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The 2011 Digital Outlook


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A comprehensive report on emerging technologies and best practices for brands. CMOs and brand leaders will find creative digital strategies to drive growth in the year ahead. …

A comprehensive report on emerging technologies and best practices for brands. CMOs and brand leaders will find creative digital strategies to drive growth in the year ahead.

Technologies and platforms include mobile and location-based marketing, owned-media channels, online coupons, interactive TV, apps, virtual goods, gaming, augmented reality, social analytics and measurement.

Best practices and market insights include the foundations of digital success, defined brand behaviors within social channels, creativity in the era of co-creation, brand storytelling, crowdsourcing, retail convergence, consumer narcissism, privacy regulations, social coding of sophisticated teens and behavioral marketing.

Read exclusive interviews with some of the tech community’s most-watched start-ups: Figment, PlacePunch, GetGlue, Crimson Hexagon and BlueCava.

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  • 1. 1 Digital Outlook THE ENGAUGE 2011
  • 2. Digital Outlook THE ENGAUGE 2011 © 2011 Engauge. All rights reserved.
  • 3. 01 Create creativity in the era of co-creation | 06 shaping the conversation | 09 02 Innovate mobile | 26 location-based marketing | 32 storytelling | 11 loyalty and action | 40 start-up: figment | 14 start-up: placepunch | 48 courting the crowd: best practices | 16 gaming | 52 the power of play | 18 interactive tv | 62 the content play | 20 start-up: getglue | 70 augmented reality | 76 03 Relate a nation of narcissists | 82 04conclusion | 118 foundations of digital success | 120 social coding | 86 photography credits | 123 metrics and analytics | 92 best practices | 100 start-up: crimson hexagon | 102 consumer trust | 104 start-up: blue cava | 114
  • 4. Foreword The merger of creativity and technology is no longer an inspiring this cultural shift in social norms comes improved metrics and social idea, but the new imperative. As social media becomes the dominant intelligence analytics, providing compelling evidence of what many of channel of consumer engagement, brands now connect personally us have known intuitively: digital marketing can be a powerful driver with people. And consumers reach out to companies. Daily. of brand perception, consumer motivation and, ultimately, the bottom line for companies. There’s a new relationship to navigate. Fortunately, effective strategies and creative digital tools for driving As marketing strategies rapidly mature along with technology, so growth are now available to every marketer. You—right now—can will the two-way conversations between brands and people. Today’s help lead your company’s marketing efforts as a source of consumers determine when and where they connect with brands, and encouragement and empowerment. That’s the essential message of they expect brands to be available at all times, present in all places our 2011 Digital Outlook. Transformation isn’t a passive proposition. and accessible through every channel. At the same time, they’re also It requires a focus on doing. The actions of strategic digital marketing sharing incredible details about their lives, tastes and desires. With are clear: Create. Innovate. Relate.
  • 5. 3 READ RICK’S BLOG: RICKMILENTHAL.COM CREATE: Develop transformational ideas that connect brands and people. INNOVATE: Move beyond the ordinary and do what’s never been done before. RELATE: Create real meaning in the lives of consumers and growth for your brand. Will you join us? Rick Milenthal, CEO
  • 6. Develop transformational ideas that connect brands and people. 01 SECTION Create
  • 7. 5
  • 8. 6 01 SECTION Create CreativityCo-Creation in the Era of The mandate is a seemingly impossible one: The question today is: how do you Reconcile the many disparate voices—shouts keep your brand from becoming an How to Build a from fans and friends, cranks and creatives— into something unified and intelligible, exquisite corpse? Coherent Brand something of real value to brand perception and equity. It’s a directive born of the singular Brand narratives are increasingly complex and composed of many voices. Smart Narrative brand lesson of social media: Marketing is made by all, not by one. Brand messages, now brands accept this new reality. Creatives can’t just sit down at their desks and dictate. co-scripted by the masses, can’t be controlled More than ever before, brands must plug like before. So what are the odds that they’re directly into the collective conversation competitively positioned and strategically and imagination to discover what grabs relevant? Or even coherent? and goes viral, what sways and makes us swoon, what will sit on shelves and what will Indulge the comparison. The collaborative sell. This is not a time to despair, though. writing game “exquisite corpse” was played This is not some doomsday denouement 70% by Surrealist Parisian poets of the 1920s. It brand marketers should fear. Rather, this required each player to successively contribute populist movement toward co-creation, co- a random word and create a sentence. The conversation and even co-invention reflects Fully 70% of executives game earned its memorable name from one an incredible resource of creativity and surveyed said their companies reaped value from online of the first mystifying lines: “The exquisite energy for brands. Embraced strategically, communities, but only a corpse will drink the new wine.” If that sounds the bottom-up contributions of the masses select few are achieving the like some of the comments on your brand’s are ushering in a new era of creativity. maximum benefit. Facebook page...
  • 9. 7 Embraced strategically, the bottom-up contributions of the masses are ushering in a new era of creativity. The Fan-based Business Model Local Motors is a global network of over 5,000 designers intent on building their own cars. Threadless is a crowdsourcing apparel merchandiser whose online community chooses which user-generated T-shirt designs are included in its fast-evolving fashion line. The business model of this new world is open source, fan-based and bolstered by grassroots support that can spread across the web like wildfire. Yet the potential for meaningful co- 10K creation is hardly limited to DIY disrupters and up-and-coming start-ups. Leading customer-centric companies from Starbucks On a typical day, the to Chick-fil-A have proven that business biggest brands each value—better service, better products, better spark 10,000 or more marketing—can be collaboratively created comments on social with direct cooperation from and conversation networks like Twitter, with consumers. They have succeeded in Facebook and YouTube. creating, fostering and continually improving online communities that deepen engagement and then pipe external insights to executives, designers and decision-makers.
  • 10. 9 Shaping the Conversation Focusing Broad Insights to Create Brand Equity Marketing messages don’t write themselves, that solicits the top solution. A highly not even with a broad array of social inputs. qualified field of contributors competed for Innovative products don’t simply materialize the million-dollar Netflix prize, awarded to out of the online either. And new services the team that most improved the algorithm don’t automatically launch just because used to recommend movies to customers somebody posted a terrific suggestion on based on their viewing preferences. Though your website. Heed the black holes: Among costly, the online challenge significantly 6% the numerous online suggestion systems strengthened Netflix’s competitive edge. rolled out in recent years, many imploded the moment the marketing department realized It’s an elegant model, a simple and Companies committed less it lacked the resources to review—much less powerful prism. Take a wide spectrum of than 6% of marketing spend the desire to respond to—a daily deluge of public inputs (consumers and active users), to social media in 2010, even comments from consumers. refine the focus (solicit ideas on a specific though American consumers issue) and then sort suggestions with an now spend about as much One solution was pioneered by Netflix: Ask efficient (algorithmic or vote-ranked) filter to time on the Internet as they a narrow question about a specific problem, ultimately identify the ideas with the highest do watching TV. then create a contest with cash incentives concentrated value.
  • 11. 10 Learning from Missteps Finding the Right Connection Within Online Communities at Starbucks Virtual labs, beta testing, custom modding, Indeed, fewer than half (42%) of financial Over 60,000 suggestions for new products brand ambassadors—choosing the right co- services firms that maintain a presence on have been submitted to the My Starbucks creation approach and platform depends on Twitter and Facebook reply to users’ posts Idea site since 2008, but many are based on the problem you need to solve. New product and comments, according to Forrester individual tastes and preferences. (A recent development? Charles Schwab learned early Research. Yet nearly two-thirds of all financial example: “Offer a skinny pumpkin spice on to listen to online communities and, in services firms maintain a presence on such latte!”) Accordingly, the site is awash with the process, discovered that underserved sites. So why do the rest of them bother? ideas that are strategically irrelevant for the Gen-X investors needed a new series of Why do companies invite consumers if company. high-yield checking accounts. What about they’re not going to show up themselves? customer experience? Comcast and AT&T To succeed, marketers must choose the So in its 2010 betacup challenge, Starbucks trawl for insights far beyond the corporate right channels, ask the right questions, learn changed its tactics. Borrowing from the firewall, deploying social media teams for to listen perceptively and provide frequent Netflix model, they focused their fans customer care that monitor chatter on social feedback. This keeps brand constituents on a problem that had proven internally networks like Twitter, Facebook and YouTube active, satisfied and engaged. None of vexing—how to reduce environmental and proactively contact (and try to help) the this is necessarily easy—not the first time waste from paper cups, a high-priority goal haters and complainers. or the second or the third—and, given the for Starbucks’ corporate responsibility. The rapid rate of technological change, even $20,000 contest drew 430 submissions, 5,000 The takeaway: Communities don’t run the top-performing social campaigns must ratings and 13,000 comments. The award- on autopilot. Even though fully 70% of continually evolve. winner, Karma Cup, recommended giving a executives surveyed by McKinsey said 42% free cup of coffee to every tenth customer their companies reaped value from online who carries their own reusable mug. In this communities, only a select few are achieving case, the positive PR from an estimated 10 the maximum benefit. Social media million media impressions may actually be marketing isn’t some automatic, hands-free, Only 42% of financial services worth more than the award-winning idea, but self-propelled phenomenon. It’s a discipline. firms that maintain a presence both are valid components of added value. It requires resources and commitment. on Twitter and Facebook reply to users’ posts and comments.
  • 12. Storytelling Radically Revising the Brand Narrative Brands can’t keep pitching the same kinds stage, they’ve got lines of their own and of top-down narratives. Stories, and the way they demand to be heard. They have, in we tell them, have changed dramatically. fact, the final word. It’s a shift in power No, thankfully, it’s not Surrealist poetry. that instead of diminishing the impact It’s more like a classic Greek play with a of creative advertising makes it all the chorus of followers on Facebook and Twitter more relevant and critical to brand and providing commentary and feedback on the marketing success. main protagonist—the brand. The challenge facing marketing departments and agencies Online communities and co-creation is deciding whether it’ll be a tragedy or a can produce a broad array of benefits— comedy. Though American consumers now deeper understanding of customer spend about as much time on the Internet needs, desires and demographics; better as they do watching TV—and, when online, messaging and brand engagement; new they spend twice as much time on social ideas for services and innovative products; networking sites than any other activity— novel fixes to persistent problems; and companies committed less than 6% of fresh content that is culturally relevant marketing spend to social media in 2010. and continually evolving. Done right, co-creation can benefit both consumers Bottom line, in today’s ad campaigns, and and producers. in today’s culture, the brand is no longer the only hero. The audience has become the cast and chorus—they’ve climbed on
  • 13. Q POINT OF VIEW What is the role of creativity for brands today? Welcome to the democratization of creativity. What do I mean? Well, let’s go back—starting a few centuries to a few years ago. Creativity was, by its nature, elitist, owned by few and awed by many. In order to create, you needed tools, a location and resources, not merely talent. The prohibitive costs and time commitments relegated creativity to those with the capacity to pursue it—the funded painters vibrancy of reality. It chose dialogue over monologue. The opinion of a teenager from Antioch, Wisconsin became as valuable as the postulates of a tenured Harvard professor. Anything was possible, and the unexpected became the expectation. Emotion hijacked logic. It was no longer necessary for logic paths and poets, the industry-backed musicians and filmmakers. to move rigidly from awareness to persuasion. No, it was marketing anarchy where the targeted audience usurped brand positioning right It was no different in business. Ad agencies possessed all the time, from the hands of unsuspecting marketers. tools and talent to create. Consumers sat back passively and watched or listened. Because agencies, bankrolled by marketers, could afford Now, what consumers say—in blogs and microblogs, on social to create the message, we had control. We owned the influence; we networks, in email chains, on socialized sites and video sharing commanded the mediums. We held all the creative cards. platforms—is the voice of your brand. And it can change in a nanosecond without rhyme or reason. Like it or not, this is the new Then technology came along and reshuffled the deck completely. world of creative influence. In the hands of the many, the voice of creativity changed. Its tone became collaborative. It eschewed production polish for the Some brands will resist, some will reluctantly accede. But those brands
  • 14. 13 Mike Bednar chief creative officer READ MIKE’S BLOG: ENGAUGECREATIVITY.COM that not only embrace but also join their new creators will triumph. Here’s the secret to why: Brand positioning, by its very nature, is emotional. Its foundations are, and have always been, built on constantly shifting sands. Perception is reality. And consumers have always held the ultimate control— they’ve either believed or they haven’t. They’ve created images of brands in their own minds. Now they simply have the ability to create the outward- facing image. Consumers accept the creative messages of other consumers more readily than from marketers. So give them the tools to create, unleash experiences and invite them in. Let them influence your brand’s direction, not the other way around. Trust them to know as much about themselves as your precious research does. Allow them to disagree, to argue—at least they’re talking. Create two-way content; share everything you have—without hesitation. Their creativity is limitless and infinitely effective. When it’s built around your brand, it becomes the most powerful marketing tool any brand could possess.
  • 15. Start-up to Watch The Social Network Teens for Literary Can Figment redefine the book market? Within five days of going live in December, media-sharing sites. More than a million drew 10,000 registered users. titles have been published, some even The social network for the literary teen catapulted to the top ranks of Japanese allows for sharing, reading and reviewing of literary bestsellers. “The first literary genre original works across all genres, from fiction to emerge from the cellular age,” is how to memoir. Figment co-founder Dana Goodyear dubbed the movement. Founded by two veterans of The New Yorker, Figment is an attempt to translate Before launching the site, Ms. Goodyear A conversation with CEO and for American audiences the Japanese and Jacob Lewis, the site’s co-founder, spent Co-founder Jacob Lewis. pop-culture phenomenon of the cell phone several months visiting schools, libraries and novel—a breakout category of romance literary organizations across the country to and fantasy fiction written by young women speak with teenagers, recruiting them to on their mobiles and initially appearing on participate in a beta version.
  • 16. 15 Q: You attracted 10,000 members in the first five days. and shared. It’s not being done with the full participation of What’s the appeal? readers and authors together. We think publishers will be able to discover heuristic information about how people are reading, A: It’s an inviting space as a reader, not just as a writer. There are which could help them make decisions about what to publish books on the shelf that you might want to read—a story by in the future. These really are the future readers and they’re a your friend or a novel that just came out from a major publisher. group that publishers have never had access to. Publishing has Putting those in the same place is important, because kids today a very bad hit rate. They lose out on 70% of their books. I think don’t draw a line between their own creativity and the stuff they we could have an impact on their performance. find in a bookstore. Q: What about advertising? Q: Do teens have fundamentally different expectations about reading and writing? A: Right now, we offer an integrated marketing platform for publishers to market individual titles to users of the site. There A: When I was 17, I wrote a letter to Philip Roth. He didn’t write are no banner ads, but we can facilitate ads within the pages back. Not surprising, really. Back then there was no expectation of the book excerpts—interstitial disruptive ads that appear on that a well-known author would respond to readers. That’s not the pages. So far, we have deals with eight to ten publishers. true now. There’s been a fundamental shift. When kids today We’re also very interested in looking into brand marketing. We interact with the authors they love, they expect a response. believe that brands that truly want to understand the millennial They demand a response. Reading isn’t a passive experience generation will come because of the activity level on the site. for them; it’s a social one. People want to participate. They’re writing things, reading things, sharing things. We think that Q: What did you learn from talking to teenagers during the six- experience could redefine the marketplace for books. month closed beta stage? Q: What’s the response from publishers? A: We were holding our breath for six months—spending time and money to watch and learn from these kids. But we would have A: As bookstores die and content goes digital, publishers are trying failed without it. A lot of the things we built, initially, were not very to find new ways to market themselves. Publishers are very wary useful. We’d built a lot of clichéd social networking tools—letting about eBooks. But there’s a deeper and more fundamental visitors “friend” somebody, creating a “wall” for comments. You problem with publishing, about the way content is created learn very quickly you’re never going to replace Facebook.
  • 17. 01 SECTION Create Courting the Crowd Best Practices for Brand Communities and Co-Creation 68M bloggers regularly review and recommend products and services. Who are your lead users, innovators and market mavens?
  • 18. 17 Brands are constantly discovering new ways to tap into the creative power of the crowd, but consider these best practices: STACK THE INVITE LIST. Leading SOLICIT FOR A SPECIFIC STRATEGIC DON’T CONFUSE MARKETING companies conduct up-front research INTEREST. Shape the conversation. GIMMICKS with consumer to identify key influencers in their category, Let consumers know where their ideas are engagement. Brand communities are not the to preselect a group of core participants who needed most. place for a one-way conversation. Nobody are likely to get engaged early and remain wants a social site that sanitizes all negative active over the long term. Among the 68 SEEK BUSINESS VALUE BEYOND comments. You’ve got to go way beyond million bloggers who regularly review and THE BUZZ. Letting consumers slogans and marketing collateral. Even some recommend products and services, who vote on the best ideas can help automate of the most marketing-astute brands have are your lead users, innovators and market the review process and reduce costs. But made these mistakes in the past only to mavens? And how many of them happen to consumers are not always privy to your experience a consumer backlash. already be loyal customers? business objectives—other analytics are needed to evaluate business potential. One EXIT YOUR COMFORT ZONE. PREPARE A TECHNOGRAPHIC approach is to identify users who’ve made Online, social and mobile platforms PROFILE. To build the broadest valuable contributions in the past and track often lend themselves well to experimenta- possible community, brands should strive to their future input, even when it fails to win tion. These technologies can, and should, be understand the online behaviors, motivations over the crowd. trialed in an iterative process, constantly field and usage patterns of their customer base. testing and refining brand strategies, instilling What are their common characteristics? What READ AND REACT. People want to confidence and creating value. Tactics can be sets them apart from other consumers? It’s be reassured that their opinions are custom-tailored to accommodate almost any not just about knowing how they spend being heard and valued. Regular feedback is level of technical sophistication, but you’ve their time, it’s also critical to understand essential for maintaining consumer attention got to step up and get started. what catches their interest and stimulates and activity in a corporate-sponsored online participation—coupons, discounts and environment. Find ways to encourage them STAY COMMITTED. Successful social cash rewards; games and contests; social to share their stories, and then loop those initiatives aren’t one-offs. The real recognition; or insider opportunities to beta messages back to the brand. benefits come from long-term engagement test new products? and continuous improvement.
  • 19. The Power of Play 18 18| 01 SECTION 18| Create The life of the average American is increasingly value of play—both online and off—exploring, spent online. We’ve come to depend on the imagining, creating and renewing our world. constant stream of information as if it were umbilical, an oxygenated and brain-sustaining When it comes to the power of play, some lifeline. Our workdays (and more nights brands are already plugged in. Converse, for and weekends than we’d care to admit) are example, is no longer just an athletic shoe punctuated by constant eyeballed bursts of company; the brand has been reinvented as information, posts, updates and tweets, a never- a curator of cool. In July, members of rock ’n’ ending digital pulse that, like a pacemaker, keeps roll bands Vampire Weekend and Best Coast us rolling and our hearts and minds in rhythm. produced a Converse-sponsored, web-released hit single, “All Summer,” which quadrupled Yet there’s no digital substitute for the real world. Converse’s web traffic and resulted in an We haven’t lost any passion for restaurants and estimated $6.5 million in brand mentions and bars, hair salons, football games, cinema and unpaid media. Now the company is developing shopping malls. We’re not in retreat from reality. a recording studio named Rubber Tracks in But more and more, we’re augmenting these Brooklyn, NY, where emerging artists will get free real-life experiences with mobile and online studio sessions and a chance to have their music Connecting in a connectivity. And the nexus of our online and offline worlds—the proliferating points of overlap distributed on Converse social media channels. Clearly, the company has re-embraced its legacy Converged World and integration—that’s where the interesting stuff is happening. as the über-cool cobbler to generations of rockers from Keith Richards to the Ramones to Kurt Cobain, leveraging a playful and powerful In 2011, we predict an accelerated integration cultural connection with consumers. of online marketing with real-world activities like promotional events, demographic research Other brands seek to offer consumers a taste of and in-store shopping. Interactive marketers adventure—on the web and all across the world. will increasingly look beyond the web to find Engauge client Chick-fil-A has built a robust new ways for brands to resonate with consumer owned-media channel using social media—and culture. In the process, we’ll rediscover the a fan base of more than 3.5 million. With this
  • 20. 19 Engauge helped Van Gogh Vodka develop its “Unbottled” campaign, sponsoring ladies’ nights at clubs and encouraging fans to pose for pictures. Photos channel, Chick-fil-A drives trial for new products and of women cheerfully embracing gives “raving fans” a way to engage with the brand the brand went viral after being in a fun way. The brand is strategically merging the uploaded to Facebook. online and offline worlds in this campaign, with fans dressing up like cows to earn free food in their restaurant locations and thousands posting photos of the fun within social media channels. Canadian Club Whisky, Starwood Hotels and Red Bull have all organized scavenger hunts that provide clues on platforms like Twitter and Facebook Places, mixing online sleuthing with real-world prizes, destinations and celebrities. With its Code Spotter Sweepstakes, Engauge client Nationwide Insurance drove fans to engage with NASCAR in a playful way instead of simply as passive observers. And play they did, entering 1.8 million codes that were plastered everywhere fans might look, even on the dashboards of racecars that show up on the in-car live camera feeds on race day. Ethnographic insights are critical for any culture- propelled social marketing campaign. Engauge client Van Gogh Vodka reached beyond the web to engage adult consumers in their natural habitat—their homes and favorite bars. Researchers interviewed Van Gogh fans over cocktails in their own kitchens and learned that women, in particular, were being under-served in a premium vodka category that traditionally catered to men.
  • 21. 01 SECTION Create TheAction Plan for Challenger Brands Content Play> Brands can realize bigger gains by producing 100 patrons, but the audience for the event and owning their own video content, rather grew exponentially online, thanks to a than bogging down somebody else’s show livestream video broadcast. with pre-roll or interstitial ads. Online video can be a force-multiplier for promotional Livestreaming—online coverage of live events, particularly those that create an events in real time or rebroadcast on- authentic, immersive experience with a niche, demand—remains a small portion of total but influential, target audience. online video content. But this segment has escalated at a particularly rapid clip. 40% For brands with a small budget competing Consider: Americans viewed 650% more against category leaders with outsized media online live video in 2010 than the previous Videos now account for buying power, it’s a chance to finally compete. year, according to comScore. Mind you, almost 40% of all this figure only includes videos from five consumer Internet traffic. The Livestreaming Revolution publishers:, USTREAM, Livestream, LiveVideo and Stickam. Fans and filmmakers at the Los Angeles Film Festival in June—with two more nail-biting YouTube recently trialed a new livestreaming days to wait for the premiere of Twilight video service, broadcasting talk shows and Saga: Eclipse—were treated to a free concert how-to videos in real time from programmers by up-and-coming L.A. band Honey Honey Howcast, Rocketboom, Next New Networks 650% and singer-songwriter Chris Pierce. Cameras and Young Hollywood. Ad buys and were rolling as the crowd filled the club, a sponsorship opportunities are expected to venue dubbed the “live.create lounge,” follow. Facebook, taking a different strategy, Americans viewed 650% more live online video where premiere sponsor ZonePerfect now provides a fly-on-the-wall feed into the in 2010 than the Nutrition Bars showcased nearly 30 other company’s Palo Alto headquarters via its previous year. musicians over the course of the festival. The new Facebook Live channel. In addition to intimate club only accommodated around corporate presentations and press events,
  • 22. 21 Much More Than Repurposed TV Spots: the Facebook service is peppered with celebrity Best Video Ads Slyly Play Off Cultural Connections of Brand and Base appearances, like a cameo by actress America Ferrera, who stopped by the launch party to pitch There are many other creative ways to commit to video. Many of the best online her latest indie flick, The Dry Land. videos play off a unique cultural component of the brand and its customer base without overtly sermonizing about the company or its goods and services. Seismic Shift in Spending With its web-based sitcom Back on Topps, for example, the baseball card Brands have been pumping up budgets for online company Topps found ways to consistently be funny while inherently emphasizing video advertising. Total spending for online video the social connections of the brand. Rather than an advertisement, it’s an ads will jump by over 40% in 2011, according to immersion, inviting the viewer to live within the brand. The fictional faux- eMarketer, after skyrocketing nearly 50% in 2010. documentary series—similar in style and feel to The Office—has been viewed over These numbers are a direct response to changes in 1.5 million times on YouTube. consumer media consumption. Web video continues to gain greater importance for brands as consumers Similarly, a five-minute YouTube spot for Orbit Gum scored over a quarter million crave more and more content: views since its debut in June 2010. The piece was developed by DumbDumb, a sponsor-driven advertising and production company founded by actors Jason • American viewers are spending significantly more Bateman and Will Arnett, both of Arrested Development, who infuse the long- time watching videos on YouTube (up 68% in format video with their own brand of humor. 2010) and Hulu (up 75% in 2010), according to comScore. Rather than thinking of the Internet as a smaller, cheaper, lower-profile platform for • Nearly 180 million Americans regularly watch repurposed TV ads, which often fail to reflect the style, feel and immediacy of the online videos, an activity in which they spend, on digital format, breakout brands have learned it’s often more effective to provide average, 14.3 hours per month. original content for consumers. Consumers clearly want high-quality online video • Videos now account for almost 40% of all content, but brands don’t always need to produce a viral sensation or develop an consumer Internet traffic, according to Cisco, and online version of Friends to use video effectively. Creative interactive campaigns will reach nearly 60% by 2014. can satisfy the demand and keep engaged consumers coming back for more.
  • 23. 22 Move beyond the ordinary to do what’s never been done before. 02 SECTION Innovate
  • 24. 23
  • 25. Innovation in Action Dizzied by the breathtaking pace of digital innovation, marketers fast-following competitors. Even category leaders rarely have time to risk being swept up in the crush of the trend-chasing crowd, running rest. Gap, for example, lent major credibility to online coupon company scattershot without a clear strategy, entering a flash-mob marathon Groupon with its first national promo deal in August. But within three without a finish line. months, the apparel company had changed course and rolled out a new offer with Groupon’s newest and biggest rival, Facebook Deals. Though brands increasingly recognize the value of establishing digital relationships with audiences, the fundamental choice of finding the From livecast video to virtual goods, interactive TV to location-based right interactive platform is more difficult and complicated than ever. services, social gaming to next-generation mobile ads, marketers The channels are multiplying. Online, social and mobile ad alternatives face an incredibly diverse mix of new opportunities. Much of the continue to proliferate. Every day we face a fresh deluge of tech overall acceleration in online and mobile marketing can be attributed updates and trend alerts. Marketers need to be more than merely to emerging companies such as Facebook, Zynga and Twitter. Yet familiar with these new technologies; they need to be strategic. They large incumbents, such as Apple, Google and Microsoft, have also must see beyond the hype to accurately evaluate their options, then proven capable of pushing the pace with innovations, moving faster deploy the best new digital tools for their brand. than their smaller competitors. The competitive field of technology firms is guaranteed to reconfigure again within the next five years and The pressure—and potential payoff—is immense. Groundbreaking marketers will need to remain nimble, attentive and ready to reallocate marketing campaigns are generally only a few months ahead of their resources accordingly.
  • 26. 25 Jeff Hilimire chief digital officer FOLLOW JEFF ON HIS BLOG AT JEFFHILIMIRE.COM OR ON TWITTER @JEFFHILIMIRE Marketing mastery of digital technology goes far beyond knowing what’s hot today, what’s launching tomorrow and how it all works. The best interactive campaigns are more than just a buzz-driven choice of a new media channel. They reflect a deep understanding of the target audience and its technographic profile combined with potent creative concepts that affirm and amplify the cultural connections between brand and consumer. Those campaigns represent innovation in action. Engauge’s Digital Innovation Group The Digital Innovation Group, also known as DIG, researches, tests and experiments with emerging technology with the goal of connecting brands and people. Launched in late 2009, clients now include Coca-Cola, Chick-fil-A, Reese’s, Cisco, IHG, NGK Spark Plugs, Nationwide Insurance and Food Lion.
  • 27. Consumers Hands 26 26| 26 02 SECTION Innovate Hold the World in Their Is this finally the year of mobile? As a profession, But given the history of hype in this subject, we’ve been asking—and dodging—this question it’s important to keep these numbers in for an absurdly long time. It’s a shopworn refrain context. The most wildly optimistic forecasts Can Innovative that’s become a joke: Mobile is the future of marketing—and always will be. suggest that mobile ads will become a $10 billion market in the U.S. in 2011, but Brands Deliver the most industry analysts put the numbers Not anymore. Mobile is now. Brands spent much lower. Middle-ground estimates from Right Message at 80% more on mobile ads in 2010 than in 2009. eMarketer indicate that mobile marketing the Right Time? The launch of Apple’s iAd mobile advertising (display, search and message-based ads) in network and Google’s acquisition of AdMob the U.S. will grow from $1.1 billion in 2011 have given mainstream credibility to mobile ads, to $2.4 billion in 2014. One or two billion making them a legitimate choice for mainstream hardly qualifies as a major breakthrough marketers. when compared to the $120 billion spent on advertising in the U.S. across all media, In the year ahead, brands will spend over $1 much less the $450 billion in global ad billion on mobile marketing in the U.S. for the spend. That’s not a drop in the bucket, it’s a first time. Globally, too, the growth curve shows nanoparticle in the Pacific. a significant arc. Google, in fact, has reported a $1 billion run-rate for its worldwide mobile Marketers, of course, recognize that budgets ad revenues since late 2010. Marketers are are rarely the best barometer for valuable responding, in part, to the rapid adoption of innovations and future-shaping trends. smartphones by consumers. Forecasts from Indeed, in mobile marketing, there are very Mobile Morgan Stanley suggest that global smartphone good reasons why the level of excitement sales will outpace personal computers in 2012, exceeds current expenditures. just five years after the introduction of the first iPhone.
  • 28. 27 $1B In the year ahead, brands will spend over $1 billion on mobile marketing in the U.S. for the first time.
  • 29. 02 Within two years, global sales of smartphones will outpace PCs.
  • 30. 29 What Makes the iAd Special? Apple opened the door to “freemium” discovered that the demographic profiles content when it began allowing in-app and usage patterns of mobile-empowered Since the iPhone and iPad don’t support purchases in late 2009, enabling developers shoppers can be extremely attractive. Flash, Apple has been hard-pressed to find to distribute a free trial version of apps with a workaround that can deliver the interactive additional features that could be “unlocked” Retail is a top-ten activity for American content that marketers crave. Enter the iAd. when users requested and paid for them. mobile users, but in terms of popularity, it The model proved successful: one-third of lags behind social networking, news, sports Apple’s new HTML5 advertising platform the top-grossing apps (34 out of 100) were information, banking, weather, movies and enables brands to build better mobile available as free downloads as of November maps. Last year, 7 million Americans per ads—with interactive content, video and 2010. The iAd platform is freemium with a month visited retail sites via mobile browsers, games—and serve them seamlessly to twist—consumers now “pay” to unlock the and 2.7 million used mobile shopping apps, consumers within apps. Nike, Toy Story 3 and content by watching ads within the app. according to comScore. The U.S. is behind Target have produced entertaining iAds that the global curve in this category: 57% of function, essentially, as apps within apps. In a related development, Apple also claimed shoppers in Asian-Pacific countries, like a leadership position with the iPhone 4, Japan and Korea, compared to 14% in the But the greatest significance of iAd is its with its high-resolution retina display that U.S. regularly make purchases after receiving new monetization model for the App Store. can convey a premium visual experience. a promotional text message, according to The iAd platform effectively encourages Competing device manufacturers quickly e-Dialog. But don’t be too quick to dismiss developers to make their apps freely pumped up their pixel counts, too. This those meek American numbers—we’re available for download, rather than charging is particularly important for luxury brands, catching up fast. Shopping app adoption in up-front fees from consumers. That means which have been reluctant to design or the U.S. rose over 90% in 2010, and there developers will increasingly (and, perhaps, deliver mobile brand messages that were was a 50% jump in browser-based mobile more profitably) derive revenues from ad anything less than beautiful. Finally, they retail. Many shoppers now use mobile as sales. To boost ad sales, they’ll need to grow have a mobile showcase suitable for the a price-comparison tool, but their usage their audience as big as possible, beginning crown jewels. will become increasingly transactional with with free distribution of content. Brands and gradual uptake of location-based marketing consumers both stand to benefit from the The Mobile Retail Revolution and direct-to-mobile offers. new arrangement, but the biggest winner will be Apple. For hosting and selling the As the technology of handheld devices grows People tend to be highly targeted in their ads, Apple takes a 40% cut of developers’ ad more sophisticated along with their potential mobile activities. Marketers should respect revenue. That’s a big bite. as marketing platforms, many brands have the constraints on their time, attention and
  • 31. 30 2.7M Americans used mobile shopping apps last year. screen size and make every effort to serve and The Gristle Missile, who snort and stalling at the starting line while they user-relevant content. stomp and promote a steady diet of chicken debate about what “mobile” actually sandwiches. At-home entertainment for iPad- means. Though SMS still dominates mobile The best mobile campaigns begin with a equipped preteens, the comics have proven messaging—6 trillion text messages were firm grasp of the cultural and technological to be smart, funny and engaging. sent in 2010, according to the International demographics of the customer base. Telecommunications Union—mobile Engauge client Ruth’s Chris Steak House, for Yet many companies still seem frozen in place marketing is no longer limited to text, search example, understood that a big portion of when it comes to mobile marketing. They and display. its clientele were executives who wanted a can’t figure out how to approach the space. way to book lunch meetings and after-hours What’s preventing them from overcoming What passes for “mobile” today may dinners with ease and absolute assurance. their inertia? Why aren’t they already moving actually be an amalgam of multiple The restaurant chain responded with a ahead with mobile? platforms—online, social, video, music, custom-tailored app that facilitates mobile- gaming, payments, retail transactions, made reservations. Businesspeople booking Partially, it’s because marketers are stuck in a location-based services and augmented tables with their iPhones and BlackBerrys traditional mindset that prevents quick-and- reality. Social networking, in fact, is now the receive automatic confirmation and the dirty field testing of new technology. The fastest-growing mobile activity, according assurance that they won’t be left waiting for a barriers have a number of different names to comScore. Accordingly, a big part of the table when taking an important client (or the like “demographics,” “reach,” “projections,” problem for marketers is figuring out which CEO) out to lunch. “plans,” etc. Major mindshifts in marketing foot to put forward first. rarely happen overnight, of course, Catering to a much different demographic particularly when the profession is faced Those decisions depend on a careful in the restaurant business, Chick-fil-A with a new, transformative medium. But with calibration of brand, base and message, but, developed a series of comic books that mobile, in particular, the excuses have been generally, the best strategies emerge from proved popular with kids. The quick-serve egregious. continual testing and fine-tuning, because chain is expanding the concept by publishing when it comes to mobile, what’s needed the series as an iPad app featuring cow After waiting years for mobile to become now is a little less conversation and a little superheroes named Cold Cuts, The Swatter legitimatized, some companies are now more action.
  • 32. Going Mobile and a Fast Start 31 Getting a Firm Grasp Marketers should be actively experimenting with new apps and technologies to determine their potential value and how best to use them. Here’s our perspective on how companies can start embracing mobile: IT’S OK TO FAIL, JUST FAIL FAST. FIGHT ANALYSIS PARALYSIS. GET IT IN YOUR CUSTOMERS’ In the start-up world, the only way you We are all for making sure you have a HANDS. Today, successful start-ups get better is to try, fail, learn and retry. The plan in place, and having research to support work hard to get their product in front of cus- key with being good at failure is failing fast. that plan is great. But if that plan is being tomers as soon as possible. This allows them Don’t stall at every setback. Instead, be ready used as a crutch to avoid getting started in to get immediate feedback and fine-tune un- to adjust as you go. mobile, then you need to find a way to move til they’ve developed a product that people through it. Which brings us to the third point. will use. With mobile, testing campaigns or apps in specific markets—and rolling out REMEMBER HENRY FORD. functionality as you go—is a great way to get Mr. Ford is often quoted as saying, “If invaluable and timely input from customers. U.S. Mobile Ad Spending 2009-2014 I had asked my customers what they wanted, millions and % change they would have asked for a faster horse.” And, lastly, ask yourself: ‘09 $416 30% Visionaries like Steve Jobs often use this DO YOU REALLY WANT TO BE quote to emphasize why they do things that AN IMMOBILE BRAND? ‘10 $743 79% are contrary to what research might indicate Do you want to be a brand that is severely is the right path. Sometimes your customers limited in where and how you interact with ‘11 $1,102 48% don’t know what they want until you give it customers? If you’re continuing to find rea- ‘12 $1,501 36% to them. sons why your company isn’t ready to start testing mobile, you’ll just keep standing still. ‘13 $2,036 36% Nobody wants to be an immobile brand. ‘14 $2,549 25% Source: eMarketer
  • 33. 32 Getting a Fix On Location-Based Mobile Marketing 80% Last year was the ignition phase for location- dramatically, adding new users at an expo- based mobile marketing with the launch of nential pace. Meanwhile, Facebook, which Facebook Places and the upward trajectory of recently debuted Places after being rebuffed Currently, location-based social networks are primarily other check-in services like Foursquare, Gowalla, in its bid to buy Foursquare, clearly intends a hit with young, geeky guys: SCVNGR, Loopt and Twitter Places. to win the geolocation space race. nearly 80% of users are male, and the vast majority are Will we see a liftoff in 2011? Foursquare and Facebook Places attracted several million between the ages of 19-35. Google-funded SCVNGR have been rising users within its first few months and gained
  • 34. 33 the support of major brands like Gap Who’s Got the Holy Grail of Location-Based Engagement? and The North Face for its test run of Facebook Deals. Check-in promotions have appealed to a achievements, like run time and total vertical wide range of consumer-oriented companies, descent. Like those Disney guests waiting However, fewer than 5% of Americans were including Whole Foods, Starbucks and outside Epcot Center, Vail visitors spend much using these location-based mobile services McDonald’s, but certain brands are of their days in line, while queuing and riding as of August 2010, and only 1% do so on a particularly suited to location-based ski lifts. With EpicMix, the resort discovered a daily basis. Geolocation services will require marketing. way to turn the downtime of a lift-ascent into brand support before moving beyond early an opportunity for deeper brand engagement. adopters to reach the mainstream. Forward- Disney Parks, for example, teamed up with There’s also an EpicMix kid site for skiers under thinking innovators are already in action. Gowalla to create virtual stamps and special age 13, with special privacy controls, which The trend-aware followers are getting in line. trips for participants at over 100 top theme should appeal to parents intent on keeping And the laggards are, as always, in danger of park locations, including Epcot Center, Space their children under supervision. By monitoring being left behind. Mountain and Pirates of the Caribbean. real-time updates, parents can keep constant Presumably, they’re not trying to drive more track of their children’s whereabouts, even if Backed by creative campaigns, appropriate visitors to these rides and destinations—they’re their 12-year-old speed demon leaves them privacy policies and added functionality, already popular. Rather, Gowalla provides stranded at the top of a black diamond. location-based mobile marketing could easily visitors something to do while waiting in long gain enough momentum to go stratospheric lines, which creates additional experiential In 2011, expect more brands to pursue within the next two years. layers for guests. It’s a brilliant application of partnerships with location-based service the technology. providers. The sheer volume of start-ups in At the moment, location-based social this category, however, inevitably adds a great networks are primarily a hit with young, Vail Resorts just launched EpicMix, a deal of time and complexity for marketers geeky guys: nearly 80% of users are male, location-based app that’s linked to the bar trying to choose applications. Among the and the vast majority between the ages of codes on lift passes that are scanned by many competing services, each with a slightly 19-35 (70%) with college degrees (70%), resort personnel every time a skier heads different story and spin, who will ultimately according to Forrester Research. This is the up the mountain. The application provides win this market? same crowd that was using Twitter three maps, messaging, weather forecasts and years ago. Draw your own conclusions. snow reports. It also calculates stats and
  • 35. 34 Who’s Got the Grail? location-based platforms
  • 36. 35 Marketers seeking greatest reach and recognition will probably favor the largest contender, Facebook Places, but start-ups like SCVNGR and Checkpoints have introduced valuable innovations that can offset their smaller profiles. Facebook Places Foursquare Yelp Check-In Offers Scoop: Launched in August 2010 with Scoop: Generally given the most credit for Scoop: The popular Yelp website added functionality that’s instantly familiar popularizing the concept of mobile check-ins, check-in service in January 2010 where to users—finding nearby friends and, Foursquare was founded in 2009 and recently consumers review and rate local busi- if you’re traveling together, tagging passed up a $100 million buyout offer from nesses. But it wasn’t until November companions. Yahoo!. that Yelp finally introduced Check-In Size: Facebook claims Places is more Size: 5 million members. This represents a nearly Offers to allow brands to reward their popular than any other location-based 1,000% increase since March 2010. loyal checked-in customers. service. Significance: People are getting tired of Size: Not reported. Founded by members Significance: In combination with Facebook gimmicky badges and mayors and will need of the so-called “PayPal mafia” in 2004, Deals, the check-in service attracts more functional offerings before the site Yelp is supported by ad revenue and mobile shoppers with local incentives and loses relevance. But don’t call it a comeback. has a strong following with 38 million delivers strong tie-ins to brand pages. Foursquare remains quite healthy in terms of users monthly, making it a natural fit for new members. The site added 1 million new location-based services. users within two months after the launch of Significance: Given Yelp’s status as a SCVNGR arch-rival Facebook Places, then registered the trusted source of consumer reviews, next million in under six weeks. this emerging check-in channel will be Scoop: A game-based approach with worth watching in 2011. Unfortunately, check-in challenges and shared photo Yelp may have copied the wrong pages snaps, SCVNGR puts a welcome spin on Gowalla from the Foursquare playbook when it the location craze. It’s tightly integrated Scoop: The latest version of Gowalla’s location- added “Yelp Badges” and “Yelp Roy- with Facebook Places. sharing app allows users to check in to other alty” like Dukes, Duchesses, Kings and Size: 800,000. location networks. Barons into its check-in app. Significance: The game-based approach Size: 1 million members. creates a deeper level of consumer Significance: The cross-platform play was a engagement within location-based smart move, removing the pressure of an services—way better than badges. all-or-nothing decision for marketers who’ve been struggling (or stalling) to pick the perfect location-based platform.
  • 37. 36 Loopt WeReward MyTown Scoop: Since 2006, Loopt has let users see Scoop: WeReward allows consumers to Scoop: A mash-up of Monopoly and Second where their friends are and what they’re accrue, exchange and cash out points via Life, this addictive GPS-enabled app is doing, incorporating local content from PayPal, earning $10 for every 1,000 points. built around the idea of buying and owning Citysearch, Metromix, Bing and Zagat. It’s also the first location-based service your favorite real-world hangouts. Consum- Size: 4 million users on Sprint, AT&T, Verizon, to integrate check-ins, product sales and ers check in to unlock rewards, accruing iPhone, Android and BlackBerry devices. reward-app downloads with CRM function- points that can be used to buy virtual real Significance: Loopt offers ad services for ality from Salesforce. estate based on actual locations, and then brands across a suite of products including Size: Not reported. charge other players “rent” for future Loopt, Loopt Star, Loopt Mix and Loopt Significance: While attempting to fine-tune visits to that venue. Released by Booyah Pulse for the iPad. Despite the impressive its closed-loop CRM functionality, WeRe- in 2009, it’s become the most popular membership numbers, they lack the buzz ward has been offering the service for free location-based social game. of Foursquare and Facebook Places and to large clients like Domino’s Pizza. They’ve Size: 3.3 million players. face stiff competition from similar services also rolled out a double opt-in feature that Significance: Several pioneering brands have like whrrl, buzzd and brightkite. allows advertisers to continue communica- set up shop in MyTown. Volvo presented tion with consumers after the initial deal is branded virtual goods to players checking done. into locations like garages or auto dealer- Twitter Places ships. H&M showcased its Blues collection Scoop: Highlighting tweets at any given of denim garments on MyTown, report- location, Twitter finally launched the edly drawing interest from around 700,000 service in June 2010 after several months players. of rumors. Size: Not reported. Significance: Stay tuned. Currently, brands aren’t allowed to “claim” their own Twitter Places, but a company spokesman told Mashable: “We’re experimenting with a variety of features. Allowing businesses to claim a Place is a natural thing to consider for the future.”
  • 38. 37 37 Checkpoints Scoop: This iPhone app launched in Septem- ber 2010 and gives rewards for scanning bar codes of participating products. Check- points advertisers, in turn, can deliver coupons, recipes, games or other digital content to the consumer’s iPhone once the item is scanned. Size: 100,000 downloads of the iPhone app occurred within the first month. Significance: Checkpoints deserves credit for recognizing how packaged-goods brands can benefit from location-based services. For brand partners such as Tyson, Belkin and Seventh Generation, the real value of product check-ins will be measured by what happens in the checkout lane. 4% of online adults in the U.S. use geolocation services like Gowalla and Foursquare.
  • 39. Q POINT OF VIEW What’s the most important tech platform today in digital marketing? Social is no longer an optional add-on; it’s the new default. Facebook reached an epic milestone in November, accounting for a quarter of all webpage views in the U.S., according to Hitwise. For some brands, social presences are now the primary platform for brand expression and interaction. In 2011, their owned-media channels will be augmented by and community managers—but success in social is rarely attributable to how much money you throw around. Rather, social campaigns live or die as a result of creativity, commitment and mindset. Creativity, in particular, matters more than ever. Unlike traditional media like TV, brands can’t “rent” an audience for thirty seconds by buying an spot traditional homepages, rather than the other way around. in a popular program. In social media, brands have to build and retain their own audience. However, those tech-savvy brands are the exceptions; the bulk of marketing has not kept pace with the advance of innovation. Marketers bemoan the proliferation of platforms because of the Brands should also recognize that successful owned-media channels increase in required resources. They continue to view these platforms on Facebook, Twitter or YouTube can be launched with minimal as “tactics,” rather than an invaluable extension and expression of technological sophistication and very little up-front investment. It’s not consumers themselves. Brands should take solace in the fact that completely free—somebody has to pay the salaries of dedicated staff these technological changes have reinvigorated engagement.
  • 40. 39 Raghu Kakarala svp, creative technologist FOLLOW RAGHU ON TWITTER @INTERPOLATE Social and mobile have increasingly become essential “life tools” for mainstream users. Over 20% of U.S. consumers visit social networking sites and blogs on their mobile phones, according to comScore, and it’s expected that half of all U.S. consumers will have a smartphone by the end of 2011. If consumers are allocating their time and money, what’s holding back brands? Today’s early adopter is often an average consumer, rather than the neighborhood techno whiz. That’s why it’s not too early to begin testing emerging technologies like connected TV, where brands can come alive through addressable commercials, or social TV, with mobile apps that enable audience participation. These technologies may be logical next moves for brands that have already mastered their owned-media channel.
  • 41. 40 02 SECTION 40|40| Innovate This year, Groupon, a digital coupon company that taps the buying power of the crowd, may become the fastest-growing, billion-dollar business in history. >60% of consumers now search for deals digitally before shopping. Loyalty and Action
  • 42. 41 Digital Deals Retail Experience Change the The new technology of thrift comes with a very More and more, online and mobile offerings oriented spending would increase at least retro twist—we’ve devolved into a society of are being used to supplement traditional 5% annually. hunters and gatherers. Shoppers are scouring shopper channels like in-store displays and online reviews, checking price-comparison sites circulars. Today’s brands are using new The primary push has been economic. Nielsen on their smartphones and signing up for digital technology and data-driven insights to create reports that one in four North Americans deals before hitting the stores. Long gone are increasingly customized reward programs. The have no discretionary income. But this shift the gilded days of carefree consumption. digital menu includes search, social media, is also being driven by a broad range of new online coupons, daily deals, thematic content, online and mobile options. For marketers, the This year, a digital coupon company may relationship marketing and apps. challenge is in selecting the most effective mix become the fastest-growing, billion-dollar of platforms, messaging and incentives. There’s business in history. The success of Groupon A recent report from Booz Allen for the Grocery no one-shot solution. Brands need to review offers a lesson for brands: The convergence Manufacturers of America found that over 60% all their options, honing reward programs and of shopping and digital marketing offers of consumers now search for deals digitally shopper-oriented strategies to drive consumer opportunities for innovative brands to surge before shopping. Not coincidentally, over action. forward, leaping over the economic slump if 80% of packaged goods executives in the they can deliver campaigns that add some zing survey said their companies would be boosting The goal is frictionless engagement, a state to the zeitgeist while coordinating tactics across shopper marketing budgets over the next three of brand nirvana we define as the removal of emerging technology platforms. years. The majority indicated that shopper- barriers that inhibit consumer decision making.
  • 43. Futurecast: from A Fictional Scene the Year Ahead After traveling to Zurich on business over Reading her email over coffee the next morning, Valentine’s Day, Cissy Halstead wanted to Cissy found a new Groupon offering a half-price do something special for her fiancé, Trevor, pedicure at a nail salon that recently opened when she returned home that weekend. downtown. The promotion required a minimum of 25 paying participants by a one o’clock While waiting for her return flight, she deadline, otherwise, the deal would disappear. found a seat in the airport lounge and checked her iPhone. She’d received a tweet She quickly posted a note—part appeal, part from a friend and fellow foodie. “Can’t wait lark—on Facebook: “Spa day? Who’s up for a to use my @MediciRestaurant Groupon pedi?” By noon, she’d received 11 responses: tonight! The tiramisu is amazing!” Cissy two yesses, one maybe and eight wish-we- clicked the link, filled out the form with coulds. She went ahead and registered and so her credit card information and ended up did three of her friends, pushing the number of saving 50% off a romantic dinner for two. participants past the necessary 25 people. By That night, Trevor was surprised—and two p.m., all four friends were seated side-by- impressed. He relented, with a smile, when side at the busy salon, enjoying their impromptu she reached for the check. mini-makeovers.
  • 44. 43 1% Only 1% of coupons for consumer packaged goods are distributed online, but those coupons account for nearly 5% of all CPG coupons redeemed by consumers and 20% of their total value.
  • 45. The New Cool: Direct Action Digital Coupons Drive By matching deal-seeking shoppers with and subsequently spurned a $6 billion Game Over for Groupon? local promotions, Groupon, Facebook takeover deal by Google. Deals, LivingSocial, Tippr and other sites Not so fast. In many ways, the mobility have collectively pulled off a major coup in Facebook introduced Facebook Deals and instant gratification of Facebook Deals marketing—making coupons cool. with a breakout debut in November and represents a significant improvement over quickly attracted many major brands, the Groupon model of daily deal emails. Daily coupon sites tap the purchasing power including Gap (three months after Yet consumers make an estimated 80% of of the consumer collective by encouraging its much-touted deal with Groupon), purchases, on average, within ten miles of shoppers to share offers with their friends McDonald’s, Starbucks and Chipotle. It their homes. Groupon may survive (and thrive) on Twitter, Facebook and Yelp, leveraging links to location-based Facebook Places if it can capture the local markets. social networks—and a sense of deadline- and offers mobile functionality that allows induced urgency—to make sure that deals smartphone users to browse deals on- The benefits are quite clear for marketers—not pass the “tipping point.” the-fly from nearby restaurants, stores only attracting new customers, but convincing and other venues. Consult the map-based those customers to participate and spend Daily deals have proven ideal for businesses app, pick a deal and check in. money within a specific timeframe. Groupon offering services that today’s penny-pinchers claims its consumer customers spend 60% might have trouble justifying without a Facebook, in total, has over 20 times more above the value of the coupon, on average, deep discount—an hour-long massage at members than Groupon and can provide and 95% of its business customers say they’d the day spa, a holiday travel package or an more detailed consumer demographics use the service again. Even so, the promotions afternoon at the driving range. for brand clients. So it’s not surprising that may not be immediate moneymakers for some industry analysts immediately hailed participating vendors. In fact, companies like The initial frontrunner, Groupon, Facebook Deals as the “Groupon Killer.” Groupon generally split the resulting revenue went mainstream with an $11 million with their clients—revenue that already nationwide promotion for Gap in August reflects a steep discount of around 50%—so incremental sales can be negligible.
  • 46. 45 Retailers Look Past Competitors To Create Their Own Offerings For brands, online coupons have emerged by allowing customers to receive their offer their own Facebook-based deals. But as a compelling tool for engaging early for free if they convince three friends to some brands may be better off pursuing adopters and spreading the word in participate. partnerships with better-known providers like extended social networks. Walmart Groupon and LivingSocial, which can help introduced its own group-shopping app, ConAgra took a similar approach to spread the word. Boulder-based business Crowdsaver, on its Facebook page in incentivizing participation by offering Giant Nerd, for example, used the Wildfire October. The first deal—an 18% discount a coupon on its Facebook page that tool but couldn’t find five people willing to on a $500 plasma TV—passed the minimum progressively increased in value as more buy a $1,000 bike for $450, according to threshold of 5,000 “likes” within 24 hours. people “liked” it. Ad Age. Similar location-based services are offered Newcomers include Tippr, DealBug, The W Hotel in Scottsdale recently launched by companies like ScoutMob and Placecast, GroupSwoop, Homerun and Zozi. They’ve its own group deal in an app on its Facebook which target shoppers when they’re inside all tweaked the Groupon model in hopes of page, offering rooms at nearly 50% off its or near a participating store. In some differentiating themselves in a crowded field. $295 rack rate if at least ten people signed categories, these new technologies claim DealBug, for example, donates a percentage up. But how many people looking for hotel redemption rates of over 60%, compared to of proceeds to charity. Other sites tailor their reservations are going to already be “fans” 2% for traditional clip-and-save coupons. pitches for foodies, fashionistas, social gamers of the hotel in the city where they’re headed? or outdoor adventurers. Evidently, there were several locals in Prior to the launch of Facebook Deals, Scottsdale who didn’t want to sleep at home the second-biggest daily deal site was For brands with sufficient scale and scope, that weekend, because 28 people signed LivingSocial, which now serves nearly 100 like Walmart, launching their own Facebook up, according to Ad Age. But, in general, local markets and has raised $50 million app makes perfect sense. Several developers, certain types of brands may be better served in venture capital. LivingSocial has upped including Palo Alto-based Wildfire, have through deal-linking services with search the ante (and the social networking payoff) designed apps that allow marketers to design capabilities and similar functions.
  • 47. Q POINT OF VIEW What can brands learn from retailers’ embrace of convergence? Every day, shopper expectations get higher and higher, and the brand that is present in every channel on every device is the one that is going to have the best chance to make a real connection with them. Not long ago I stumbled across an Altimeter report, “The Rise of Social Commerce,” that talked about the enlightened state of Consumers shop in stores while using their phones to check competitive pricing, read product reviews and ask their network of friends for their thoughts and experiences. The more considered the purchase, the more highly social it becomes as anxiety to make a good decision drives consumers to reach out for real-world input. Accepting and enabling these behaviors is the first step. Best Buy gets a nod for “frictionless commerce” in which social and retail are integrated for early adoption by putting Internet-connected terminals inside stores to a completely redesigned shopping experience that’s truly consumer- allow consumers to do that very thing. centric. Even for non-retail brands, there are benefits to adopting an e-commerce mindset when it comes to convergence. But why We now see the integration of Facebook Connect with brands’ own stop there? site-registration processes. In addition to making the log-in process simpler, Facebook Connect provides a detailed picture of customers. The future of marketing is frictionless engagement. I call it brand The data goes far beyond demographics. We know what books they nirvana and define it as the removal of barriers that inhibit consumer read, events they attend, brands they care about and who their friends decision making. are. Amazon is leading the way by making the site your experience,
  • 48. 47 Shannon Delaney director of behavioral brand planning reminding you to buy gifts for friends’ birthdays and suggesting books and music you should buy based on your “likes.” Sometimes people are so excited about a great score or the pure joy of something they recently purchased, they want to share it with the world in real time. And yet, recently, a client asked, “Shouldn’t we wait to launch our social presence and spend six weeks doing focus groups to ask people what they really want from our social offering?” My answer: “Why wait? Every day is another day that you aren’t present in a place that they expect you to be and even more important is you have a social focus group right there.” To truly influence consumer behavior, you need to recognize that digital retail and social are not isolated channels. Seamlessly integrated and highly personalized experiences will lead to frictionless engagement. That’s not only nirvana for brands; it’s also heavenly for consumers.
  • 49. Start-up to Watch Breaking Down Location-Based Service Silos Can’t decide between Foursquare and Facebook Places? PlacePunch enables brands to think bigger— multiple platforms and venues. The suite with a broader perspective and better brings together Foursquare, Facebook Places analytics—when building their own location- and similar services under a unified dash- based loyalty programs. board, freeing marketers from the constraints of exclusively focusing on one channel at a Launched in September, PlacePunch provides time. PlacePunch also coordinates personal- online tools for managing and integrating ized brand messaging via Twitter, email and A conversation with CEO and location-based marketing programs across online couponing. Co-founder Adam Steinberg. (Disclosure note: Jeff Hilimire, chief digital officer at Engauge, invested in PlacePunch Q: What inspired the idea for PlacePunch? What was missing in the marketplace? through a start-up incubator.) A: Check-ins are driving bottom-line revenue for businesses. But marketers don’t want to be constantly keeping track of how many people are on Foursquare versus Facebook versus Gowalla. PlacePunch makes it easier for marketers to think strategically and integrate across all those services.
  • 50. 49 Q: How does it work? A: Several others, like Loopt, have also integrated with Facebook. They’re saying, basically, “Facebook has hundreds of millions A: We enable our clients to create branded location-based loyalty of users. Let me just tap into that user base.” They’re focusing on providing added-value services beyond the check-in. programs where customers can earn rewards and points for check-ins. Marketers can use any service they want; we’ll handle Gowalla, for example, has great city guides. They’ve got a great the tracking, the signups, the messaging, the redemptions and application. But they’re ceding ownership of their customers to deliver the rewards. We help them manage their programs and Foursquare and Facebook, and that’s a dangerous play on the measure the results. consumer side. Q: How difficult is it to integrate and manage multiple location- Q: Are check-ins a more reliable indicator of ROI than other based platforms without using tools like PlacePunch? commonly used social and digital measures such as the quantity of brand followers, likes and friends? A: A customer might check-in once at a restaurant running a A: It depends on the nature of the business. For retailers or Foursquare promo, for example, and receive a free appetizer. But that’s just a starting point. restaurants, bringing in additional consumers is often directly related to bringing in additional dollars. For a CPG brand, on We help brands run multiple segmented campaigns. We can the other hand, location-based check-ins may not be as valu- integrate analytics, messaging and rewards across platforms and able, but it’ll be interesting to watch what happens with product let brands know where their customers are coming from—for check-ins. We don’t really know yet what their value will be. example,10% on Gowalla, 60% on Foursquare and so forth. If you’re a brand, there’s a great deal you can learn about your Q: What’s ahead in 2011? When will location-based services go customers through check-ins. Not only whether they visit your mainstream? stores, but what else they like to do. You can build preference sets, better visions of your ideal customers. You can use messag- A: I think we’re approaching a major tipping point. By the end ing to interact with them at the right time and at the right place. of 2011, half of all U.S. consumers will own a smartphone. iPhones can now be purchased for $50. I read recently that Q: The latest version of Gowalla’s location-sharing app allows 30 million people have used Facebook Places. Foursquare is adding 150,000 new members per week. Things will continue to users to check-in to other location networks. Will the others soon follow suit? progress very quickly [in location-based marketing] in 2011.
  • 51. The Coupon User Wealthy, Well-Educated and Influential twice as likely to use online coupons than Coupon usage demographics are probably • 61% of adults with household incomes adults with household incomes under not what you’d expect. Contrary to stereotype, over $100,000 redeemed a coupon within $35,000 (39% vs. 21%), according to wealthy and well-educated Americans account the last six months, according to a recent the poll. for a significant portion of coupon clippers. Harris Interactive survey. • Groupon provides a very clear picture of These trends are even more pronounced when • Adults with college degrees are reportedly its customers: they tend to be women it comes to online coupons. Moreover, online twice as likely to have recently used (77%), young (68% aged 18-34), college- coupon users tend to be more discriminating coupons. educated (80%), employed full-time (75%), and more open to new experiences and single (49%) and with money to spend products. They see themselves as influential. • People in upper-income brackets with (29% with $100,000+ household income). And they’re really into shopping. $100,000+ household incomes were nearly The Online Deal Bug Living Social Coupon Offers: Donates a percentage of every deal to a charity of the customer’s choice. Provides free daily deals for users who con- vince three friends to participate. Facebook Deals Groupon RedPlum Linked to location-based Facebook Places, Requires a minimum number of paying provides consumers with local it offers four types of deals for consumers: customers before deals reach the “tipping and national offerings across a multi-media individual, friend, loyalty and charity. point” and become active. platform on brands they want most.
  • 52. 51 The Stats on Coupons Confluence of Economic and Tech Trends The uptick in coupon clipping began, in consumer spending have increasingly • 81% of U.S. consumers find it “fun” to see not surprisingly, amid the market crash in converged with new technologies and more how much they can save, according to the 2008. That year marked the first increase tactical marketing. 2010 American Pantry Study from Deloitte. in total coupon usage in nearly 20 years. During our present state of slow economic • Consumers saved an estimated $2 billion • The Internet accounts for less than 5% recovery, marked by high unemployment with coupons during the first half of 2010, of total coupon redemption and 1% of and middle-class wage stagnation, financial according to the coupon company Inmar. distribution, but the online segment considerations continue to motivate many The annual total for 2009 was $3.5 billion, has gained significant ground against consumers to search longer and harder up from $2.7 billion in 2008. traditional clip-and-save. for the best values. Changing patterns Tippr Zozi Sends out three local deals a day, which pro- Caters to an active crowd with deals on travel Pushes online coupons through affiliate market- gressively increase in value as more people and outdoor adventures. ers that publish the offers on their own sites and participate. Tippr acquired several patents re- receive a small payout for every coupon printed. lated to online group-buying from Paul Allen, Homerun co-founder of Mercata, a similar service that Oriented toward social gamers, provides Scoutmob went bankrupt in 2001 after blowing through credits and points that users can put toward Offers free deals when people check in with their $90 million. deals or cash-back offers. mobile phones at participating businesses.
  • 53. 52SECTION 52 02 52| Innovate Full Tilt: Foward-Leaning Brands Marketing for In the massively multiplayer environment of ignored, but we see a growing segment that digital marketing, first-time players enter an merits serious and sustained attention. exciting new world that’s constantly evolving. They often spend the opening rounds just Video games are now bigger and more 93% figuring out what buttons to push. lucrative than the recorded music industry. At least 65% of American households play Take a cue from video games. The winners computer or video games, according to of tween girls in are the ones who rapidly adapt and refine the Entertainment Software Association. America play their tactics, they’re the ones who refuse to be Contrary to common stereotypes, the game- online games. intimidated. playing population includes significantly more women over the age of 18 (33%) than Among the many emerging brand platforms, boys under the age of 18 (20%). Gaming has gaming and games marketing have perhaps the become a legitimate mass media that brands greatest capacity to daunt the uninitiated. Why can’t afford to overlook. is this? If 93% of tween girls aged eight to ten in America are playing online games, according Capitalizing on these trends, major brands to M2 Research, what prevents marketers from have sponsored ads and product placement plugging in? in big-name games. Gatorade, for example, sponsored a series of ads in sports games Gaming Today, only a small fraction of most brand like NHL 10 and NBA Street Homecourt from and agency budgets is allocated to games Electronic Arts. The campaign essentially marketing. That may seem like a tiny sliver easily mimicked what Gatorade does for ordinary
  • 54. 53 65% At least 65% of American households play computer or video games.
  • 55. 54Online 54 game revenues are expected to rise at an 18% compound annual growth rate to 2013. televised sporting events—plastering its logo Online and mobile games are particularly mass downloads of popular games, minting across signs, water bottles, score updates and attractive to casual gamers, people who overnight successes. An impressive 20% of on-screen callouts. A recent study by Nielsen might not otherwise invest in sophisticated the U.S. population aged 6+ have recently found that spending on Gatorade products at-home console systems like Sony played a social network game, according to increased by 24% in households that owned PlayStation 3 or Nintendo Wii. By capturing an August 2010 report from The NPD Group. at least one of those games. a broadening spectrum of consumers, online Today, over 60% of social network users games have become increasingly viable and also play social games, according to the The global game software market grew more valuable as a marketing medium. most recent National Gamers Survey from than 50% from 2006 to 2009, according to Newzoo. Strategy Analytics, reaching record-setting revenues of $46.5 billion. In November, Social Gaming: Smart marketers have found creative ways Microsoft managed to sell 1 million Kinect Betting Big in 2011 to tap into this trend. Southern Comfort motion-sensing peripheral systems for its has launched a “Beat the Bartender” game Xbox 360 console within the first ten days of The social game Farmville, supported by on Facebook that challenges adult fans to its launch, proving, once again, that gamer Zynga’s five-year strategic partnership make a SoCo lime cocktail faster than their enthusiasm runs extraordinarily high. with Facebook, proliferated across social virtual bartender. CBS Consumer Products profiles in 2010 like bioengineered weeds, partnered with Ubisoft to develop “CSI: In the years ahead, gamers will increasingly consuming free time, productivity and Crime City,” where characters from the hit migrate into online, social and mobile. These attention spans. The game that encourages TV series enter a world strikingly similar to platforms will capture millions of new players you to “farm with your friends” now claims Zynga’s Mafia Wars, minus the annoying who are non-gamers today. Online game 80 million players. menus. Purina teamed up with Playdom to revenues are expected to rise at an 18% create Pet Resort, playable on Facebook. compound annual growth rate to 2013, at In the year ahead, we’ll see a big push of which point they’ll account for nearly 40% new social titles from game developers of total video game revenues, according to and publishers who recognize that positive industry forecasts. word of mouth on social sites can drive
  • 56. 55 >70% Currently, 70% to 80% of all app store downloads are games and roughly 60% to 70% of those games are free.
  • 57. 56 20% of the U.S. population aged 6+ have recently played a social network game.
  • 58. 64 million Americans play mobile57 games at least monthly. But haven’t we been here before with soon as a strategic counterpunch to the Though ad-supported mobile games have Second Life? Indeed, around five years ago, social dominance of Facebook. Social game a marginal presence in North America, many marketers enthusiastically set up shop developer Playdom was acquired by Disney, countries like Japan and Korea have proven in the virtual metaverse of Second Life from and Intel’s venture arm, Intel Capital, took more receptive to advergaming, and those Linden Lab, only to quickly lose interest an ownership stake in OpenFeint, a tech business models may eventually signal the as consumers (and their freaky-looking platform that allows game developers to add way forward for the U.S. market. Indeed, avatars) failed to show up. Yet marketers mobile and social features to their apps, like the overwhelming public embrace of, and who are reluctant to take a similar gamble live chat. These deals signal a shared belief heightened expectation for, free mobile apps on social gaming should keep in mind that social gaming is a cultural phenomenon will force game developers to reconsider several important distinctions. Second Life with long-term prospects. their options and eventually widen their is more of an experiential environment than revenue sources. a game. And it never really transcended its niche status. After five years and 20 million Mobile Gaming: Forecasts from eMarketer indicate that ad registered users, fewer than 1 million are The Go-Slow Zone funding will account for only 12% of mobile regularly active. Moreover, Second Life gaming revenues in the U.S. by 2014. That’s is a relatively complex and sophisticated Mobile gaming has surged amid concurrent $180 million of marketing dollars. Not much, endeavor. Newer social games that have waves of smartphone uptake and the rising really. And not surprising, given how reluctant become huge hits are, by comparison, much popularity of apps. Currently, 70 to 80% of all marketers have been to embrace mobile less of a strain on the cerebral cortex. app store downloads are games, according advertising in general. But for the right brand to Gartner, and roughly 60 to 70% of those with the right strategy, getting a jump on It’s also telling that the social gaming sector games are free. mobile games may be a smart move in 2011. has recently seen major investments from technology, media and entertainment Overall, 64 million Americans play mobile giants. Last year, Google quietly invested games at least monthly, according to upwards of $100 million in Zynga amid eMarketer, and that number is anticipated to rumors that “Google Games” is coming exceed 90 million by 2014.
  • 59. 58 Geolocation Gaming: Finally Moving Past Foursquare A hybrid of mobile and social gaming, concept of check-ins, will enter 2011 with Coca-Cola, for example, recently got the ball geolocation games have transcended the over 5 million users and is adding 25,000 rolling in the right direction with a nationwide boundaries and emerged as an important new users daily and logging 2 million game campaign aimed at teens called Coke category of their own. check-ins a day. The company has focused Secret Formula, which mixes consumer almost exclusively on growing their user rewards with location-based service from Though Foursquare and its badge-wearing base in hopes of crushing Gowalla and SCVNGR. Debuting on Black Friday, the mayors have hogged most of the hype in gaining enough scale to thwart (or at least busiest shopping day of the year, Coke geogaming, the spotlight will shift in the year withstand) incursions into its home turf by created challenges at Simon Malls across the ahead to other location-based social games Facebook Places and Twitter Places. The country consisting of check-ins and photos, like MyTown, a virtual version of Monopoly folks at Foursquare have belatedly begun to rewarding participants with $10,000 in total that attracted over 3 million users within 12 pursue ways to make money from merchants gift card rewards. Coke gave the campaign months of its launch. and will move more aggressively to recruit an extra boost with online and print ads, as more brand partners in 2011. What’s missing, well as playful in-store signage that read: MyTown appeals to consumers because it’s a though, are incentives to keep people “This Mall has Secrets. Unlock Them. Play real game, not a gimmick. And by expanding playing—the thrill of real entertainment. SCVNGR. Get Rewarded.” Part of the brand’s their “check-in” functionality to include Badges get boring. Mayorships are pointless. initiative involved familiarizing uninitiated products and bar code scans rather than Really good games require much more than consumers to SCVNGR. Though the location- just locations, the game developer Booyah just showing up. based service lags Foursquare and Facebook proved it was thinking strategically on behalf Places with around 1 million members, it’s of marketers too. In recent months, Booyah The next generation of geogames will given a welcome spin to the location craze by has reportedly inked deals with H&M, HP, employ better game mechanics and provide using a game-based approach to give added Microsoft, Pantene, Oil of Olay, Disney compelling content that use check-ins to meaning—and a lot more fun—to the act of and MTV. enhance playability, dimensionality and checking in. participation. In the process, they’ll become Foursquare, which helped popularize the increasingly attractive to marketers.
  • 60. More than 90 million Americans will 59 play mobile games by 2014. Retooling Brands with Game Mechanics U.S. Mobile Ad Spending The most important long-term takeaway noted that the rewards of playing games 2009–2014 millions and % change from the gaming industry may, ultimately, appeal to two distinct drives within ourselves: $2,549 25% be a greater understanding of game the wanting and the liking. Participating in $2,036 36% mechanics—what motivates people to play, games activates our ambition and sense of to spend money and commit tremendous craving. But on the other side of the brain, $1,501 36% amounts of time for very arbitrary rewards. games also satisfy our need for delight. $1,102 48% The Coke Secret Formula campaign, for Brand experiments with online, social and $743 79% example, features a number of critical factors location-based games—or partnerships beyond the cash-back gift cards—astute with game developers—may help marketers $416 30% understanding of social dynamics, points and gauge what kind of incentives keep people progress tracking, deadline-induced urgency engaged, as well as their optimal rate and and intimations of exclusivity. intensity. Chatfield refers to the “reward schedule” and the concept has clear Tom Chatfield, author of Fun Inc., contends implications for brands seeking ways to keep ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 that gaming can provide a set of very useful their customers coming back. Source: eMarketer optics for examining consumers and our contemporary culture at large. Addressing the TEDGlobal 2010 conference, Chatfield
  • 61. 60 Getting a on Virtual Goods Grip When American gamer Jon Jacobs bought Soon after acquiring the virtual resort, Jacobs Dogg—are expected to generate revenues the Asteroid Space Resort for $100,000 in rechristened it “Club Neverdie” and turned of $41 million in 2011, which is three times 2005, he paid real money for an imaginary it into a premier in-game destination that the size of the market in 2010. Overall, the building in an online role-playing game, included a nightclub, stadium and shopping entire virtual goods market could easily Planet Calypso, the oldest planet of mall where players spent real cash. His exceed $2 billion in 2011, according to the Entropia Universe. He’d reportedly personal income from the game exceeded published estimates. remortgaged his house to buy the make- $200,000 per year, according to Forbes. believe asteroid. Clearly this was an act of These kinds of anecdotes and figures tend insanity. Right? In November 2010, Jacobs resold his Planet to flummox those who’ve assumed that Calypso virtual properties for $635,000. virtual goods are, and would remain, a niche Planet Calypso is available as a free That’s a return of over 500% in five years. market. A few years ago, frankly, you couldn’t download, but its 900,000 registered users are Baffling, but true. even call it a market. It was a blip. A curiosity. encouraged to deposit real-world dollars to fund their adventures. A share of the resulting Nearly 30% of Internet users in North But consider this: When General Mills revenue stream goes to the developer—First America have purchased virtual goods in a promoted its Cascadian Farm Organic Planet Company, a subsidiary of Swedish social networking game, according to a May Blueberries on Farmville, players planted group MindArk—but players also buy in-game 2010 study in eMarketer. Branded virtual over 300 million of the virtual berries at a services and virtual goods from third-party goods—offering innovative tie-ins for a cost of 20 coins each, creating a bumper entrepreneurs like Jacobs. range of brands from Green Giant to Snoop crop of innovative marketing. Green Giant
  • 62. 61 61 The virtual goods market could easily exceed $2 billion in 2011. turned this strategy on its head, putting Branded Virtual Goods Revenue Worldwide Farmville coupon stickers on select produce in 4,000 stores nationwide, redeemable for in-game Farm Cash. 2010–2015 millions and % change $318 41% Improved mechanisms for converting real $226 51% cash into virtual currency are building more momentum. Facebook Credits is now the $150 71% exclusive payment method for a number of popular social games, and PayPal is a preferred provider for Facebook Credits. $115 88% As these systems mature, micropayments Source: eMarketer $41 156% will become increasingly feasible alternatives for marketers to offer in lieu of traditional coupons or discounts. Already, developers $16 like Ifeelgoods of Menlo Park, California, have started helping brands build app-based bridges from virtual currency to real commerce. 2010 2011 2012 2013 2014 2015
  • 63. 62SECTION 02 62| Innovate One-third of all U.S. households will have Internet-connected TVs by 2015. Interactive TV
  • 64. 63 The Two-Way Tube Battle Royale Reportedly dissing Google TV because its were neither compelling nor memorable, but “footprint was too small,” News Corp.-owned a lot has changed in the last ten years. Don’t Fox closed ranks with the other broadcast expect Google TV to fade into obscurity. networks—ABC, NBC and CBS—in blocking access to its programs from the new web- Despite the past failures and the fierce enabled platform. The implication was that the resistance from broadcast networks, Forrester newcomer wasn’t popular enough to earn their Research recently predicted a third of all respect and cooperation. But instead of simply U.S. households would have Internet- ignoring Google TV, the broadcast bullies tried connected TVs by 2015. The anticipated to kick the new kid out of their schoolyard. uptake can be attributed, in part, to a retailer cabal: Best Buy announced it would only But connected TV isn’t a sandbox. It’s sell connected TVs in 2011, and Walmart Madison Square Garden. It’s the big ring indicated it will follow suit in 2012. In a where the heavyweights are contending for related move, Walmart also expanded $180 billion in ad revenue. It’s the title match into digital content distribution, acquiring between digital and traditional media. And streaming high-def video company Vudu, smart marketers have booked ringside seats and inking an interactive deal with Disney for 2011. for Toy Story 3. Meanwhile, manufacturers like Toshiba, Samsung and Sony are ramping True, earlier versions of interactive TV lost the up production and rolling out new models fight before it really began. This is a category of interactive TVs. Across the technology haunted by the wreckage of has-beens and and retail spectrums, leading companies wannabes with a decade-long history of hype are pursuing parallel agendas that will drive and misplaced hopes. Remember WebTV and adoption of connected TVs and reconfigure AOL TV? Nope, neither do we. Those products that ungainly box in your living room.
  • 65. Open Eyes and Active Hands Brand Experimentation Required Interactive TV builds on the promise of digital as the technology evolves. The integration of and consumers are growing more accustomed marketing—engagement, measurement and television and digital ads onto a single platform to viewing video ads online, further blurring targeting—and brings it to a bigger screen. will very likely be a catalyst that integrates, and the experiential boundaries between digital Addressable ads could be a serious boon to rationalizes, the respective marketing budgets. and TV. By late 2010, online video content brands with clear segmentation strategies was being viewed by 178 million Americans and a willingness to experiment. The Meanwhile, Walt Disney Co., Mattel Inc. and monthly, according to comScore. On average, interactive content, of course, needs to be the U.S. Navy have been experimenting with those viewers consumed 14.3 hours of online sufficiently compelling to lure viewers away interactive channels on cable, according to video per month. from their show. The Wall Street Journal. Cablevision created interactive channels for the brands that can be Most households with interactive televisions, On the other hand, mass brands accustomed navigated by a standard TV remote, providing however, have not been taking advantage of to connecting in a predictable manner with videos, coupons and callback requests for the heightened connectivity. Back in August, the largest possible audience may initially customer service. Casual games, pre-roll spots Forrester Research reported some daunting experience confusion as the traditional TV and pop-up banners are now in the mix as well. numbers: format fragments into a dizzying menu of • 61% of consumers hadn’t even heard of programming choices and heterogeneous Though the pricing for TV ads has been connected TVs. micro-communities. traditionally pegged to an estimated audience • 27% said they couldn’t imagine why they’d size, the new wave of interactive ads often want a TV that connects to the Internet. Brands currently shell out three times utilizes a performance-based model similar to • 26% of people who owned connected TV as much for TV ads than they spend on online pay-per-click. This pricing model should said they don’t often take advantage of online marketing, even though the media effectively lower barriers to entry by marketers the Internet connectivity. consumption of today’s consumers is evenly looking to take the new technology for a • 20% of owners were very happy with split between the two mediums. Interactive TV test run. their connected TVs, but only 12% would ad spending is barely a blip in today’s market. recommend them to friends. Google TV, in fact, had no ads at launch time, In a related trend, online video ad-serving but more marketing dollars will be allocated platforms like continue to gain traction, We can sympathize with the disappointed
  • 66. 65 first-generation users. Surfing specialty promo channels on cable with your old-school TV remote really does not sound like a ton of fun. But major developments have occurred since the Forrester survey—the September second-generation release of Apple TV, the October debut of Google TV and the November launch of Microsoft Kinect. Kinect, the flagship peripheral suite for Xbox 360, is technically an add-on for a gaming console. But the hands-free, motion-sensing, face- recognition technology has serious potential to fundamentally change how we view television. Microsoft sold over 2.5 million Kinect units in the first month. Around the same time, word leaked that Microsoft had been talking to TV programming providers about launching a paid-subscription TV channel via the Xbox 360 console, which could create a new super- competitor in connected TV. As these technologies grow along with consumer expectations, we’re going to see some compelling new developments in interactive television. The tube is about to 178M By late 2010, online video content was being viewed by 178 million be reborn. Americans monthly.
  • 67. 60% Nearly 60% of TV viewers use the Internet while watching TV at least once a month. The Promise of Apps: “The coolest thing about Google TV is we don’t the coolest thing about Google TV and its even know what the coolest thing about it will competitors will be? Apps. Apps have the be,” came the pitch for the new service, now potential to truly revolutionize television, Third-Party Apps available on Google TV Logitech set-top boxes, the same way they changed everything Sony Internet TVs and Blu-ray players from brick- in mobile—setting higher consumer Anticipated for and-mortar stores like Best Buy. expectations, changing behaviors and media Google TV, but Apple All due respect to the geniuses in Mountain consumption patterns, accelerating uptake of new technology and creating unprecedented TV Slow on Uptake View, but doesn’t everybody already know what sales growth.
  • 68. 67 Nearly 60% of TV viewers use the Internet while Apple, surprisingly, has proven slow to TV shows individually for 99 cents an episode watching TV at least once a month, according embrace the full possibilities of its Apple and thereby jeopardize the sale of the same to Nielsen. This implies that our culture, in TV set-top box, which seemingly remains a shows to branded networks that pay hundreds many ways, has already moved ahead of the side project for the company, described as of millions of dollars?” Bewkes said. technology. We’re using the Internet and a “hobby” by Steve Jobs, after four years TV together. Why not do so on the same on the market. Apple TV2, unveiled in Television industry incumbents should be device? And, while we’re at it, why not use the 2010, allows users to watch iTunes content expected to be wary about these disruptive touchpads on our smartphones to change the on their televisions, rent shows for 99¢ from innovations. For audiences, though, it’s all channel and search for content? ABC and Fox and access Netflix, YouTube upside. Consumers will be able to custom- and Flickr, but it does not yet function as tailor their viewing choices and activities, Google TV ships pre-loaded with apps for a wide-open platform for third-party app updating their Facebook profile, for example, Netflix, CNBC, Twitter, Pandora, Napster and developers. We’re encouraged by the then changing “channels” to watch Grey’s NBA Game Time. Other Google TV media rumors, however, that the next-gen release Anatomy while tweets from their friends’ partners, such as HBO, NBA and Turner of Apple TV may offer app support—the stream in a news crawl at the bottom of Broadcasting, have developed dedicated online sooner, the better. In the meantime, hackers the screen. platforms for interactive TV programming. The are already touting their own custom apps opening of a Google TV app marketplace is for jailbroken Apple TVs. Given how much we now use web-based apps anticipated for 2011. on the 3.5-inch screens on our smartphones, Clearly, not everybody’s on board. Though why should we accept that the 36-inch screen Admittedly, first-generation Google TV lacks a he gushed that television was entering a on the wall would remain technologically inert certain artistry and ease of use with its interface. second golden age, Jeff Bewkes, CEO of and app-free? The search function does not always quickly Time Warner, nevertheless warned media or accurately return the right TV program execs at a London conference in September The connected TV is a portal into new when searching for a show, and the keyboard that lower-cost digital competitors like possibilities, placed at the most important controllers are clunky. People expecting an Apple and Amazon could erode the long- social locations in the home. The most elegant TV equivalent of an iPhone, or even an standing value of television programming. thrilling aspects of interactive TV extend far Android, have been disappointed. The design According to Hollywood Reporter, Bewkes beyond finding new ways to watch television and functionality should progressively improve railed against the Apple pricing model in programs. TV apps have the potential to in future releases, but there seems to be a big particular. integrate TV, web, search, video, social and opening here for competitors, say, a well-timed shopping. They’re going to rip the lid off the follow-up act from Apple TV. “How can you justify renting your first-run old paradigm.
  • 69. 56% Of the one-third of Americans who own a DVR, 56% fast-forward through commercials.
  • 70. 69 Socializing the TV Set Turning On and Tuning In Social TV companies are promoting mobile Aiming squarely at the mainstream, TVGuide. Television is indisputably a social medium. applications that add social functionality to com launched new check-in features in Oc- It’s the focal point of the “family room” in TV watching. They’re targeting the 200 mil- tober with simple buttons on its website that modern households. And for decades, work- lion people who already use mobile for social read “I’ll watch” for particular shows. The ers have gathered around the water cooler to communication like tweeting and Facebook feature is integrated with Facebook, allowing discuss their favorite shows. status updates. The future of social TV will be users to divulge their guilty pleasures or try apps that bring social alongside the set-top to impress each other by pretending to watch To help quantify the buzzing sociality of TV, box and display controls of interactive TV, but only high-brow PBS documentaries. Within consider these Twitter stats compiled by Fast for now, these sites primarily cater to audi- the first month, the site was receiving 10,000 Company: ences of traditional TV. check-ins per day. • There were 2.3 million tweets during the Social TV sites like Miso, Tunerfish, Philo and Still, some people insist TV audiences prefer East and West Coast broadcasts of the Starling give a hint of the possibilities. These to be passive. They don’t want to lean for- 2010 MTV Video Music Awards. sites appeal to “superfans” and are generally ward or, for that matter, strain their forebrain. • Glee, the most popular primetime series at their best when facilitating communication Instead, they simply want to sit back, relax on Twitter, was mentioned in 285,800 between friends viewing the same program and be entertained. But until quite recently, tweets on the day its Britney Spears epi- at the same time. By placing a premium on audiences have never been given an authen- sode aired. “live” experiences, connected viewing may tic opportunity to truly interact through their • In the immediate lead-up to the series offer clues on how advertisers can finally televisions. It’s always been a one-way me- finale of Lost, and the letdown that fol- overcome the audience attrition from DVR. dium. The theories of audience passivity are lowed afterward, there were over 400,000 Of the one-third of Americans who own a accepted only because they remain untested. Lost-related tweets over a 24-hour period. DVR, according to Nielsen, 56% fast-forward That doesn’t mean they’re true. through commercials.
  • 71. Start-up to Watch 70 Social Check-ins for Couch Potatoes What’s the stickiest mix of rewards? Described as the “single most useful social shark—in their social networks. GetGlue. networking tool” by Wired, com also generates suggestions for allows fans to check-in to TV shows, movies, what to watch, and provides links to like- music and books. You can even check-in to a minded “taste neighbors” who share your bottle of beer. In other words: location-based preferences. marketing for couch potatoes. The company has attracted a number of The 700,000 members of earn media partners, including FOX, Hachette, rewards, post reviews and find out what’s HBO, Penguin and Sony Pictures. A conversation with generating buzz—and what’s jumped the CEO Alex Iskold. Q: It’s been said that is like Foursquare or Gowalla for entertainment, but with one major differentiator—a really nice feedback loop. What does that mean? How does it work? A: includes not only the ability to check in, but also lets people build a taste profile and receive recommendations for new entertainment that they may enjoy.
  • 72. 71 71 Think of GetGlue as an amplifier or a router of entertainment Androids and iPads. The so-called “second screen” lends through the existing social plumbing. When a person checks in itself very well to providing customizable experiences for or earns a sticker, that message goes to Facebook and Twitter people to interact with the content they’re consuming. and reaches their friends and followers. Last night was the Dexter finale, and within two minutes, there were literally 1,000 check-ins A: Set-top boxes will eventually be collaborating with second- on GetGlue, reaching nearly a million people on Facebook and screen devices to authenticate check-ins. Over the next year Twitter in one shot. That’s a powerful mechanism. we’ll be seeing more integration. Q: Which is more important—game mechanics or good recom- Q: Are media companies and brands looking beyond the mendations? check-in for deeper engagement in social TV? A: That’s a great question. If the user input consists of a check-in A: Last weekend, a VP of Bravo TV flat-out stated in an article in or a “like” then the question becomes: how many delights and Mashable that the network has seen a 10% lift in ratings from rewards can we provide in exchange for that single action? Seeing social media. That’s huge. And all of the major brands we’ve your friends and what they’re doing is a form of reward. Receiv- partnered with are delighted with the numbers they’re seeing. ing recommendations, and official stickers from brands, and the discount attached to those stickers—there’s a spectrum of rewards For advertisers, the equation that’s about to be executed is that we provide. There’s not a single thing that appeals to everybody. incredibly interesting. Everybody who checks into an episode Recommendations can be a tricky thing. People don’t want to be gets a sticker; that sticker has a discount attached to it, and overwhelmed with suggestions. those rewards can be tracked and measured. You can find out how many people actually went and transacted. Q: Where, when and how will social TV—with its exploding array of mobile apps—meet interactive TV? Do platforms like Get- Q: You’re facing competition from Apple Ping, Miso, Philo belong on Google TV? and a range of new start-ups. What’s coming next for con- textual networks in 2011? A: Why can’t we just wire social into TV sets? Let’s say we’re watching a TV show together and there’s a button that brings up “friends.” A: If there is no competition, then there is no market. Our big- Well, is it my friends or your friends? Are we going to be signing gest play will be to have our partners embed our check-in in and out? It feels incredibly awkward. technology—and our reward and redemption engine—to be- come ubiquitous across every major entertainment channel. Q: Which is why the social TV space exists as apps on iPhones, But to cross the chasm, we’ll have to execute flawlessly.
  • 73. 72 Why the TV Networks Are Nervous Disruptive Innovation Clay Christensen, the Harvard Business disrupter. The company succeeded by taking incumbents. The new offering isn’t competing School professor who wrote the classic book an innovative approach in the declining against better-known alternatives in the same on disruptive innovation, has observed segment of tight-margin video rentals. Netflix category because the category itself is brand that up-and-coming attackers can prevail launched its subscription service in 1999, new. The only competition is non-consumption. against industry incumbents with two posted its first profit in 2003 and mailed In other words, the new technology is either central strategies—low-end disruption its two-billionth DVD in 2009. By 2010, adopted or it dies. and new-market disruption. Interactive TV the number one incumbent, Blockbuster, has elements of both, which is why the TV had declared bankruptcy and number two, Interactive TV is a new-market disruption, networks are nervous. Hollywood Video, was being liquidated. particularly when one considers the full search Recently, Netflix introduced a cheaper, functionality and web-browsing capability In the low-end scenario, large incumbents pure-streaming video service for consumers of Google TV. For all the talk about “cord- basically fall asleep at the switch, blithely who don’t want to receive any DVDs in cutting,” this technology isn’t a viable ignoring new entrants in the bottom segment the mail. In the process, they’re moving replacement for cable or network. It’s a of their core markets where returns, quality upstream into the profitable headwaters of new category. and demand are relatively minimal. What’s video on-demand, traditionally controlled the problem with mocking a competitor by cable networks. But instead of charging The zillion-dollar question facing Google TV for having a teeny-weeny footprint? If the inflated cable-industry prices, they’re offering isn’t whether people will ditch their current TV low-end offering improves and innovates unlimited streaming videos to consumers for service, it’s whether they really want to web at a fast-enough rate, it will gradually claim only $7.99 per month. access via their TV. If not, chalk one up for non- customers in the middle tiers of performance consumption. But if people want full interactivity and profitability, carving out the incumbents’ New-market disruption involves the from the biggest screen in their house, and we market from the bottom up. introduction of an innovative product or certainly believe they will, then interactive TV service into a new segment or emerging will gradually gain ground against the broadcast Netflix is a prime example of a low-end market that is not traditionally served by networks, particularly if they balk now.
  • 74. 73 73 Google TV could be the kind of parasitic technology that benignly feeds off traditional TV for a few years, then gradually grows big enough to swallow its host. Related hardware and services from Apple, Netflix and Roku are poised to join that feeding frenzy. The major networks seem to think they can inoculate themselves by blocking access, but as soon as Fox and colleagues quarantined their sites from Google TV, online tips for workarounds and “unblocks” were instantly circulated online by white-hat hackers. Limiting access isn’t the solution. If anything, networks will only hurt their cause by $120B disenfranchising consumers with annoying barricades to online content that’s freely viewable from any laptop. And if they really Brands are spending $120 think it’s a good idea to get into a shoving billion more annually on TV match with game-changers like Google, they ads than Internet ads, even should consult their media colleagues in the though consumers evenly magazine, newspaper, publishing and music split their time between tube industries. Immediately. and web.
  • 75. Q POINT OF VIEW What can brands expect from interactive TV in 2011? Interactive TV represents a hybrid medium where on-demand content and Web applications meet the biggest screen in your home—the television. Consumers with Interactive TV sets use built-in applications (widgets) to access content such as YouTube videos, Flickr photos and Pandora music, along with social media from Facebook and Twitter. Television set manufacturers have been eager to roll out interactive adopters are already vested. They are astute consumers with the high- est expectations, highest technology-specific investment and highest potential for engagement in the near term. They’ll be experimenting with the applications to figure out, essentially, what the new technology can really deliver. If their expectations and interests are fulfilled, these initial experiences will help shape mainstream consumer behavior of the future. TV (e.g., iTV or connected TV) with the hope that it would spark con- sumer demand like high definition did in years past. However, current Brands have an opportunity in 2011 to dip their toe into this medium barometer readings indicate that these smart displays are poised for and begin to experiment on a limited budget by turning to a set-top lukewarm interest at best among mainstream consumers. Research box, such as the Logitech Revue with Google TV. This device represents from Forrester has confirmed that approximately 40% of users who an alternative component within the typical home entertainment center, own interactive TVs either failed to connect their TV to the Internet or and in many cases, consumers who want interactive TV will opt for such connected their display yet failed to use this feature. a device rather than replacing their TV display. This is particularly true for the most tech-sophisticated crowd, who may be in no hurry to ditch While the mainstream consumer may be out for now, early technology their traditional, expensive, 42-inch, high-definition displays.
  • 76. 75 Tomer Tishgarten vice president of technology FOLLOW TOMER ON TWITTER @TOMERIFIC OR ON HIS BLOG ALLTHATIKNOW.COM The Logitech Revue is powered by the popular Android mobile operating systems. Developers that have built mobile applications will be able to technically repurpose them once the Google TV software development kit is available. When Google rolls out the Android Marketplace in early 2011, marketers and developers will finally be able to deploy their custom applications and fully experiment with this technology. Additionally, Apple is expected to follow suit by expanding support for third-party iOS apps on their Apple TV device. By jumping into this category in 2011, with apps and related media like interactive social and video content, brands have serious potential for high-visibility impact in this much-watched space. Marketers can bring a creative touch to the technology, delivering eye- popping content that unleashes the exciting possibilities of the new medium. Technology consumers, manufacturers and the media are all waiting for the true innovators to step forward.
  • 77. 02 SECTION 76| Innovate Looking ahead to 2011, we’ll see some exciting developments in AR marketing as the technology moves from the desktop to smartphones. Augmented Reality
  • 78. 77 The Digital Enhancement Spaces of Public Augmented reality, enhancing our natural intersections as you virtually cruise the consumers find their nearest sandwich shop view of the world with overlays of digital photo-documented downtowns of online while adding whimsical touches to the local information, sounds like a scenario from a cities. More recently, Microsoft unveiled eye- landscape, including 3D animations inside sci-fi film where the ultracool anti-hero wears popping new AR features for Bing that turn Yankee Stadium. neural chip implants and hi-def eyeglasses online maps into truly interactive 3D worlds while speeding through the cybersprawl. featuring live video feeds, indoor views taken These developments lead us to consider But you don’t need to wait for the straight- with a backpack camera and overlays of some provocative questions about the to-DVD release. Although it might sound georegistered images from Flickr. Users can monetization of public space. What if Quiznos like a fantasy from the far-off future, the era dramatically swoop from street view to aerial, superimposed its AR ads over nearby Subway of augmented reality has already, in fact, flying like a disembodied avatar over a Sim shops? What if the Yankees plastered virtual begun. And it’s finding resonance, as well as City-like landscape. billboards across the left-field wall at Fenway some interesting applications, with marketers Park in Boston? Building virtual perimeters, hunting the next new trend. Looking ahead to 2011, we’ll see some known as geofences, has been suggested exciting developments in AR marketing as as one possible solution, which, incidentally, You’ve seen first-generation augmented the technology moves from the desktop could also be used to automate check-ins reality (AR) in televised football games— to smartphones with applications such for location-based apps. Although, who will that yellow first-down line isn’t actually as Tagwhat and Layar. Tagwhat allows decide the size and orientation of your digital on the field, glowing in the grass, it’s a users to create and share location-based fence’s footprint? What kind of surveyor digital overlay to enhance the live viewing messages by “tagging” physical buildings do you hire? And what’s the penalty for experience. Similar applications have been like a GPS-enabled graffiti artist. Layar is trespassing across virtual borders? Anticipating popping up on the web. Two years ago, an augmented reality browser that allows that these kinds of questions will eventually for example, Google introduced interactive iPhone and Android users to stream multiple land litigious competitors into real-world links with ad-functionality for retail stores, layers of localized digital information onto courts, Pillsbury Law Firm recently established restaurants, museums and other venues their touchscreens while their phones are a specialized “virtual worlds” practice to within its panoramic street-view maps, in camera mode. Quiznos teamed up with provide legal counsel on AR issues. So far, few highlighting local businesses and labeling Layar last year to develop an app that helps precedents have been established.
  • 79. Ditch the Desktop with AR Show the Way Early Experiments Ecomagination, the green technology unit AR promo for its show with street magician That’s why as AR converges with mobile of GE, was the first to really get the main- Criss Angel, which presented 3D mazes and we’ll see category leaders keep a concerted stream buzzing about AR with its web-based puzzles for fans to solve with their webcams. focus on utility. U.K.-based grocer Tesco, for Smart Grid Augmented Reality, built with Papa John’s used pre-printed pizza boxes example, developed an app that transforms open-source FLARToolKit, which merged live as markers for a “virtual drive” tie-in to its iPhone owners into instant wine buffs. Shop- video with Flash and 3D animation. At-home multi-channel Road Trip campaign. Esquire pers simply use their phones to photograph users printed a sheet of paper, known as a magazine produced an AR issue in which a bottle of wine and submit it electronically, “marker,” held it up in front of their webcam Robert Downey Jr. jumped off the cover onto then they receive details on taste, vintage, and when they looked on screen, they saw your computer screen. varietal and food pairings. Technically, you’re an animated 3D hologram landscape with GE right, that’s not AR, but it intimates the wind turbines rotating between their hands. Though mobile and location-based apps extraordinary possibilities of what’s to come. Geeky, but quite engaging. have a promising future, particularly for If the Tesco wine app incorporated live-video fashion, entertainment, education and AR functionality, it could potentially cut out Other brands subsequently took the tech- food, the buzz has already cooled for many the time-consuming middle steps (shoot- nology in different directions. Wise Foods desktop-based AR marketing applications. ing and submitting photos) and create an pursued the social networking possibilities The print-and-wave markers proved to be automatic point-and-tell information service. of AR with a web-based contest for Cheez too much work—with too little reward—for And for marketers, that kind of functionality Doodles that awarded prizes for the most most consumers. Desk-based AR experiences would open the door to a whole new dimen- popular user-generated music videos featur- rarely offer a tangible value beyond the fleet- sion—an augmented world of everywhere ing animated “Cheez Dudes.” A&E Television ing thrill of a slick new gimmick. engagement. Network took a game-based approach in an
  • 80. 79
  • 81. 80 Create real meaning in the lives of consumers— and growth for your brand. 03 SECTION Relate
  • 82. 81
  • 83. 82 SECTION 03 82| Relate Facebook usage accurately predicts our level of narcissism and self-esteem. Narcissism:
  • 84. 83 In a NationWhere Do Brands Belong? of Narcissists Preening, performing, touching-up our profile photos status updates and strike poses in self-promotional and eagerly finding out what other people are saying profile photos, according to research by Canadian about us—psychologists have confirmed that Facebook academic Soraya Mehdizadeh recently published in usage accurately predicts our level of narcissism and Cyberpsychology, Behavior and Social Networking. self-esteem. Social media isn’t a prism; it’s not distorting Online activities like photo-sharing and wall postings in offline reality. Rather, it’s more like talking through a the Facebook accounts of college students at Toronto’s two-way mirror. Partially reflective, partially transparent, York University were analyzed against psychological it reveals our true inner selves and how we hope to be assessments of self-importance. Narcissists, not perceived while showing us where we stand in relation to surprisingly, showed a pervasive pattern of grandiosity, everybody else. posting self-inflating boasts (“I’m so glamorous I bleed glitter!”) and links like “My Celebrity Look-Alikes.” For brands to be an important part of that picture, marketers need to understand the evolving relationship That doesn’t mean that everybody who spends several between social media and self-absorbed consumers. hours a day on Facebook is a textbook narcissist— They also need to realize that the rules for brand behavior craving admiration, lacking empathy, pursuing superficial are different. Though this may be a nation of narcissists, relationships and short-term gratification. In fact, the brands that talk incessantly about themselves will end research suggests that people with low self-esteem are up in an isolated corner of cyberspace. That’s the golden also more likely to congregate there for long periods of rule, and, yes, it’s a bit of a double standard, but it makes time, perhaps because the online network gives them perfect sense when you consider the sociological and more control over how they present themselves. And, of psychological factors in play. course, anybody who’s familiar with teenagers can tell you that basically everybody in Gen Y—narcissist or not—is Narcissists are more likely to spend more than an hanging out on Facebook all the time, from beautiful girls hour a day on Facebook, brag about themselves in with big egos to the shyest of pimply guys.
  • 85. Q POINT OF VIEW How can brands stay relevant to consumers today? In order for a brand to become “social” and do so in a meaningful and relevant way, brands must get beyond thinking and defining themselves solely as a set of product benefits. Why? Because product benefits are a short and uninteresting topic for social conversations and they certainly don’t add any badge value or meaning to the brand that makes them “like-worthy” to our Branding today requires a new approach—an approach that doesn’t start with a proclamation about what we are or how we want consumers to feel about us, but with an understanding of consumer culture and the cultural meaning that surrounds the consumption of our brand. Branding is no longer done from the inside out; it works from the outside in. Letting the values, beliefs and attitudes narcissistic and in-control consumer. of consumers shape and define our brand so that our positioning doesn’t just create category relevancy, but cultural relevancy. Today, in a world of over-choice, where product benefits and features are quickly and easily copied by competitors and where buzz terms This is a big and necessary shift in the way we approach branding. like social, dialogue and interaction have replaced the safety of simply Letting consumers define your brand makes for more relevant sending out ads into the market, the whole notion of positioning connections and increases the meaning of your brand in the lives a brand upon its unique space within a category has become as of consumers. It takes us beyond the package and product to a antiquated as defining a cell phone by its ability to make a phone call. positioning that allows brands to become alive and infinitely more
  • 86. 85 David Grzelak executive director, brand planning READ DAVID’S BLOG AT DAVIDGRZELAK.COM interesting in the day-to-day lives of consumers. The minute we, as marketers, put ourselves in the context of a category, we immediately limit the usefulness and meaning that our brand can have in the marketplace. We reduce ourselves to features and attributes, but thinking of our brand through the lens of consumer culture opens up an endless source of inspiration and imagination. So while we may see narcissism in the behaviors of consumers in social media, we, as brands, must let go of ours. Nothing good comes out of a conversation between two narcissists, and it may just be time for brands to replace our narcissism with a little bit of humility and finally recognize that consumers do, in fact, define and own brands.
  • 87. 86 SECTION 03 Relate Social Coding of Sophisticated Teens Did you know it’s now considered conceited Facebook users are aged 45 or older—the What Marketers in many teen social circles to use an image of yourself alone as your Facebook profile photo? front lines of cultural-technological change are predominately filled by the young. This is, Can Learn Even though young digital natives have earned a reputation as the “entitlement generation,” ultimately, their world. The rest of us are just visiting. there are apparently some social limits to their unabashed self-regard. “While the practice The Gen Y relationship to brands is part of the of putting up photos with friends originated shifting online paradigm. When young people as a safety mechanism, it’s now considered a choose to “like” a brand on Facebook, they’re social signal that you are sociable,” explained essentially putting on a badge that helps Dr. Danah Boyd, senior researcher at Microsoft define them among their peers. Online brand Research, at the International Conference of fandom can be viewed as a performance, part Data Protection and Privacy Commissioners. of a carefully calibrated process to craft and project a personal identity that transcends There’s compelling evidence that the up-and- public and private selves. coming cohort of young Americans has grown increasingly sophisticated in navigating the “Even when people really lock down their 20% public-by-default scene of social networks. privacy settings on Facebook, one of the These developments bear close observations things they don’t hide is what brands they Only 20% of Facebook by marketers and advertising agencies. like,” explained Peter, one of our college-aged users are aged 45 or Though social media has expanded well interns whom we regularly interrogate on Gen older. beyond the youth demographic—20% of Y social protocols. “I know it sounds
  • 88. 87 50 The average teen sends or receives 50 text messages daily while the average adult sends ten.
  • 89. 88 The buying clout of Gen Y consumers could surpass all previous generations.
  • 90. 89 superficial, but if I see a girl likes three or four future employers in the dark. This doesn’t Dr. Boyd observes, these teens tend to brands, I pretty much know who she is—or at mean they’re scrubbing every detail from protect their Twitter accounts, making them least, I can tell if we’re going to click, if we’ve their public personas. Dr. Boyd, addressing accessible only to a subset of friends. This got a chance. If she likes J. Crew, right? Or, the international convention on privacy and also relieves them from too much traffic on like, Old Navy? That says a lot.” data protection last October, explained: Facebook. She quoted one teenager she’d “Teens turn to private messages or texting interviewed: “Facebook is like shouting in Conscious brand identification can be or other forms of communication for intimate a crowd, Twitter is like talking in a room.” exercised online by older folks, too, but the interactions, but they don’t care enough This seems counter-intuitive to the many critical difference is that teens appear more about certain information to put the effort marketing professionals who use Twitter to naturally attuned to the subtlest of social into locking it down. But this isn’t because broadcast messages to the broadest possible signals online. Having been raised in the they don’t care about privacy. This is because audience, but then again that’s why we digital slipstream, they’re highly sensitive to they don’t think that what they’re saying pay close attention to teenagers. They’re its shifting currents. That’s both good news really matters all that much to anyone.” innovative. and bad news for marketers. On one hand, positive and public brand associations can When it comes to preferred Given their numbers—82 million Americans generate significant value for brands. But, were born between 1980 and 2000—and on the other hand, as the industry moves channels of private their reputation for strong opinions, the inexorably toward more sophisticated communication, American buying clout of Gen Y consumers could behavioral marketing, there are signals surpass all previous generations, which is why that teens are adopting practices to remain teenagers are text obsessed. today’s tweens, teens and twentysomethings unknowable and inscrutable. The average teen sends or receives 50 text are being studied, surveilled and analyzed messages daily, according to Pew Internet. by governments, corporations and computer One of the ways that teenagers have Over 30% of teens send more than 100 texts, algorithms. As they grow older and gradually adapted to the open social architecture and 15% send more than 200. (The average become more aware of these prying eyes, of online networks is by increasingly adult sends ten.) their public presence and behavior on social coding their public messages in private networks will inevitably change. Brands will language—song lyrics, personal jokes—that’s Interestingly, Twitter is now emerging as a need to look beyond themselves, and even decipherable only to those friends who are favored channel for private communication outside their category, to keep pace and the intended recipients of the message. This among the most popular and tech- maintain cultural relevance with this fast- “social coding” can effectively keep nosy sophisticated teens in high-income American moving crowd. parents, college admissions officers and communities. In contrast to Facebook,
  • 91. Q POINT OF VIEW Is social media amplifying an aspect of human nature that mass media didn’t activate? If every person wants to be a brand and every brand wants to be a person, where does that leave marketing? What does it say about our culture that young girls want to become celebrity brands like Miley Cyrus, while companies and products are competing to be our friends? Brands were once the cornerstones of consumer culture, but with the face it, though, brands are lucky consumers let them in to the party in the first place. Rather than barring the door, they’ve brought brands into their social scene. They’ve taken us inside their houses, they’ve shared their thoughts, they’ve expressed sincere interest. We may be living in a nation of narcissists, but consumers are actually encouraging brands to behave more like people—in other rise of social media, consumers have increasingly subsumed brands. words, more like them. They’re now the producers and the consumers. Brands are sidelined to serving “content,” which, sadly, makes marketers sound like caterers— People have always projected—we put on our best face in public. ferrying drinks to VIPs at a cocktail party, desperately hoping everybody But that kind of social projection used to happen in private likes the appetizers. encounters, smaller settings. It wasn’t mediated. The message wasn’t packaged and broadcast across global networks like Twitter Advertising, long acknowledged as both tastemaker and toastmaster and Facebook. People weren’t building their own personal brand. in American culture, is now mostly a facilitator. It’s the hired help. Let’s They weren’t marketing themselves.
  • 92. 91 Patti Ziegler chief marketing officer READ PATTI’S BLOG AT PATTIZIEGLER.COM Jacob Lewis, co-founder of teen literary social salon, observed that in the past there was no expectation that famous authors would correspond with their readers. “That’s not true now,” says Lewis. “There’s been a fundamental shift. When kids today interact with the authors they love, they expect a response. They demand a response. Reading isn’t a passive experience for them; it’s a social one. People want to participate.” Which means it’s a mistake to get too preoccupied with notions of narcissism, because there’s also a brighter side to this paradigm—a vibrant culture that finds value in creating and contributing, not just consuming. Brands aren’t celebrities. They’re not people and they’re not peers. But they can be very useful friends. And that’s worth considering in this new creative context. There’s a party going on—now get back to work.
  • 93. 03 SECTION Relate The Future of Metrics and Analytics
  • 94. Moving Beyond the Black-and-White Binary of Social Metrics Marketers searching for meaningful metrics is an acknowledgment that successful in social media should consider the view measurement begins with strategy. Marketers from Wall Street, where innovative firms at companies with a social media strategy in are data-mining online news sources— place are twice as likely to report that their including blogs and tweets—for market initiatives are producing quantifiable profits, insights and aggregate sentiment on public according to survey data from R2Integrated companies that can drive profitable stock- released in April 2010. They were also trading strategies. A third of quantitative more likely to have a dedicated staff for trading firms are now using or exploring social media. these “unstructured” data feeds—up from 2 percent two years ago—according to figures Even for brands with a social media staff, cited recently in The New York Times. So if the sheer quantity of online mentions often some robo-trading hedge fund can generate exceeds what can be eyeballed on a daily hard profits from your brand’s social media basis. Marketers are already using automated presence, then why can’t your marketing tools to quantify buzz. In 2011, the options department work the same magic? Why can’t will expand, with a host of new and valuable they make heads or tails of the data? metrics emerging. Today there are two primary methods most companies use to Today, only 15% of companies are actively evaluate their social media initiatives. The first measuring the profitability of their social is a simple assessment of activity: tracking media efforts, according to a recent study the total number of friends, fans, likes, from SmartBrief. A lack of ROI-related metrics retweets, etc. The second involves a two-step are frequently cited as a stumbling block evaluation of brand mentions and sentiment: for social marketing, and an impediment counting all comments made about brand in to serious budget commitments, but blogs and social channels, then categorizing what’s often missing from that conversation them as good or bad. In both cases, the
  • 95. methods and metrics are quite rudimentary. of the measurement process. By some Community managers who are tasked with They can tell marketers how many people are estimates, around 40% of posted comments tracking online buzz are likely to seek positive talking about the brand, but they don’t truly fall into a neutral category—neither fully affirmations—whether intentionally or convey what’s being said—or why. good nor bad—where meaning can’t be otherwise—because if consumers are upbeat harvested automatically by most programs. about the brand, that suggests that the Brands need more than a simple binary Computers have trouble translating certain community manager is doing a good job. assessment of good or bad when evaluating kinds of expressions like sarcasm and jokes. Beyond bias, there’s also an issue of tonality. If consumer sentiment is trending Tongue-in-cheek compliments, for example, misplaced effort. Marketing teams respond negative, companies need to know the can be inaccurately categorized as positive to what can be measured. This can become a nature of the problems before they can mentions. Data doesn’t lie, but that doesn’t serious liability when metrics are misaligned improve the situation. Similarly, brands that mean data is always telling the truth, either. with business strategy. One of the chronic score positive should find out what it is, Subjective judgments require human problems with using activity quantity (total exactly, that they’re doing right. Machine- analysis. Software might produce a word number of likes, friends, retweets, etc.) as a reading technologies that effectively sort and cloud or a ranked list of terms associated proxy for performance is that many digital translate massive amounts of unstructured with sentiments (positive or negative) about marketers have become desperate to data—reading comments, interpreting your brand, but the subsequent decision- generate activity—any activity without regard emoticons, analyzing intent—were once making and prioritization process requires to brand relevance. Pop culture references limited to the military and intelligence a manager, not a machine. and topical questions can sometimes be communities. More recently, however, useful to kick-start conversations, but lately, companies such as Crimson Hexagon The marketing team at a grocery chain, for far too many brands on Facebook have been (see Q&A on page 102), Lexalytics and example, would immediately recognize that asking, “How was your weekend?” That’s Clarabridge have developed commercial 100 wall posts about food poisoning are like asking, “Hello? Anybody there?” There text-analytic tools that can dramatically more important than 10,000 “likes” about needs to be a balance between relevance and enhance the ability of digital marketers to a redesigned produce section. A computer activity, brand equity and chat dynamics. Yet derive meaning—and capture marketing can’t be depended upon to make those brands today rarely measure relevance. ROI—from the social web. kinds of calls. Even though people are critical to the measurement process, they’re also In 2011, brands must refine social strategies Though the tools are improving, social media commonly a source of conflicts. People by utilizing more sophisticated technology analysis will never be completely automated. introduce a significant amount of bias into tools for social metrics, while simultaneously People remain an essential component the equation. building a deeper bench of social analysts
  • 96. 95 35% of marketers believed their social media initiatives were actually making money while the majority reported that social media was “invaluable” to their company’s success.
  • 97. 96 with an objective vantage who are separate limitations of survey-based market research Yet only 15% of companies are actively from but integrated with the staff creating was that marketers only received answers measuring the ROI of their social media content and managing communities. Many to their specific set of questions. In social efforts, according to a recent study from companies will continue to rely on external media, there are no such constraints. There SmartBrief. Many companies overlook the partners for now, but these resources will are no questioners. People are just talking. essential first steps of establishing what increasingly be brought in-house by both The answers are simply there, unsolicited, they’re trying to accomplish and how, brands and agencies as the technologies and open-ended. For the first time, marketers precisely, future performance will be gauged. methodologies mature. can parse what’s really going on in the heads Others come up with key performance of their consumers, because the consumers indicators (KPIs) that reflect no real value, Creating social media campaigns with impact themselves are essentially “mindcasting” then waste further resources by monitoring requires brand leaders to move beyond their innermost thoughts and preferences. their activity. rudimentary metrics. It’s time to change But to fully capture that information, what we measure. Social media data isn’t they’ll need to continually hone their A lack of ROI-related metrics are frequently binary. It’s not simply numbers, but raw and methodologies and technological tools. cited as a stumbling block for social media, unstructured conversations spilling across the as well as an impediment to serious budget open-ended web. Moving beyond the black- Setting a Strategy commitments, but what’s often missing from and-white binary tonality of good-versus- that conversation is an acknowledgment that bad will clarify the data. In the future, social Launching a successful brand presence on successful measurement begins with strategy. measurement will track directly to purchase a social networking site sometimes feels Marketers at companies with a social media behaviors, becoming more actionable and like striking oil. There’s an initial geyser of strategy in place are twice as likely to predictive. We’ll discover to what degree activity—a surge of new friends, fans and report that their initiatives are producing people’s comments actually correspond to followers—causing great excitement after quantifiable profits, according to survey buying activity. months of exploration and experimentation. data from R2Integrated released in April But then the hard work begins. To truly 2010. They were also more likely to have a This shift in transparency into the path to capture the value of social media, you dedicated staff for social media. purchase represents a significant advance in have to carefully extract and refine it. It marketing research. It is a radical upheaval requires patience, preparation and foresight. and requires a change in even the most basic Otherwise, you’ll be left with a big messy of marketing practices. In the past, one of the reservoir of untapped resources, buried beneath the online substrata.
  • 98. 97 The Direction of Future Metrics So what to do if you are among the 85% of companies not actively measuring the ROI Given the rapid innovation of online comes with huge responsibilities—and a lack of social media campaigns? We suggest the technology and mobile platforms, new of accepted industry standards. Reported following: sources of data are showing up all the missteps at Rapleaf and elsewhere, and time. Marketers are just beginning to pay signals that the federal government may Conduct a Social Audit attention. intervene, suggest that the Wild West days Evaluate internal resources, past of behavioral marketing may be short-lived. performance and future objectives, as • Set-Top: Interactive TV is a burgeoning In the meantime, there’s a treasure trove of well as the social presence and activity of space that could drive the efficacy and emerging data. competitors. This is the key to identifying extend the life of traditional TV advertising. priorities, benchmarking previous efforts and Moving far beyond basic measurements • Influence: Companies like Klout are planning for the future. of audience size, marketers will be able to attempting to quantify the social influence map a more comprehensive viewer network, of specific individuals, which raises a critical Establish Metrics and Stick to Them not just who’s seated together in the family question for marketers: Who are the people I There is an evolving suite of metrics room, but everybody they’re connecting with really want to target? Marketers may discover used to evaluate social media. A brand outside the home. Simple counts of “open that targeting 300 key influencers can be must customize this arsenal to reflect the eyes” could be replaced with sophisticated more effective, in certain circumstances, organization’s broader business goals and a metrics for active hands. than a mass-market pitch for 300 million. formalized plan for social media analytics. Moreover, companies that are concerned by • Social Net: Gone are the days when the online morphing of their brand identity— Metrics Can’t be Passive marketers were forced to imagine their and the lack of control in social channels— Performance targets should be set ideal consumer target as a composite of may be able to recruit opinion-makers within before launch and internal progress and generalities. Today, companies have the the community to drive the conversation. external developments in the social space capacity to build a comprehensive “social should be monitored continuously. Reporting graph” of real customers that combine social These new tools are constantly evolving should include weekly updates on time- insights—from sources such as Facebook and measurement options can be extremely sensitive issues, as well as monthly and annual and LinkedIn—with offline data ranging from confusing. Finding an experienced advisor reports reflecting the full scope of metrics and loyalty cards to income level and residential capable of vetting partners—sorting the social score, comparing month-to-month and neighborhood. They can create dossiers that semantics guys from the natural searchers—is year-to-date changes. reflect deeply personal insights to guide often an important first step before choosing brand strategies. This new power, however, a solution.
  • 99. Q POINT OF VIEW What social media metrics matter today for brands? As an industry, we’ve spent a lot of time asking ourselves: What’s the value of a Facebook friend? But that’s always been the wrong question. And, ultimately, an impossible one to answer. The necessary and logical questions to ask instead are: What is there to readership figures or viewers of a TV show. And just like those metrics, it doesn’t speak to impact or relevance. It indicates audience. And just like the mass market of the distant past, Facebook’s aggregate audience is massive. It reached 70% of the U.S. Internet audience in learn in the social media space? And how can we use this knowledge 2010, up from 48% in 2009, according to a recent report by to create more meaning in the lives of consumers and, therefore, J.P. Morgan. value for a brand? As with any technological innovation, especially those accompanied by a radical shift in social and cultural norms, And yet we remain essentially toddlers in the social media space figuring out what it all means for marketing practice doesn’t happen when it comes to metrics. The only thing we’ve figured out is how to overnight. Yes, fans are a measurable outcome, but not necessarily count things. We need to move from talking about X or Y brand being the best metric. Fan counts are simply what is available. Marketers mentioned 10,000 times to “what did these consumers actually say?” gravitate by habit to these measurements because they are similar to It’s essentially a move from quantitative to qualitative data analysis.
  • 100. 99 Scott Hildebrand chief consumer relationship officer We are at a very binary stage, asking whether something is good or bad. We must move on to intent. There is a richness in social conversations that brands need to tap. The future will be dashboards that will tell you how well your social media performed in terms of activity. We will get to the point where we will be able to gauge how well a social campaign performed in terms of brand perception. Once we understand how brands are perceived, we can start to alter those perceptions and drive category growth or a brand positioning against a competitor. And that’s certainly not counting or a superficial indication simply of popularity or buzz. That’s where analytics must improve—linking an individual with their ability to drive actions that create value for a brand. It’s an uphill climb, but we will eventually arrive at that level of granularity with our analytics.
  • 101. Best Practices 100 For Strategic Brands Building brands in emerging social and digital platforms isn’t just about leveraging new technology. Successful companies, even when only experimenting, begin with a business objective. Start here, but consider these other best practices: ALIGN WITH OFFLINE METRICS. MEASURE PROGRESS, NOT PRES- Consider the consumer-oriented ENCE. Success depends on much metrics your company uses outside of more than just “showing up.” Performance social media, particularly those that dif- targets should be set before launch and U.S. Marketers Who Believe ferentiate your brand from its competitors. reflect reasonable but aggressive goals. Their Companies Have Profited There’s not always a one-to-one match, of Progress should be tracked against internal from Using Social Media course, but ultimately your digital pres- benchmarks and competitor activity. Leading ence should map as closely as possible companies in other brand categories may to the brand’s core strategy and tactical also serve as a useful point of comparison. positioning. April 2010 SHARE RESULTS INTERNALLY. COLOR, NOT BLACK AND WHITE. Weekly updates on time-sensitive Companies often start with a binary, issues should supplement monthly and annual black-and-white assessment of sentiment progress reports, comparing month-to-month YES 65% NO 35% tonality, counting up “positive” versus and year-to-date changes. Marketers with a “negative” mentions on Twitter, Facebook, traditional mindset may harbor skepticism on blogs and other social channels. That’s not the meaning behind certain measurements, a bad place to start, but more sophisti- but silence won’t improve that situation. The cated analyses are now possible, such as science of social media metrics is still matur- wants/needs identification and measure- ing, and an open, ongoing discussion can help Source: eMarketer ment of purchase intent. brands move forward while refining their focus.
  • 102. 101 BEHAVE RESPONSIBLY. Behavioral Main Obstacle to Implementing a Social KEEP A FEW HUMANS IN THE LOOP. marketing represents a Pandora’s Box of Media Strategy According to U.S. Automated web analytics are advanc- Marketing Professionals ing rapidly and can now provide sophisti- new metrics and data sources. Industry cated real-time analysis of raw, unstructured, self-regulation has not been fast or aggres- social data. Yet even the most “intelligent” sively enough to satisfy government regulators, software can’t accurately crunch conversa- partly due to the fact that there are many new ac- 9% tions, jokes and cultural references. The tors that are not members of the mainstream and Source: eMarketer qualitative perspective of real people can be are therefore outside of the influence of the trade 12% essential for capturing and comprehending associations. With a multitude of social metrics 35% the full richness of social data. companies now entering the market, brands are strongly advised to conduct due diligence on 21% CONSIDER NEW AND EMERGING potential partners. METRICS. Sources of consumer-orient- 23% ed data have proliferated as digital technol- AUDIT PAST PERFORMANCE. For many ogy rapidly evolves. From social influence companies that have already established scores to interactive TV set-top data, innova- a social presence, there’s no clear strategy and, tive companies are finding productive ways accordingly, performance evaluations track Can’t develop a compelling business case to make the most of these new metrics. only the softest and most generic metrics. A Social not part of strategic roadmap social audit will determine whether you’re on Believes audience not active on social media the right track—and allow you to redefine what markers are used to measure your progress. Getting buy-in from senior management Not enough data to develop ROI
  • 103. 102 Start-up to Watch Sophisticated Tools Intelligence for Social Can machines translate consumer sentiment? With technology developed at Harvard’s Insti- what contributes most to brand equity or the tute for Quantitative Social Science, Crimson bottom line. As CEO Scott Centurino points Hexagon provides social media analysis and out, it’s essential to grab the most relevant real-time reputation monitoring for agencies, numbers from the datastream, and let the rest brands and media outlets. They’ve developed flow past. sophisticated capabilities beyond first-genera- tion “buzz” tools to isolate meaningful signals The company name alludes to a 1941 short amid the background noise, helping marketers story by Jorge Luis Borges, The Library of A conversation with learn how consumers really feel about brands Babel, in which the crimson hexagon is a hid- CEO Scott Centurino. and competitors. den room with a magical book that serves as a translation key for all the books in an infinite Crimson Hexagon consistently seeks to find library. The Cambridge-based company’s algo- and refine robust ROI-based metrics for social rithms perform a similar function—compiling, (Disclosure note: Engauge partners with campaigns. Founded in 2007, they recognized crunching and clarifying sentiments that would Crimson Hexagon to provide analytics services to its clients.) years ago that what’s easiest to measure in otherwise remain indecipherable and lost in social networks doesn’t always correlate to the digital babel of social media.
  • 104. 103 Q: What metrics should brands be watching in social media? Q: Is it possible to automate social media monitoring—and, if not, why not? A: Brands should be focusing on the metrics that map to their existing consumer-focused metrics outside of social media. A: Purely automated social media monitoring is possible, but Not all consumer metrics will have a direct match, but with real analysis requires human-directed automation solutions to the right tool(s) it is possible to get to a wide and nuanced produce usable data and insight. No technology can “proac- range of insights. For example, Crimson Hexagon has cus- tively” automate human judgment, and without that judgment tomers looking at measures of purchase intent, consumer- in the mix, one should be extremely cautious about how one driven promotion activity and wants/needs identification. Of uses such purely automated solutions. However, a solution that course, brands will often still start with mention volume and does allow the human element in the analysis while still provid- basic tonality of sentiment, but we caution our customers to ing robust automation can deliver on the promise of Social make sure that they are analyzing only (and all of) the relevant Intelligence and be used to guide strategic decision making, volume for their analysis. both in the social channel and, more importantly, outside it. Q: What does social media mean for the future of consumer Q: What is the future of digital analytics in 2011? And be- research? yond? A: Social media is already becoming an important data source for A: In 2011, we see brands demanding a move beyond mention- consumer research, based on the incredible advantage that counting and simple sentiment to more sophisticated and comes from having raw data already available for analysis on a contextually relevant analysis. We like to refer to this as the moment’s notice. This allows for faster, more efficient research move to Social Intelligence. Conversational volume and tone that can be performed iteratively. The unsolicited nature of this are a good start, but getting to the why behind them is how data also makes it increasingly attractive to those looking to real business value is achieved from analyzing social media. uncover real consumer insights. Forward-thinking brands and Beyond sentiment drivers, measuring motivation and inten- agencies already use Social Intelligence to produce accurate, tion creates the opportunity for the use of social media as more immediate results than traditional research. As the state a leading indicator of business performance. Social media of the art of social research advances, we fully expect to see analysis providers will also increasingly promote their growing increasingly creative combinations of social and traditional geographic and demographic capabilities. research drive consumer research to a whole new level.
  • 105. 104 03 SECTION Relate Consumer Trust What We Did and Didn’t Learn in 2010 Gaining, and retaining, consumer trust will Take one widely cited stat from the Edelman 21% become a make-or-break proposition for Trust Barometer, parroted in Ad Age, digital marketing campaigns in the year eMarketer and elsewhere: Peoples’ trust ahead. The fundamental currency of social in their friends and peers fell by nearly Only 21% of online media is, and will likely always be, trust. 50% between 2008 and 2010. According Americans believe comments posted on Online friends, fans and followers lend to this poll, more people trust radio news websites are generally valuable context and credibility. Brands with (27%) and newspapers (26%) than their own trustworthy. Nevertheless, earned media channels bank on consumer mothers. Apparently, only 25% of Americans 46% consider user- confidence in the opinions of peers. considered “people like them” to be credible generated content to sources of information on a company. This be a useful source of information. Recent surveys on the subject, though, fail doesn’t square with common sense (We love to instruct. There is no single gold standard, you, mom). instead marketers find an erratic, speculative, freakonomic mess. Comparing apples to By contrast, a recent study by Harris oranges, skewed survey-based reports with Interactive found that conversations with provocative hooks on privacy and trust have friends, family or co-workers were considered Trust been bouncing around the blogosphere useful and trustworthy by 93% of American and Twitterverse. The data is often sliced Internet users. This certainly sounds more and diced to fit a preconceived narrative. believable, but it’s hard to be sure who’s got For marketers, the takeaways are often too the story straight when there’s such a huge conflicting, confusing and counterproductive. disparity—a gap of nearly 70 percentage
  • 106. 105 According to one poll, more people trust radio news and newspapers than their own mother. points!—between poll numbers on the same For brands, the best way to really learn by default and extra effort is required subject. about trust isn’t by sending out surveys, to keep messages private. Social media it’s by starting authentic conversations with represents an abrupt and dramatic shift The definitions of trust, transparency and consumers in their natural habitats and from traditional modes of communication privacy vary greatly between different making careful observations about how their for brands and consumers alike. It’s people, leaving survey questions, answers beliefs actually inform their behaviors. That’s changing the way we structure, prioritize and results widely open to interpretation. the key lesson from the Columbus Project, and publicize our relationships. And as a These terms may signify nothing, or anything an Engauge ethnographic research initiative culture, we’re undergoing a progressive at all, without situation-specific context. that has been tracking media and purchasing reattunement on the critical issues of trust People often struggle to codify these kinds habits from the homes of 100 families in and privacy. We’re still in the fuzzy front- of abstract issues into explicit language. This the American heartland since 2007. And it’s end, a state of flux, an evolving situation is particularly true for certain demographic also why we launched an emerging media that defies one-off surveys and easy groups. Opinion polls of American teenagers, engagement lab, putting new technology answers. Marketers need to be sensitive on for example, have produced a range of tools into the hands of consumers, carefully these issues, but they shouldn’t be afraid to seemingly contradictory and inconsistent watching what happens—and then move forward. views on trust and privacy. This doesn’t learning why. actually mean that their social norms are radically changing. Rather, it suggests polls Our ongoing dialogue with consumers are asking the wrong questions, or perhaps reveals that many are still adjusting to the they’re asking the right questions with the one-to-many social architecture of online wrong words. networks, where communication is public
  • 107. Do Not Track: Did Facebook Force the FTC’s Hand? Should we blame Facebook? The recent Do including Zynga’s FarmVille, with nearly 60 users to opt-out of having their information Not Track proposal from the Federal Trade million users, were leaking users’ Facebook shared with advertisers—not surprisingly, since Commission, which would limit commercial IDs to outside companies. Several apps advertising is how Facebook makes money. surveillance and data collection of consumer were also sharing information about users’ web browsing, follows a year of high- friends with third-party vendors. Though Which brings us to an important point. In profile dust-ups over the privacy policies at Facebook policies prohibit app developers the past, consumers and policymakers were Facebook. Of course, Facebook isn’t the only from selling or sharing users’ personal data broadly united in their support for similar online publisher to take flak on these issues, with ad agencies and data tracking firms, the legislation such as the National Do Not Call but the company has proven willing—eager, company had clearly failed to enforce the Registry and the CAN-SPAM Act because even—to keep flying into this contested rules. these regulations provided obvious social territory, locking and loading in a year-long dog benefits with, effectively, zero cost to the fight with the press, privacy advocates Facebook has also introduced “learned general public. Consumers didn’t sacrifice and the FTC. From a public relations targeting” that enables companies to send anything by adding their name to the Do Not perspective, there have been a few spectacular ads to the friends of existing fans, or to Call list. They continued to enjoy the same crashes. In its ambition to push boundaries other people identified as sharing common basic phone service, minus the telemarketers. on consumer privacy, has Facebook imperiled characteristics, bringing the company closer And the telecom providers didn’t suffer, either. its success and, ultimately, the entire online to crossing the “creepy” line. The fallout was limited to a subset of the advertising business? marketing industry, much of which had already From a consumer perspective, Facebook been outsourced to India. Last year, Facebook reversed course privacy controls have been quite opaque. At on controversial policy changes that one point, the site required upwards of 100 But the impact of Do Not Track would be automatically made certain profile clicks to fully lock down settings. The controls far greater, because the online economy is information, including names and profile have since been streamlined, but there’s still dependent on advertising. The services of photos, open to the public. Then an no easy option that allows users to actually Google, Facebook, YouTube, Yahoo!, Micro- investigation by The Wall Street Journal see what their profile looks like to the general soft Live, Blogger and Blogspot are free revealed that the top ten Facebook apps, public. And there’s no setting that allows to consumers because the content is
  • 108. 107 underwritten with advertisements. If Congress pushes ahead with a highly restrictive Do Not Track registry, they risk severely damaging the competitiveness and profitability of some of the country’s most innovative companies. That’s a politically dangerous and all-around dubious move in a down economy. This brouhaha is brewing abroad, too. Facebook privacy concerns prompted the European Commission’s proposal of a “right to be forgotten” law guaranteeing that online content from social networking sites could be permanently deleted. The notion is wonderfully European—seemingly 03 prudent, but totally impractical. At this already-late juncture, it’s naïve to believe the online traces of our semi-public personas in social media could be wiped completely If Facebook were a country, it would be clean. We’re already caught in the web. If a the third largest in the world, lagging keyword search can cause a divorce or public behind only China and India. Facebook’s disgrace, as the Europeans complain, that growing base of 550 million users will information probably shouldn’t have been soon be double the population of the posted in the first place. United States.
  • 109. 108 Halfnimity: Behavioral Marketing Many of today’s online advertising applications operate in the zone of halfnimity — a middle ground between full identity and online anonymity. Terms like “targeting” and “tracking” tend to conjure more troubling notions, something comparable to a credit report or medical record. That’s not to suggest that more insidious tracking and trafficking of such information doesn’t occur. Private investigators, for example, can now acquire certain profile information, such as your Facebook username, from various paid databases, and that data may be linked to other identifiers, like your Social Security number, creating a permanent history. Unlike criminal, civil, credit and driving records, use of this kind of information in a pre-employment check or background investigation is not currently limited by federal law.
  • 110. 109 The FTC may have a point in suggesting that for Democracy and Technology, only 51% industry should be doing much more to the industry has failed to act fast enough of participants recognized that serving ads educate consumers on the indirect benefits in developing effective standards for self- tailored to their web-browsing history is of online ads and the potential tradeoffs of regulation. Baby steps have been made by something that “happens a lot right now.” opting out. Brands should be telling that the Digital Advertising Alliance, formed by a story, too. Because it’s not just government collective of advertising industry groups, but Mistakes can be costly when operating intervention that could pull the plug on online their voluntary opt-out program for online without clear precedents or industry best ads, the free, open-source AdBlock Plus (yep, behavioral advertising remains in beta stage. practices. Several federal class action the name says it all) recently became the first Meanwhile, marketing executives are left lawsuits, for example, were recently filed browser-based add-on to be downloaded over to fend for themselves. New behavioral over the surreptitious use of Flash cookies by 100 million times. marketing technologies, such as HTML5, several major media companies, including the new version of Hypertext Markup NBC Universal and Fox Entertainment Marketers should also realize that people Language with advanced user-tracking Group. For brand marketers, online tracking don’t think like machines. Many are somewhat capacity, are proving irresistible for brands, is an area where it pays to have a trusted baffled by the idea that algorithms—as despite the lack of public recognition about advisor—experimenting in isolation can lead opposed to nosy employees—are what what’s really happening. More than 80% to potential blowback. actively link their Google searches and of 2009 online ad campaigns involved Facebook profiles to relevant advertisements. cookies or some other tracking feature In 2011, online behavioral marketing will that could be construed as behavioral be coming out of the shadows and into the Consumer trust and consumer tracking are advertising, according to an informal survey spotlight. Brands must be fully prepared not mutually exclusive. But in the current of Interactive Advertising Bureau members. to field questions on the subject from both environment, trust can quickly erode without a Yet in an August 2010 study by the Center internal and external stakeholders. The commitment to transparency.
  • 111. Q POINT OF VIEW Can privacy survive in the social media ecosystem? As our public selves merge perceptibly with our private selves on so- cial networks, our notions of what constitutes privacy—arguably even the very definition of privacy—is undergoing a radical revision. Mark Zuckerberg audaciously quipped in 2010 that privacy was no interests and schools attended—of the remaining users? The answer was perhaps predictable: Yes. It was the high degree of accuracy that was surprising. Even when given information on as little as 20% of users, the personal attributes of the remaining users could be broadly determined. longer a social norm. For most of the 550 million users of Facebook, the idea of a “private” profile on Facebook apparently persists. But, Put more simply, we are friends with people like us. Our networks in fact, there is no such thing. reflect commonalities easily inferred by even the most basic of algo- rithms. Just by joining—often under the illusion of privacy—we reveal A recent study of online social networks started with this premise: ourselves. But few stop there. Instead, we share some of the the most Given the known attributes of some fraction of users in an online so- intimate details of our lives—children, marriage ties, school and work cial network, can we infer the personal details—geographic location, connections. We voluntarily make ourselves more vulnerable—but
  • 112. 111 Mya Frazier director of trends and insights vulnerable to what, really? RapLeaf? The People’s Republic of China? The threats remain largely abstract, opaque, seemingly academic. With every new status update, we may be entering a Faustian bargain, but we really can’t see whose hand we’re shaking. As Facebook grows ever larger and more powerful, we’re increasingly caught in a zero-sum game between participation and privacy. The emerg- ing cultural norms of transparency, openness and connectedness involve some inherent sacrifices. The question remains whether these tradeoffs will be worth it. FOLLOW MYA ON TWITTER @MYAFRAZIER OR ON HER BLOG MYAFRAZIER.TUMBLR.COM
  • 113. Faces of the Future 112 A Fictional Scene from the Year Likely to Succeed? Class of 2011, Most Ahead “I’m not some conspiracy theorist,” says Twitter? Twitter knows you’re basically an a class on Orwell,” Morris notes. “He was 17-year-old Brandon Hills,“ and I’m not some idiot.” Brandon pauses, letting the laughter really quite persuasive.” crypto-paranoid nutcase. I just think that die down. “They’re all selling your private nobody should be allowed to make money stuff—they’re selling you—to the highest The club’s next project was supposed off of me without my permission.” Brandon, bidder.” to be a Facebook application for the an honors student with a confident smile, yearbook committee that would facilitate is a senior at Cordova High School, where Brandon’s friends have teasingly suggested online nomination and voting for senior he serves as president of the school’s social that he founded the social media club superlatives, such as Best Dressed, Biggest media club and co-captain of the varsity simply to “pimp” his extracurriculars for Flirt and Most Likely to Succeed. But today, tennis team. He’s also a self-proclaimed college applications. But after gaining early Brandon proposes that they abandon member of the Post-Facebook Generation. admission to Stanford, he hasn’t lost any Facebook entirely and instead, develop passion on the issue of online privacy: the new app for Diaspora*, an alternative Brandon’s addressing a sympathetic crowd, a platform that touts itself as “the privacy- small group of like-minded friends who meet “There’s no opt-out. There’s no escape. aware, personally controlled, do-it-all, open- every other Thursday to discuss the bits and It’s like Tron—we’re stuck in their system source social network.” bytes of social networking. “So these big forever!” shots in Silicon Valley built these ginormous Brandon’s proposal to pick Diaspora* over empires by selling our personal data and our His friends cheer. The impromptu speech Facebook passes unanimously. private information, right?” he says. “We’re even gets an encouraging nod from Mr. talking about, like, billions of gigabytes Morris, the faculty advisor, jotting notes at “Brandon’s not paranoid, and he’s not stored on corporate servers.” the back of the room. Morris, the school’s AP alone,” says Mr. Morris, the faculty advisor. English teacher, describes himself as a “total “Perhaps those Silicon Valley big shots are “Facebook knows who your friends are. technological neophyte” and was surprised the ones who should be looking over their Google knows what you’re thinking. by the invitation to advise the club. “Not shoulder?” Foursquare knows where you’ve been. And coincidentally, Brandon approached me after
  • 114. 113 Pulling Down the Privacy Shutters at Diaspora* What started as a summer project for four Another new social start-up, Path, is attempt- Still, the controversy over privacy is far from NYU students turned, seemingly overnight, ing to build a “truly trusted” personal net- settled, and Facebook CEO Mark Zucker- into a coup to disrupt and decentralize the work by limiting users to 50 friends. Favoring berg hasn’t helped matters with his penchant technology—and power structure—of social quality over quantity is an intriguing response for imperial-sounding pronouncements. media. The high-privacy social networking to the mass-friend model of Facebook, but it “We decided that these would be the social platform Diaspora* seemed a social media means at-capacity users will have to continu- norms now and we just went for it,” he told Cinderella story. The developers sought a ally consider defriending somebody—their TechCrunch in 2010. His remarks were inter- modest $10,000 in seed money from viral cousin, their coworker—before they make a preted to suggest that privacy was no longer fundraising site Kickstarter and ended up new connection. That’s awkward. Brands can a social norm, and that he, essentially, had the with 20 times as much. Unlike Facebook, arguably achieve better results by engaging power to make those calls. Impolitic, perhaps. their open-source platform allows individual tighter-knit networks, where bonds between But Zuckerberg’s no fool. He won’t sacrifice his users to control how their profiles are stored, friends are stronger, but the constraints of kingdom for a horse. He’s not going to blow encrypted, transmitted and, ultimately, kept Path’s model—did we mention that users can his multi-billion-dollar empire because he’s free from prying eyes. only communicate with each other by posting prickly and inflexible on privacy policies. Rather, photos?—don’t bode well for mass adoption. Facebook will inevitably follow the example of Diaspora* earned a cult following among de- Google, which endured its own painful growing velopers and online opinion makers before its Despite the controversy over its privacy poli- pains on privacy—facing Congressional hear- alpha release in late 2010, but reviews of the cies, Facebook remains tremendously popular ings and many critical editorials—and respond actual roll out were tepid. Here’s the rub: If you and the vast majority its 550 million users by improving communications, education, ac- want to be found, you need to be findable. appear to be satisfied with the terms —and countability and outreach on these issues. And if you want to be social online, you have inherent tradeoffs—of its service. Brands, of to searchable. Because after you pull down the course, have become increasingly dependent Facebook, in other words, will mature. The FTC privacy shutters, where does that really leave on the social platform. Davide Grasso, chief will pull back. And brands will find their way you? Basically, sitting alone in the dark. It’s marketing officer at Nike, told BusinessWeek forward, building best practices and consumer definitely not Facebook, and it’s not much fun, that Facebook “is the equivalent for us to what confidence at the same time. Trust us on that. either. TV was for marketers back in the 1960s.”
  • 115. Start-up to Watch 114 Behavioral Registry Tracks Devices, Not People Does your iPhone have a bad reputation? BlueCava captures the unique digital fingerprints levels, there’s no single browser-based security of Internet-connected devices. The service can setting, like disabling cookies, that can easily keep tabs on your iPhone, Xbox and Google TV, circumvent surveillance across the expanding then triangulate among them to provide relevant network of BlueCava-enabled sites and online and sequential messaging. Their goal is to iden- ads. Yet the company allows device-owners to tify nearly 1 billion devices—around 10% of the opt-out of being tracked from site to site—and world total—within the next year. claims it’s the first in the industry to do so. A conversation with CMO Dean Harris. Online device-identification measures are dif- The roots of the technology can be traced to ficult to detect and disable, even for the most anti-piracy efforts in the music business. Today tech-obsessed consumers. Because the sniff- it’s being primarily used in two ways: improving ing occurs at both the browser and hardware ad-targeting and fighting online fraud. Q: Why track—and target—machines instead of people? A: Look at the amount of device proliferation. There are 10 billion devices versus 7 billion people. This can be a useful way for companies to look at things.
  • 116. 115 115 Q: Most Internet-connected devices have their own unique identi- A: In the world of online ads, billions and billions of impressions ties—serial numbers, SIM cards and so forth. But how can a are being bought and sold. But advertisers and marketers are device have a reputation? not always getting what they pay for. We can tell whether a machine is acting like a bot, or acting like a human. A: We’re providing what is, in effect, a universal identifier that helps brands target better. One of the former ways brands did this We have a client that spends several hundred thousand dollars online was through the use of cookies. But cookies get stale, they per month on Google AdWords. They’re paying around $25 crumble. They expire and can be deleted. Our fingerprint is persis- per lead. Every day, their competitor clicks their ads 1,000 tent. If a device is used repeatedly to commit fraud, that’s impor- times, just to give them grief. We were able to show that, in tant. On the other hand, if a device makes a number of legitimate fact, those clicks were coming from the same computer in online purchases, then an e-commerce site might want to provide their competitor’s headquarters. Our client could then go back a premium service. to Google and prove they weren’t legitimate clicks, so they shouldn’t be paying for them. Q: BlueCava scrubs names, physical addresses and email addresses from the data. Doesn’t that defeat the purpose? Is my iPhone Q: Can concerned consumers take effective countermeasures really more important than me? to prevent their devices from being fingerprinted? A: We do take out the PII—the personally identifiable information. A: They can’t opt-out of having their device identified. But we do We’re not tying your iPhone to you. What’s important is how the have an opt-out policy for tracking. Being tracked means having device behaves. Businesses can then decide whether to do busi- your device identified as you move from one site to another. ness with that device or not. We’re proud of our privacy policy. It’s honest and transparent. The term in the data world is “householding.” Data companies sell Q: What’s the likely impact of Do Not Track? household data, but it’s not always relevant, and it’s often quite static. We can help. We can talk about the interconnectivity of A: If you take the analogy of the Do Not Call list, marketers can’t devices within the household and how those devices link to other determine to call or not call a number unless they know the devices. phone number. We think BlueCava can provide a similar service in the online world. You can’t track, or not track, a device unless Q: What’s the upshot for marketers and brands? you know its identity. There’s been no universal way of doing that until now.
  • 117. 116 04 SECTION
  • 118. 117 117
  • 119. 118 Conclusion We believe brands can enjoy uncommon success in 2011 by spending if marketing budgets accurately, and rationally, reflected the following the new digital imperative to create, innovate and relate. media consumption habits of today’s consumers. People now spend as much time online as watching TV, but brands spend three times as For marketers, the year ahead will present momentous opportunities much on TV ads than online marketing. Traditional print publications to build brand equity through innovation and bold action. As like magazines and newspapers account for only 12% of consumer the advance of digital technology continues to accelerate, brand media consumption, but receive over 25% of total ad spend. Media leaders are moving forward with confidence. Best practices are budgets—and, by extension, the industry mindset—remain stuck in being clarified and validated. Brands that develop a mature digital the past. strategy aligned with business objectives—and select metrics and set performance goals accordingly—will realize significant gains. Despite the limitless possibilities of digital, mobile and social marketing—of reaching consumers at the right time and right place— Which is why our digital outlook for leading brands in 2011 is, in a vast segments of the industry are resistant to change. Countless word, optimistic. brands remain captive to staid corporate structures—mired in old models of rigid planning, massive TV spends and AOR relationships Yet we keep coming back to a these irreconcilable numbers: There’s with agencies unwilling to evolve into a more experimental mode of a $50 billion global opportunity gap between what brands are creative development. They ignore the increasing desire of consumers currently spending on digital advertising, versus what they would be to be a part of the process, missing huge opportunities for co-
  • 120. 119 If you have built castles in the air, your work need not be lost; that is where they should be. Now put foundations under them. —Henry David Thoreau created product development and user-generated content. Instead Facebook, Twitter or YouTube, where up-front investment is minimal of becoming productive participants in the open dialogue of digital, and success largely depends on creativity, dedication and attitude. where consumers are already redefining their “brand truths,”many companies persist with ineffectual one-way communications. We live and work in an iterative time, when the newness of countless platforms and mediums handicap those with a timid approach. Amid Some argue that the hesitant, transitional approach was appropriate the explosion of platforms, it’s not enough to simply understand in 2010. Hammered by recession and a general funk in the zeitgeist, technology trends; it’s equally critical to understand the cultural caution reigned. But the inexorable pace of the economic recovery context and consumer behavior behind those trends. has not stopped, or even slowed, the rapid migration of consumers into new digital, social and mobile platforms. Americans over the age Digital is no longer an add-on; it’s the new default. More than of 65 increased their usage of social media by 100% last year. Half of any other time in the history of marketing, opportunity abounds all U.S. consumers are expected to own smartphones by the end of for brands willing to be courageous and experiment while the this year—that’s a 66% boost over 2010, and a 178% increase since competition pauses. Challengers and start-ups are bounding forward 2009. If consumers are willing to spend their limited time and hard- to become category leaders while companies that wait are caught earned money on these platforms, how can brands justify another year flat-footed. Marketers who use these essential foundations as the of doing little, or nothing, in digital? Particularly perplexing are the basis of their digital strategies today will look back on 2011 with the companies that have not yet launched an owned-media channel on satisfaction that comes from success.
  • 121. 120 Building the Brand of the Future The Three Build a Robust Owned- Foundations of Media Channel Digital Success Nothing—not a small budget or geographic constraints—restricts the potential influence and reach of your brand on an owned-media channel. It’s a content channel without a price. Media without a middleman. Technology has shortened the distance between your brand and your consumer to approximately zero. Brand presences on Facebook, Twitter or YouTube are the antithesis of the old mass model—expansive, engaging and open instead of constrained, disruptive and closed. But an owned- media channel demands something analog content (formerly known as ads) doesn’t: The ability to attract an audience all by yourself, without the collateral appeal of an entertaining program—a TV show, a sports broadcast, a news story. This shift requires brands embrace creativity with passion and intensity, giving it the highest priority. There is no excuse for forgettable and derivative advertising anymore. Creativity matters more than ever.
  • 122. 121 Build a Suite of Digital Metrics Defined Brand Behaviors Tied to Business Objectives Within Social Channels The oft-quoted Wannamaker conundrum—I know half of my Digital marketing is about what your brand does, and what advertising works, I just don’t know which half—is no longer it delivers, not just what it says about itself. The behavior confounding digital marketers today. It is now possible to measure of a brand in social must reflect something that’s real. So consumer behavior online at a level of granularity traditional before you talk, you’ll need to listen to how your consumer advertising never offered. Yet this new range of metrics—a veritable defines you. Your fans on Facebook and followers on flood, really—can also become a distraction. It’s critical to link Twitter aren’t parroting a litany of product benefits. metrics to core business strategies. Brands must first develop a They’re not concerned about your competitive position digital strategy with clear business objectives, and then select in a product category. Instead, they’re telling you about metrics and performance goals accordingly. Define the desired the significance of your brand in their lives. Your cultural outcome: Is it changing a consumer’s perception of a brand? relevance. They’re telling you who you are today—and Moving a brand’s position to take advantage of a demographic they’re telling the truth. These truths should define the or shift in consumer behavior? True measures of brand success brand behaviors within social and digital channels. do not change in the digital world. It may be easy to count likes and check-ins, but those are rarely meaningful metrics—and they certainly aren’t strategic marketing.
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  • 124. 123 Photography Online content-sharing communities inspired the design of this Featured photographer Thomas van de Weerd blends the use of book, in particular the photo-sharing site Flickr, where millions of traditional and new media. He has been an Internet professional photographers exhibit their work. Much of the imagery in this report for over ten years and loves to build online audiences. He lives is licensed under Creative Commons, a non-profit organization with in Utrecht, The Netherlands and likes to take photos of everyday a mission of broadening the range of creative works available for things. View van de Weerd’s photostream at sharing and collaboration. To learn more, visit or his website 04: Mark Zastrow: 40: 80: Thomas van de Weerd 07: Randy Pertiet: 42: Thomassin Mickaël: 82: Kevin Simpson: 08: Thomas van de Weerd 53: Thomas van de Weerd 87: Zawezome: 16: Calvin Cropley: 56: Johan Larsson: 92: D’Arcy Norman: 22: Marcus Kwan: 62: Thomas van de Weerd 95: Thomas van de Weerd 28: Ed Yourdon: 66: Bruce Clay, Inc.: 107: Thomas van de Weerd 32: Robert Scoble: 73: Orijinal/Jaysin: 108: Thomas van de Weerd 34: Thomas van de Weerd 76: Randy Pertiet: 116: Thomas van de Weerd 37: Thomas van de Weerd 79: Emily Walker: 122: Thomas van de Weerd
  • 125. 124 The Engauge 2011 Digital Outlook is dedicated to our Chairman and Founder Stan Rapp, whose vision and boundless energy continually recreates the future of our industry. About Engauge One of the nation’s largest independent agencies, Engauge leverages creativity and technology to develop transformational ideas that connect brands and people. Engauge guides a growing roster of clients on the path to realizing the power of digital channels by focusing on driving results and sustainable growth for brands. The agency’s client roster includes Nationwide Insurance, DAD’S Pet Care, The Home Depot, Best Buy For Business, Chick-fil-A, Brown-Forman, Food Lion, Van Gogh Vodka, NGK Spark Plugs, Perkins, IHG, UPS, Logitech and more. Engauge, which has offices in Atlanta, Austin, Columbus, Orlando and Pittsburgh, is a portfolio company of Halyard Capital.
  • 126. Acknowledgements Editor and Writer: Mya Frazier Art Director: Jane Langworthy Writer and Researcher: John Powers Design Intern: Thao Thai
  • 127. 126 Patti Ziegler Chief Marketing Officer 614.573.1472 Engauge 375 North Front Street Suite 400 Columbus OH 43215