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

WHAT’S PLAYING ON WALMA...
A little about me

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

 M.A. in RTF ...
We need to make assumptions
about future (predictions)


 But should proceed with cautious
  assumptions

“We drive into ...
An Overview of Tonight’s
Talk:
 The shift away from interruption advertising
 Review of basic social network theory
 UG...
The Death of the TV-Industrial
Complex

 Companies used to spend enormous amounts
  on TV advertising and the old rule wa...
The Death of Traditional
Advertising?
Yes and no . . .

Yes in the sense that a great :30 TV spot is no
  longer all it ta...
Digital Marketers Rely on
Traditional Consumer Data
Internet marketing relies on traditional
  consumer-profiling data:

D...
Media Mix Changes

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

 Search—more and...
Traditional Advertising as
“Interruption Advertising”
                               Versus Non-Interruption
Interruption ...
Ideas that Spread, Win
(Seth Godin)

 Ideas that spread rapidly—ideaviruses—are
  more likely to succeed than ideas that ...
The buzz phenomenon

 Consumers are more connected than ever
  before, and communicate positive and
  negative experience...
Network hubs hold the key

 People who talk obsessively re: a brand are
  considered “network hubs” (sometimes
  referred...
10 characteristics of networks

1.  Once latent networks are becoming manifest in digital era
2.  People link with others ...
Achieving success within
networks
 No amount of advertising will sell a poor
  product—buzz is generated by the product:
...
Actively seed your products

 A “seed unit” is an actual product or a
  representative sampling from the product
  you ar...
Six Rules about Promo and Buzz

1. Keep messaging simple: short concise
   messages can be passed on [“high concept”]
2. T...
Successful Brands Which
Don’t Utilize “Traditional Advertising”
and do leverage Social Networks:

Anchor Steam Brewing Com...
Buzz in distribution channels


 Monster Cable and its strong relationship with
  retailers [Best Buy, Guitar Center, App...
Monster Cable’s “Beats by Dre”

http://www.beatsbydre.com/
[joint-venture between Monster and Interscope
   and the use of...
User Generated Content

 Growth in UGC will increase due to:

1. Online social networking

2. Publishing (blogs, ebooks, ...
Levi’s Promotional Content
Masquerading as UGC

 http://www.youtube.com/watch?v=pShf2VuA
 u_Q

 http://www.youtube.com/w...
Paco Underhill

He uses similar techniques to Account
 Planning, and is basically a “retail and service
 environment anthr...
Paco Underhill’s
Envirosell
Envirosell is a New York-headquartered research and
  consulting firm specializing in studying...
Partial Envirosell Client List
 Bank of America            Sony Music
 Citibank                   Time Inc.
              ...
Atmospherics


The study of consumer environments from a
  design aesthetic and theme perspective
  (Disney as early an in...
Actionable Findings

 The “butt brush” factor
[placement of necktie rack near a busy aisle]—
  post-adjustment sales went...
Little things that mean a lot


Underhill noticed teen 45-rpm record shoppers
 craning to see a high-placed Billboard char...
Doorways

“We paid particular attention to the ‘doorways’—our
  term for any path leading into or out of an area of a
  st...
What’s percentage of men, vs.
women, who buy jeans after
trying them on?

Men:     65%

Women:   25%
Percent of in-store
purchases that are
unplanned?


60 percent of in-store purchase decisions are
  unplanned purchases
Walmart in US and
Portugal’s Xare Media:

 Xare Media’s implementation of customer-
  tracking system that differentiates...
Walmart TV: Old vs. New

Old Walmart TV network      New SMART Network


  1. Audience aggregation    1. Helping shoppers ...
Walmart SMART Triple Play



Walmart’s premier SMART Network ad buy is
 called the “triple play”, where a campaign is
 sho...
Impression Results for
SMART?

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

Thus, from a G...
SMART Sales Boost

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

 Screenmedia Expo Europe May 2010 keynote
  speech: “The Dawn of Dynamic Retail: How
  Walmart upgraded it...
What’s Playing on Walmart?
in Other Senses as well. . .


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

Possibility t...
Walmart / PSU connection


Lee Scott:
http://en.wikipedia.org/wiki/Lee_Scott_%28bus
  inessman%29

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


1. Aim for “customer share” not “market share”
2. A comp...
Aim for “customer share” not
“market share”

 Utilize interactive media to track individual
  customer transactions [exam...
A Comparison of
Mass vs. 1:1 Marketing
Mass marketing                           1:1 Marketing
1.   Requires product manage...
Learn 5 things about your
customers
1. Which customers are most valuable and why?

2. Which customers aren’t worth caterin...
Reorganize your firm for 1:1
marketing
 Brand managers supported by
  advertising, sales promotion and PR will need
  to ...
The customer managers take
charge

 Unlike stock market, there is no market for
  “customer lifetime value” yet they can ...
What is Google Good For?



 AdWords and AdSense (good for e-POS
 advertising [transaction fullfilment], not so
 good for...
Internationally Successful
Contemporary Web Sites

 www.bacardi.com
[50+ countries, 25 + languages, Brazil
  listed, thou...
Not Your Daddy’s got milk?

The revamped www.gotmilk.com website

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

...
Funktube Case
[Som Livre Records]

 FunkTube (Brazilian UGC choreography
 competition—very savvy in ways that various
 so...
Social Media Marketing:
Greenpeace Brazil

 Social Marketing: Greenpeace: Trangênicos
  spot in Brazil:
  http://www.yout...
Dominos revamped website


 www.dominos.com order fulfillment site


[“113 quintillion pizza variations possible”]
Diesel’s Online Efforts

 Style Lounge – Diesel Online Store:
http://www.neue-
  digitale.de/projects/diesel_stylelounge/...
Sprint NOW Dashboard:



 http://now.sprint.com/nownetwork/


[developed by Goodby, Silverstein & Partners]
Window’s Vista
“Clairification”:
Hip by Association

 Microsoft “Clearification” campaign for
  Window’s Vista w. Demetri...
Coke Zero + Mentos
“rocket car”


 http://www.youtube.com/watch?v=-
 EK09QvK4Fc&feature=related
How do big firms track
online discussion re: their
brands ?
Netvibes
[“dashboard everything”]
http://www.netvibes.com/
Netvibes now touts the following to marketing
   enterprises:
•...
Methodoligical Claims by
Neilsen BuzzMetrics
“Nielsen uncovers and integrates data-driven
insights culled from nearly 100 ...
Nielsen BuzzMetrics
[Brand Association Map]
Hot Digital Marketing Areas
 Social media marketing synergy (plug-ins
    that tweet your new blog posts, embedded
    Yo...
3 Predictions re: Ad-driven
Content Model
Proliferation of both:

  A) blended promotion/content (where the
  content is t...
A Few Closing Thoughts

 In the future, advertising alone may not support
  premium content

 Free-mium (“free is always...
From: Reach and Frequency



To: Relevance, Reach and Frequency. . .
Obrigado!



Let’s open up the floor for discussion…
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What's playing on walmart tonight

  1. 1. Seminar by Linden Dalecki, Ph.D. Delivered at the University of Porto the evening of June 2, 2010 WHAT’S PLAYING ON WALMART TONIGHT? TRENDS IN DIGITAL MARKETING
  2. 2. A little about me  Copywriter in Hong Kong (loved Macau) and Washington D.C. (AppNet and Commerce One)  M.A. in RTF at U.T. Austin (2003)  Ph.D. in Advertising at U.T. Austin (2008)  Currently Asst. Prof. at Pittsburg State University [main research stream is Entertainment Marketing, particularly Hollywood and Hip-Hop]
  3. 3. We need to make assumptions about future (predictions)  But should proceed with cautious assumptions “We drive into the future using only our rearview mirror.” --Marshall McLuhan
  4. 4. An Overview of Tonight’s Talk:  The shift away from interruption advertising  Review of basic social network theory  UGC and online promotion  Atmospherics and retail environments  One-to-one marketing circa 1993 and today  Case studies in online promotion  Industry trends and closing thoughts  Open the floor for discussion [p.s.—will abridge video clips throughout]
  5. 5. The Death of the TV-Industrial Complex  Companies used to spend enormous amounts on TV advertising and the old rule was “Create safe, ordinary products and combine them with great marketing”  The new rule is “Create remarkable products that the right people seek out”
  6. 6. The Death of Traditional Advertising? Yes and no . . . Yes in the sense that a great :30 TV spot is no longer all it takes. . . No in the sense that TV—and many other traditional advertising platforms—will survive and thrive in this new era. . .
  7. 7. Digital Marketers Rely on Traditional Consumer Data Internet marketing relies on traditional consumer-profiling data: Demographic data Psychographic data Financial data Purchase behavior data Media consumption data
  8. 8. Media Mix Changes  Digital—more dollars will move to digital as consumers continue to migrate there  Search—more and more dollars will move to search as smaller companies utilize it  Print—dollars will shift OUT of print  Out of home—OHH will increase slightly as more venues and sites added
  9. 9. Traditional Advertising as “Interruption Advertising” Versus Non-Interruption Interruption Advertising Advertising  Ad content interrupts the  Promotional content is destination content we are embedded in and of a drawn to piece with destination content :  Consumers have evolved ways to avoid interruption advertising [from TiVo to  BMW ifilms Adblock]  Google AdWords search results  And clutter has became a  even the classic/traditional major issue infomercial
  10. 10. Ideas that Spread, Win (Seth Godin)  Ideas that spread rapidly—ideaviruses—are more likely to succeed than ideas that don’t  Sneezers are the people who launch and spread an ideavirus—finding and seducing sneezers is essential to creating an ideavirus (targeting specific niches is essential to this process)
  11. 11. The buzz phenomenon  Consumers are more connected than ever before, and communicate positive and negative experiences with their network of connections  Recall that hotmail.com went from 0 to 12,000,000 users in 1.5 years (each person who signed up helped recruit new members as every email from hotmail included a message touting the free service)
  12. 12. Network hubs hold the key  People who talk obsessively re: a brand are considered “network hubs” (sometimes referred to as “opinion leaders” “champions” “power users” or “influencers”) 1. Regular hubs 2. Mega hubs 3. Expert hubs
  13. 13. 10 characteristics of networks 1. Once latent networks are becoming manifest in digital era 2. People link with others like them (homophily) 3. Similar people form clusters (Mac) 4. Buzz spreads through common nodes 5. Information gets trapped in clusters 6. Network hubs and connectors create shortcuts (heterophily) 7. We talk to those around us (proximity) 8. Weak ties are surprisingly strong (jobs) 9. The web nurtures weak ties 10. Networks go across markets
  14. 14. Achieving success within networks  No amount of advertising will sell a poor product—buzz is generated by the product: 1. Products that evoke emotions (Blair Witch) 2. Products that promote themselves (iPod) 3. Products that leave traces (hotmail) 4. Products that gain utility as more people use them (fax, email, phones) 5. Products that are compatible (Palm + PC) 6. Products that are easy to use (Flip HD videocam)
  15. 15. Actively seed your products  A “seed unit” is an actual product or a representative sampling from the product you are trying to promote, which you place in the hands of your seed customers [give people in multiple clusters direct experience with your product to plant the seed that stimulates discussion in multiple networks simultaneously; examples of SXSW 2007/twitter and Cannes 2010/Flip HD cam]
  16. 16. Six Rules about Promo and Buzz 1. Keep messaging simple: short concise messages can be passed on [“high concept”] 2. Tell what’s new 3. Don’t make claims you can’t support 4. Ask customers what’s special about your product or service (if they can’t tell you, they can’t pass it on via WOM/eWOM) 5. Start measuring buzz 6. Listen to the buzz
  17. 17. Successful Brands Which Don’t Utilize “Traditional Advertising” and do leverage Social Networks: Anchor Steam Brewing Company [perceived as more authentic by aficionados who appreciate the lack of advertising] Costco [programs such as Car Buyer program generates buzz via market mavens] Monster Cable [extremely powerful retail network keeps competitors out]
  18. 18. Buzz in distribution channels  Monster Cable and its strong relationship with retailers [Best Buy, Guitar Center, Apple etc.]: 1. discount programs for sales reps 1. bonuses offered to top sellers [trip to San Francisco, access to the company’s fleet of sports cars, etc.]
  19. 19. Monster Cable’s “Beats by Dre” http://www.beatsbydre.com/ [joint-venture between Monster and Interscope and the use of an “authentic opinion leader”] http://www.beatsbydre.com/about/about.aspx [great anecdotes re: early promotion of iPod, hip-hop industry, piracy, audio technology, MTV, public visibility of products, opinion leadership, Eminem, Lady Gaga, YouTube, etc. “our goal is not to be used by the media, but to be the media itself”]
  20. 20. User Generated Content  Growth in UGC will increase due to: 1. Online social networking 2. Publishing (blogs, ebooks, ezines) 3. Sharing (YouTube snapfish, flickr, Yahoo! photos) 4. Creative expression (mashups, cell phone vids, Diet Coke + Mentos, etc.) screen: http://www.youtube.com/watch?v=hKoB0MHVBvM
  21. 21. Levi’s Promotional Content Masquerading as UGC  http://www.youtube.com/watch?v=pShf2VuA u_Q  http://www.youtube.com/watch?v=1l_v1K3G wUc&feature=related
  22. 22. Paco Underhill He uses similar techniques to Account Planning, and is basically a “retail and service environment anthropologist” CEO and founder of Envirosell
  23. 23. Paco Underhill’s Envirosell Envirosell is a New York-headquartered research and consulting firm specializing in studying retail and service environments [founded by Paco Underhill in 1986] Focus is to study “where products and people meet”— [stores, banks, restaurants, service facilities] Offices in New York, Mexico City, Sao Paulo, Milan, Bangalore and Tokyo, clients in 26 countries Envirosell claims to provide its clients “with tools to
  24. 24. Partial Envirosell Client List Bank of America Sony Music Citibank Time Inc. Unilever Lloyd’s (United Kingdom) Wrigley Wells Fargo Bank Adidas Einstein Brothers Bagel The American Museum of Natural History Kentucky Fried Chicken Bath & Body Works Best Buy McDonald's Bulgari Olive Garden Circuit City Stores Starbucks Coffee Discovery Channel Stores Subway ExxonMobil The Gap (including Banana Republic and Old Navy) Taco Bell Godiva L.L. Bean 20th Century Fox Nokia Coca-Cola OfficeMax Estée Lauder Payless Ford Motor Company Petsmart Saks Frito-Lay T-Mobile General Mills TJX (TJMaxx) Hallmark Cards Target Hewlett-Packard Trader Joe's United States Postal Service Johnson & Johnson Verizon Kraft Foods Virgin Mobile Microsoft Walgreens Miller Brewing Company Walmart Pepsi Procter & Gamble
  25. 25. Atmospherics The study of consumer environments from a design aesthetic and theme perspective (Disney as early an innovator) http://www.envirosell.com/index.php?option=c om_content&task=view&id=230
  26. 26. Actionable Findings  The “butt brush” factor [placement of necktie rack near a busy aisle]— post-adjustment sales went up “quickly and substantially”  Adults pay for dog treats [but children often drive the purchase]—after dog treats were moved down the planogram, sales went up immediately
  27. 27. Little things that mean a lot Underhill noticed teen 45-rpm record shoppers craning to see a high-placed Billboard chart After lowering the chart, sales of 45s went up by 20%
  28. 28. Doorways “We paid particular attention to the ‘doorways’—our term for any path leading into or out of an area of a store” “Until the client knew which paths were most popular, it was impossible to make informed decisions about where to stock what, or where to place the merchandising materials meant to lure customers” Is there an online analog for “doorways”?
  29. 29. What’s percentage of men, vs. women, who buy jeans after trying them on? Men: 65% Women: 25%
  30. 30. Percent of in-store purchases that are unplanned? 60 percent of in-store purchase decisions are unplanned purchases
  31. 31. Walmart in US and Portugal’s Xare Media:  Xare Media’s implementation of customer- tracking system that differentiates potential retail-screen viewers from actual viewers and delivers increased ROI  Walmart’s shift from old school in-store Walmart TV to new school Walmart SMART Network
  32. 32. Walmart TV: Old vs. New Old Walmart TV network New SMART Network 1. Audience aggregation 1. Helping shoppers shop smarter 2. 30 second ads 2. Formats designed for retail 3. Zone specific flatscreens 3. Single-channel CRTs 4. Lift-based pricing 4. CPM-based pricing
  33. 33. Walmart SMART Triple Play Walmart’s premier SMART Network ad buy is called the “triple play”, where a campaign is shown on 1) a large welcome screen at the Walmart entrance, 2) a category screen in departments and 3) endcap screens on each aisle
  34. 34. Impression Results for SMART? SMART Network reports 140 million impressions per week, with a CPM of $2-4 Thus, from a GRP [gross rating point] standpoint, Walmart is the fifth largest network in the US, just behind ABC, CBS, Fox and NBC
  35. 35. SMART Sales Boost Sales lift by department: Electronics : 7% Over the counter TC: 23% Food: 13% Health/beauty: 28% Sales lift by product type : Mature item boost: 7% Item launch: 9% Seasonal push: 18% Price leadership (items on rollback): 6%
  36. 36. SMART Future?  Screenmedia Expo Europe May 2010 keynote speech: “The Dawn of Dynamic Retail: How Walmart upgraded its signage network and discovered the power of customer relevance”  Focus on A) better screen placement (recall Underhill’s Billboard top-40) and B) increased relevancy [seasonality, weather, region specific factors, etc.]
  37. 37. What’s Playing on Walmart? in Other Senses as well. . . Current DVD in-store sales and rental kiosks. . . Possibility that Walmart will develop a branded entertainment content platform …
  38. 38. Walmart / PSU connection Lee Scott: http://en.wikipedia.org/wiki/Lee_Scott_%28bus inessman%29 Steve Scott
  39. 39. "The One to One Future” by Don Peppers and Martha Rogers (1993) 1. Aim for “customer share” not “market share” 2. A comparison of mass vs. 1:1 marketing 3. Learn 5 things about your customers 4. Reorganize your firm for 1:1 marketing 5. The customer managers take charge 6. Preaching is out; dialogue is in
  40. 40. Aim for “customer share” not “market share”  Utilize interactive media to track individual customer transactions [example of brick-and- mortar Waldenbooks’ frequency-marketing program. . . or more obvious “recent” example of Amazon.com—remember, this piece was written in 1993]
  41. 41. A Comparison of Mass vs. 1:1 Marketing Mass marketing 1:1 Marketing 1. Requires product managers 1. Requires customer managers who sell selling 1 product at a time to as as many products to one customer at many customers as possible a time 2. Marketers try to differentiate 2. Marketers seek to differentiate their their products customers 3. Marketers try to acquire a 3. They also seek new business from constant stream of new current customers customers 4. Marketers concentrate on 4. Marketers focus on economies of economies of scale scope
  42. 42. Learn 5 things about your customers 1. Which customers are most valuable and why? 2. Which customers aren’t worth catering to at all? 3. Which customers will give generate more business via referrals? 4. Which prospects are you most likely to convert to customers? 5. What type of consumers are real prospects?
  43. 43. Reorganize your firm for 1:1 marketing  Brand managers supported by advertising, sales promotion and PR will need to be let go or retrained  In new firm each “marketing manager” will have a portfolio of customers with an emphasis on “individual consumer communications” rather than mass advertising
  44. 44. The customer managers take charge  Unlike stock market, there is no market for “customer lifetime value” yet they can and must be statistically projected and mathematically guessed (growth algorithms, etc.)
  45. 45. What is Google Good For?  AdWords and AdSense (good for e-POS advertising [transaction fullfilment], not so good for brand advertising)
  46. 46. Internationally Successful Contemporary Web Sites  www.bacardi.com [50+ countries, 25 + languages, Brazil listed, though Portugal currently is not]  www.experience159.com [designed exclusively for Alpha Romeo – France resulted in a million hits across 100 countries, over 1,000 test drives]
  47. 47. Not Your Daddy’s got milk? The revamped www.gotmilk.com website Get the Glass Online Game: http://www.gettheglass.com/ White Gold is White Gold: http://www.youtube.com/watch?v=5yHtDlSaoj 8&feature=related
  48. 48. Funktube Case [Som Livre Records]  FunkTube (Brazilian UGC choreography competition—very savvy in ways that various social media are leveraged together)  http://www.youtube.com/watch?v=yecp97Bd 8_U
  49. 49. Social Media Marketing: Greenpeace Brazil  Social Marketing: Greenpeace: Trangênicos spot in Brazil: http://www.youtube.com/watch?v=mqYqwT6 KRZM  and GreenTube (Brazil): http://www.youtube.com/watch?v=AKLcUbv CxHw http://www.youtube.com/watch?v=AZyXHO w-A08
  50. 50. Dominos revamped website  www.dominos.com order fulfillment site [“113 quintillion pizza variations possible”]
  51. 51. Diesel’s Online Efforts  Style Lounge – Diesel Online Store: http://www.neue- digitale.de/projects/diesel_stylelounge/ Diesel’s “the Heidies”  http://www.heidies.com/  google : "safe for work" diesel [20 million + total YouTube views]
  52. 52. Sprint NOW Dashboard:  http://now.sprint.com/nownetwork/ [developed by Goodby, Silverstein & Partners]
  53. 53. Window’s Vista “Clairification”: Hip by Association  Microsoft “Clearification” campaign for Window’s Vista w. Demetri Martin (use of UGC sites such as YouTube, Google Video, MSN, AtomFilms, iFilm, Revver, etc.)  http://www.youtube.com/watch?v=h4b2QNn VrY0
  54. 54. Coke Zero + Mentos “rocket car”  http://www.youtube.com/watch?v=- EK09QvK4Fc&feature=related
  55. 55. How do big firms track online discussion re: their brands ?
  56. 56. Netvibes [“dashboard everything”] http://www.netvibes.com/ Netvibes now touts the following to marketing enterprises: • Brand Monitoring – “Track clients, customers and competitors across hundreds of media sources all in one place” • E-Reputation Management – “Visualize real-time Twitter conversations and social activity feeds, and track new trending topics with drag-and-follow smart widgets” •Product Marketing – “Create fully interactive product microsites in minutes”
  57. 57. Methodoligical Claims by Neilsen BuzzMetrics “Nielsen uncovers and integrates data-driven insights culled from nearly 100 million blogs, social networks, groups, boards and other consumer-generated media platforms.” “Nielsen methodology employs: A robust harvesting system that pulls data from a range of online media sources. Complete data control for delivering real-time measurement and analysis. Optimal mix of vertical industry knowledge and social media expertise. Balanced investment in text-mining, analytic technologies and expert analysts.”
  58. 58. Nielsen BuzzMetrics [Brand Association Map]
  59. 59. Hot Digital Marketing Areas  Social media marketing synergy (plug-ins that tweet your new blog posts, embedded YouTube videos, blog with TweetMeme buttons, etc.)  Flip HD, Qik and social-media video  Mobile marketing and mobile apps  Mobile Analytics (DoubleClick)  Geosocial Networking (Foursquare and Gowalla)  Micro-payment content-licensing models
  60. 60. 3 Predictions re: Ad-driven Content Model Proliferation of both: A) blended promotion/content (where the content is the promotion and vice-versa) B) a return to the bookended “brought to you by ____ soap” model C) a blending of A and B (Ford in 24)
  61. 61. A Few Closing Thoughts  In the future, advertising alone may not support premium content  Free-mium (“free is always matched with paid”)—give away A to sell B (Anderson—“If you get freemium right, you don’t have to buy ads”)  From Broadcast to thinslice Narrowcasting [increases relevance to consumer]: Destination sites will lose audiences to fragmentation (driving the need for continuous improvement in aggregation and analytics)
  62. 62. From: Reach and Frequency To: Relevance, Reach and Frequency. . .
  63. 63. Obrigado! Let’s open up the floor for discussion…

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