quite there if we give them the core, tent-pole features that point the direction of where we’re trying to go.

So, the minimum viable product is that product which has just those features (and no more) that allows you to ship a product that resonates with early adopters; some of whom will pay you money or give you feedback.

The problem with the MVP is that too often companies launch the MVP and then don’t build the roadmap to come back and take it to the next level.  The business demands leave you with a string of unfinished, unpolished products. And while they meet the basic requirements of the early adpoting users they hamstring you trying to jump the chasm to the mainstream audience.

If you don’t have a road map in place to come back and continue to iterate on your MVPs you create a series of unpolished products which stop meeting the demands of your audience as more people outside the early adopting crowd try your product or service.

As you’re running you end up with an island of misfit toys which ultimately frustrate your customers.

While the MVP is a great concept, and keeps you from waiting too long to launch (and overdesigning for a non-existent audience) it can come back to bite you if you don’t consciously build a road map to improve it after the launch.    So if you’re launching a new online service or product and you’re using the MVP approach do you have the time line, road map and resources lined up to take it to the next level once you learn what your customers really want?

More on the MVP here, here, and here.

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The difference between ad:tech and Blogworld

I’m at ad:tech this week.  I just spent the last 10+ hours in a booth talking to people about online advertising.  All the big online agencies are here, WPP, Digitas, TribalDDB, etc. etc.  The big online players are here too, Facebook, Google, Yahoo!, etc. etc.  And I’m here.  A couple of weeks off of my trip to BlogWorld and New Media Expo.  And to be honest, I might as well be on another planet.  If BlogWorld represents the latest in social media and where the internet is going, ad:tech represents Web 1.0 and its desire to cling on to its cash cow with white knuckles.

The event is so amazingly different that I wanted to share with you some of the drastic differences that I noticed while grinding out a day at the booth.

Foursquare: When I checked in on Foursquare at BlogWorld there were nearly 50 people checked in, and it remained that way over the course of 2+ days.  Fatburger had a special offer running on the service for free burger samples.  When I checked in at ad:tech there were a whopping 7 people checked in and none of the exhibitors were running any type of Foursquare promotion.  Since ad:tech is at least 4 or 5 times the size of BlogWorld I’d call that a vote of no confidence for the hottest location-based social network.

Twitter: I was very conscious of the stream at #bwe09 and have been monitoring #adtechny and #adtech in the stream to see if I could glean anything off of what is happening here at ad:tech.  The streams are completely different.  BlogWorld was a river of quotes, nuggets of information from panels, information and feedback from sessions and crowd feedback as they interacted with panels.  People using it to connect and meet up.  ad:tech?  None of that. Just promotional tweets from companies trying to drive traffic to their booths.  (Disclosure, we did it too.) Sessions weren’t tweeted, no one was quoted in the tweets. No one challenged speakers and ideas via the Twitter feed.  Nothing.  It was simply a bullhorn for brands looking for foot traffic.

The Schedule: Social media is not the core of the agenda.  It’s a tangential.  It’s a channel to push advertising through.  It’s all about how to monetize eyeballs. Nothing about conversation, nothing about connecting as people – all about how to spend ad dollars there effectively as a brand.  Even Facebook is here with the tag line “reach people before they start searching” [for the competition on Google].  Social isn’t about a new way of connecting with a community here – it’s another arm on the wheel of digital strategy where people are trying to find a way to throw dollars at it while justifying it to their clients.

The Money: The one thing that is here that wasn’t necessarily at Blogworld is the money.  The money is definitely here.  The ad buyers, the strategists, the big agencies that represent the Fortune 10 brands with multi-million dollar online budgets are here.  You don’t see them at Blogworld.  We started to see some more big brands at Blogworld with Ford and Bud Light; but those two sponsors are just two of a constellation of hundreds here.

What this means?

The people that control the money have yet to make the leap.  They’re still 1.0.  I’d argue that most of the industry is still 1.0.  It’s all ad networks, pay-per-something-or-other business models all about driving traffic, reach and views.  Things like loyalty, engagement and reaching a passionate community are all secondary to the traditional metrics, and social is just another channel to throw ad dollars at to maximize impressions and reach of traditional media campaigns.

It’s eye-opening to me, as someone who embraces the new media and social marketing community to the fullest to see how far behind the money and the people really are.  The people talking here aren’t talking about human connections and building lasting relationships between companies and people, they’re talking about how to extend banner networks to socnets.

It’s a different mind set.  It’s an old mind set.  It’s a scary mind set when you consider how many millions of dollars are managed by these people.

My Challenge to ad:tech

It’s time to start listening.  It’s time to bring in some of the social media people who are on the bleeding edge and really learn.  Stop thinking of social media as just another avenue for your media buyer/traffic department to spend ad dollars at and start thinking about what it means for your clients, what it means to how your brand interacts with real people online.

There are real people out there, who given the chance and a good reason will do the work of your ad dollars.  Tell your clients to spend their money differently, to think about their customers differently, and to figure out ways to delight their customers rather than simply finding the next sucker.

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If you’re a small business about to make the social media leap…

Here are a handful of things that I’d do right away.

Give yourself some time to do it well.  Everything is fairly easy, except for the blog.  Writing blog content takes time, is not easy at first, and of course has some of the best potential of any of the items above.

Once you’ve done that you should make it a regular habit to do the following:

  • Watch Google Alerts that mention your business and also check your Yelp! page.  If someone is talking about you, feel free to respond in an honest, open, friendly manner.  Build relationships.
  • Tell your friends and family about your new social media presence.  Ask them to follow and Fan you.
  • Find people that are interesting to you on Twitter through directories like WeFollow and by conducting searches about your local area or areas of interest using search.twitter.com. Follow them.
  • Start talking to them. Not pitching, not selling, but talking.
  • Feel free to provide special offers to your Facebook, Twitter or Yelp fans. Check out Luna Park’s Twitter feed for an idea on that.

There’s lots more to do; but remember, you can start small. You can make mistakes as long as they are with good intentions and you work to correct them quickly and earnestly.  Get out there and try a few things. See what works for you. Stick with it.

I’ll have more on this in future posts – stay tuned!

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