Seminar by Linden Dalecki, Ph.D. Delivered at the University of Porto the evening of June 2, 2010

A little about me

Copywriter in Hong Kong (loved Macau) and Washington D.C. (AppNet and Commerce One)

M.A. in RTF at U.T. Austin (2003)

Ph.D. in Advertising at U.T. Austin (2008)

Currently Asst. Prof. at Pittsburg State University [main research stream is Entertainment Marketing, particularly Hollywood and Hip-Hop]

We need to make assumptions about future (predictions)

But should proceed with cautious assumptions

“We drive into the future using only our rearview mirror.” --Marshall McLuhan

An Overview of Tonight’s Talk: The shift away from interruption

advertising Review of basic social network theory UGC and online promotion Atmospherics and retail environments One-to-one marketing circa 1993 and today Case studies in online promotion Industry trends and closing thoughts Open the floor for discussion[p.s.—will abridge video clips throughout]

The Death of the TV-Industrial Complex

Companies used to spend enormous amounts on TV advertising and the old rule was “Create safe, ordinary products and combine them with great marketing”

The new rule is “Create remarkable products that the right people seek out”

The Death of Traditional Advertising?

Yes and no . . .

Yes in the sense that a great :30 TV spot is no longer all it takes. . .

No in the sense that TV—and many other traditional advertising platforms—will survive and thrive in this new era. . .

Digital Marketers Rely on Traditional Consumer DataInternet marketing relies on traditional

consumer-profiling data:

Demographic dataPsychographic dataFinancial dataPurchase behavior dataMedia consumption data

Media Mix Changes

Digital—more dollars will move to digital as consumers continue to migrate there

Search—more and more dollars will move to search as smaller companies utilize it

Print—dollars will shift OUT of print

Out of home—OHH will increase slightly as more venues and sites added

Traditional Advertising as “Interruption Advertising”Interruption Advertising

Versus Non-Interruption Advertising

Ad content interrupts the destination content we are drawn to

Consumers have evolved ways to avoid interruption advertising [from TiVo to Adblock]

And clutter has became a major issue

Promotional content is embedded in and of a piece with destination content :

BMW ifilms Google AdWords

search results even the

classic/traditional infomercial

Ideas that Spread, Win (Seth Godin)

Ideas that spread rapidly—ideaviruses—are more likely to succeed than ideas that don’t

Sneezers are the people who launch and spread an ideavirus—finding and seducing sneezers is essential to creating an ideavirus (targeting specific niches is essential to this process)

The buzz phenomenon

Consumers are more connected than ever before, and communicate positive and negative experiences with their network of connections

Recall that hotmail.com went from 0 to 12,000,000 users in 1.5 years (each person who signed up helped recruit new members as every email from hotmail included a message touting the free service)

Network hubs hold the key People who talk obsessively re: a

brand are considered “network hubs” (sometimes referred to as “opinion leaders” “champions” “power users” or “influencers”)

1.Regular hubs2.Mega hubs3.Expert hubs

10 characteristics of networks1. Once latent networks are becoming manifest in

digital era2. People link with others like them (homophily)3. Similar people form clusters (Mac)4. Buzz spreads through common nodes5. Information gets trapped in clusters6. Network hubs and connectors create shortcuts

(heterophily)7. We talk to those around us (proximity)8. Weak ties are surprisingly strong (jobs)9. The web nurtures weak ties10. Networks go across markets

Achieving success within networks No amount of advertising will sell a poor

product—buzz is generated by the product:

1.Products that evoke emotions (Blair Witch)2.Products that promote themselves (iPod)3.Products that leave traces (hotmail)4.Products that gain utility as more people

use them (fax, email, phones)5.Products that are compatible (Palm + PC)6.Products that are easy to use (Flip HD

videocam)

Actively seed your products A “seed unit” is an actual product or a

representative sampling from the product you are trying to promote, which you place in the hands of your seed customers

[give people in multiple clusters direct experience with your product to plant the seed that stimulates discussion in multiple networks simultaneously; examples of SXSW 2007/twitter and Cannes 2010/Flip HD cam]

Six Rules about Promo and Buzz1. Keep messaging simple: short concise

messages can be passed on [“high concept”]

2. Tell what’s new3. Don’t make claims you can’t support4. Ask customers what’s special about

your product or service (if they can’t tell you, they can’t pass it on via WOM/eWOM)

5. Start measuring buzz6. Listen to the buzz

Successful Brands Which Don’t Utilize “Traditional Advertising” and do leverage Social Networks:Anchor Steam Brewing Company [perceived as

more authentic by aficionados who appreciate the lack of advertising]

Costco [programs such as Car Buyer program generates buzz via market mavens]

Monster Cable [extremely powerful retail network keeps competitors out]

Buzz in distribution channels

Monster Cable and its strong relationship with retailers [Best Buy, Guitar Center, Apple etc.]:

1.discount programs for sales reps

1. bonuses offered to top sellers [trip to San Francisco, access to the company’s fleet of sports cars, etc.]

Monster Cable’s “Beats by Dre”http://www.beatsbydre.com/[joint-venture between Monster and

Interscope and the use of an “authentic opinion leader”]

http://www.beatsbydre.com/about/about.aspx[great anecdotes re: early promotion of iPod, hip-hop

industry, piracy, audio technology, MTV, public visibility of products, opinion leadership, Eminem, Lady Gaga, YouTube, etc. “our goal is not to be used by the media, but to be the media itself”]

User Generated Content

Growth in UGC will increase due to:

1.Online social networking

2.Publishing (blogs, ebooks, ezines)

3.Sharing (YouTube snapfish, flickr, Yahoo! photos)

4.Creative expression (mashups, cell phone vids, Diet Coke + Mentos, etc.) screen:

http://www.youtube.com/watch?v=hKoB0MHVBvM

Levi’s Promotional Content Masquerading as UGC http://www.youtube.com/watch?

v=pShf2VuAu_Q

http://www.youtube.com/watch?v=1l_v1K3GwUc&feature=related

Paco Underhill

He uses similar techniques to Account Planning, and is basically a “retail and service environment anthropologist”

CEO and founder of Envirosell

Paco Underhill’s Envirosell Envirosell is a New York-headquartered research and

consulting firm specializing in studying retail and service environments

[founded by Paco Underhill in 1986]

Focus is to study “where products and people meet”—[stores, banks, restaurants, service facilities]Offices in New York, Mexico City, Sao Paulo, Milan, Bangalore and Tokyo, clients in 26 countries 

Envirosell claims to provide its clients “with tools to improve their customer’s overall experience”

Partial Envirosell Client List

Bank of AmericaCitibankLloyd’s (United Kingdom)Wells Fargo Bank 

Einstein Brothers BagelKentucky Fried ChickenMcDonald'sOlive GardenStarbucks CoffeeSubwayTaco Bell

20th Century FoxCoca-ColaEstée LauderFord Motor CompanyFrito-LayGeneral MillsHallmark CardsHewlett-PackardJohnson & JohnsonKraft FoodsMicrosoftMiller Brewing CompanyPepsiProcter & Gamble

Sony MusicTime Inc.UnileverWrigley

AdidasThe American Museum of Natural HistoryBath & Body WorksBest BuyBulgariCircuit City StoresDiscovery Channel StoresExxonMobilThe Gap (including Banana Republic and Old Navy)GodivaL.L. BeanNokiaOfficeMaxPaylessPetsmartSaksT-MobileTJX (TJMaxx)TargetTrader Joe'sUnited States Postal ServiceVerizonVirgin MobileWalgreensWalmart

Atmospherics

The study of consumer environments from a design aesthetic and theme perspective (Disney as early an innovator)

http://www.envirosell.com/index.php?option=com_content&task=view&id=230

Actionable Findings

The “butt brush” factor [placement of necktie rack near a busy

aisle]—post-adjustment sales went up “quickly and substantially”

Adults pay for dog treats[but children often drive the purchase]—

after dog treats were moved down the planogram, sales went up immediately

Little things that mean a lot

Underhill noticed teen 45-rpm record shoppers craning to see a high-placed Billboard chart

After lowering the chart, sales of 45s went up by 20%

Doorways

“We paid particular attention to the ‘doorways’—our term for any path leading into or out of an area of a store”

“Until the client knew which paths were most popular, it was impossible to make informed decisions about where to stock what, or where to place the merchandising materials meant to lure customers”

Is there an online analog for “doorways”?

What’s percentage of men, vs. women, who buy jeans after trying them on?

Men: 65%

Women: 25%

Percent of in-store purchases that are unplanned?

60 percent of in-store purchase decisions are unplanned purchases

Walmart in US and Portugal’s Xare Media:

Xare Media’s implementation of customer-tracking system that differentiates potential retail-screen viewers from actual viewers and delivers increased ROI

Walmart’s shift from old school in-store Walmart TV to new school Walmart SMART Network

Walmart TV: Old vs. New

Old Walmart TV network New SMART Network

1. Audience aggregation

2. 30 second ads

3. Single-channel CRTs

4. CPM-based pricing

1. Helping shoppers shop smarter

2. Formats designed for retail

3. Zone specific flatscreens

4. Lift-based pricing

Walmart SMART Triple Play

Walmart’s premier SMART Network ad buy is called the “triple play”, where a campaign is shown on 1) a large welcome screen at the Walmart entrance, 2) a category screen in departments and 3) endcap screens on each aisle

Impression Results for SMART?

SMART Network reports 140 million impressions per week, with a CPM of $2-4

Thus, from a GRP [gross rating point] standpoint, Walmart is the fifth largest network in the US, just behind ABC, CBS, Fox and NBC

SMART Sales Boost

Sales lift by department:Electronics : 7%Over the counter TC: 23%Food: 13%Health/beauty: 28% 

Sales lift by product type :Mature item boost: 7%Item launch: 9%Seasonal push: 18%Price leadership (items on rollback): 6%

SMART Future?

Screenmedia Expo Europe May 2010 keynote speech: “The Dawn of Dynamic Retail: How Walmart upgraded its signage network and discovered the power of customer relevance”

Focus on A) better screen placement (recall Underhill’s Billboard top-40) and B) increased relevancy [seasonality, weather, region specific factors, etc.]

What’s Playing on Walmart? in Other Senses as well. . .

Current DVD in-store sales and rental kiosks. . .

Possibility that Walmart will develop a branded entertainment content platform …

Walmart / PSU connection

Lee Scott:http://en.wikipedia.org/wiki/Lee_Scott_

%28businessman%29

Steve Scott

"The One to One Future” by Don Peppers and Martha Rogers (1993)

1. Aim for “customer share” not “market share”

2. A comparison of mass vs. 1:1 marketing

3. Learn 5 things about your customers4. Reorganize your firm for 1:1 marketing5. The customer managers take charge6. Preaching is out; dialogue is in

Aim for “customer share” not “market share”

Utilize interactive media to track individual customer transactions [example of brick-and-mortar Waldenbooks’ frequency-marketing program. . . or more obvious “recent” example of Amazon.com—remember, this piece was written in 1993]

A Comparison of Mass vs. 1:1 Marketing

Mass marketing 1:1 Marketing1. Requires product managers

selling 1 product at a time to as many customers as possible

2. Marketers try to differentiate their products

3. Marketers try to acquire a constant stream of new customers

4. Marketers concentrate on economies of scale

1. Requires customer managers who sell as many products to one customer at a time

2. Marketers seek to differentiate their customers

3. They also seek new business from current customers

4. Marketers focus on economies of scope

Learn 5 things about your customers1. Which customers are most valuable and why?

2. Which customers aren’t worth catering to at all?

3. Which customers will give generate more business via referrals?

4. Which prospects are you most likely to convert to customers?

5. What type of consumers are real prospects?

Reorganize your firm for 1:1 marketing Brand managers supported by

advertising, sales promotion and PR will need to be let go or retrained

In new firm each “marketing manager” will have a portfolio of customers with an emphasis on “individual consumer communications” rather than mass advertising

The customer managers take charge

Unlike stock market, there is no market for “customer lifetime value” yet they can and must be statistically projected and mathematically guessed (growth algorithms, etc.)

What is Google Good For?

AdWords and AdSense (good for e-POS advertising [transaction fullfilment], not so good for brand advertising)

Internationally Successful Contemporary Web Sites www.bacardi.com[50+ countries, 25 + languages, Brazil

listed, though Portugal currently is not]

www.experience159.com[designed exclusively for Alpha Romeo –

France resulted in a million hits across 100 countries, over 1,000 test drives]

Not Your Daddy’s got milk?The revamped www.gotmilk.com

website

Get the Glass Online Game:http://www.gettheglass.com/

White Gold is White Gold:http://www.youtube.com/watch?

v=5yHtDlSaoj8&feature=related

Funktube Case [Som Livre Records]

FunkTube (Brazilian UGC choreography competition—very savvy in ways that various social media are leveraged together)

http://www.youtube.com/watch?v=yecp97Bd8_U

Social Media Marketing: Greenpeace Brazil

Social Marketing: Greenpeace: Trangênicos spot in Brazil: http://www.youtube.com/watch?v=mqYqwT6KRZM

and GreenTube (Brazil): http://www.youtube.com/watch?v=AKLcUbvCxHw http://www.youtube.com/watch?v=AZyXHOw-A08

Dominos revamped website

www.dominos.com order fulfillment site

[“113 quintillion pizza variations possible”]

Diesel’s Online Efforts

Style Lounge – Diesel Online Store:http://www.neue-digitale.de/projects/

diesel_stylelounge/

Diesel’s “the Heidies” http://www.heidies.com/

google : "safe for work" diesel [20 million + total YouTube views]

Sprint NOW Dashboard:

http://now.sprint.com/nownetwork/

[developed by Goodby, Silverstein & Partners]

Window’s Vista “Clairification”: Hip by Association

Microsoft “Clearification” campaign for Window’s Vista w. Demetri Martin (use of UGC sites such as YouTube, Google Video, MSN, AtomFilms, iFilm, Revver, etc.)

http://www.youtube.com/watch?v=h4b2QNnVrY0

Coke Zero + Mentos “rocket car”

http://www.youtube.com/watch?v=-EK09QvK4Fc&feature=related

How do big firms track online discussion re: their brands ?

Netvibes [“dashboard everything”]http://www.netvibes.com/Netvibes now touts the following to

marketing enterprises:• Brand Monitoring – “Track clients, customers and

competitors across hundreds of media sources all in one place”

• E-Reputation Management – “Visualize real-time Twitter conversations and social activity feeds, and track new trending topics with drag-and-follow smart widgets”

•Product Marketing – “Create fully interactive product microsites in minutes”

Methodoligical Claims by Neilsen BuzzMetrics“Nielsen uncovers and integrates data-driven

insights culled from nearly 100 million blogs,

social networks, groups, boards and other

consumer-generated media platforms.”

“Nielsen methodology employs:

A robust harvesting system that pulls data

from a range of online media sources.

Complete data control for delivering real-time

measurement and analysis.

Optimal mix of vertical industry knowledge and social media expertise.

Balanced investment in text-mining, analytic technologies and expert analysts.”

Nielsen BuzzMetrics[Brand Association Map]

Hot Digital Marketing Areas Social media marketing synergy (plug-

ins that tweet your new blog posts, embedded YouTube videos, blog with TweetMeme buttons, etc.)

Flip HD, Qik and social-media video Mobile marketing and mobile apps Mobile Analytics (DoubleClick) Geosocial Networking (Foursquare and

Gowalla) Micro-payment content-licensing models

3 Predictions re: Ad-driven Content ModelProliferation of both:

A) blended promotion/content (where the content is the promotion and vice-versa)

B) a return to the bookended “brought to you by ____ soap” model

C) a blending of A and B (Ford in 24)

A Few Closing Thoughts

In the future, advertising alone may not support premium content

Free-mium (“free is always matched with paid”)—give away A to sell B (Anderson—“If you get freemium right, you don’t have to buy ads”)

From Broadcast to thinslice Narrowcasting [increases relevance to consumer]:

Destination sites will lose audiences to fragmentation (driving the need for continuous improvement in aggregation and analytics)

From: Reach and Frequency

To: Relevance, Reach and Frequency. . .

Obrigado!

Let’s open up the floor for discussion…