Week 6: Advertising, Promotion, and Public Relations in the Web World

Materials:

• Read Business Model Generation: Strategy text
• Read Secrets of Googlenomics
• Read Facebook article
• Read Pinterest article (in hopes of understanding my wife)
• Watch Pinterest video (see above)
• Read Social Networking Sites article
• Read article from Online Advertising Playbook

“Pinterest: Is it the New Facebook?” by Jennifer Van Grove, CNET, Feb. 2013 and “What is Pinterest?” CBS News, Feb. 2012

This was an interesting week of reading. I joked above about hoping to understand my wife’s use (obsession?) with Pinterest - and I have to admit that reading the article and watching the video it seems that her interest is not unfounded. However, I took the time to discuss with her how she uses Pinterest and found that for a “social” networking site, it seems (at least in her view) to be a bit less social. For instance, she said she doesn't follow “pins” of anyone she knows in real life, and doesn't interact with anyone,  instead she uses Pinterest to search for ideas to braid her hair in a new way, find a great gluten-free recipe, or inspirations for decorating our house, and put them on a virtual bulletin board - without getting (or desiring) feedback from other users or any real interaction. So at least in this one case, and based on my observation, the question of whether Pinterest is the new Facebook is a silly one in terms of all comparisons except the early struggle of both startups to find how to drive revenue from their popular product. For a highly valued startup like Pinterest, revenue production is critical to sustain financial success, but how does Pinterest do that without ruining what people enjoy about the site? When I asked my wife if she would want to see sponsored results from Barilla Pasta when she searched for a Baked Ziti recipe, she said she wouldn't mind, but that she also likely wouldn't be drawn to clicking on that pin, as she goes to Pinterest for something different. This article seems to suggest that Pinterest founders are aware of the touchy nature of commercializing their product.

This next article highlights ways that they are seeking to drive revenue without impacting the consumers of the product.

I’m not sure this article gave me any desire to start pinning home improvement ideas or ways to do my hair (pretty sure there is only one) but it did give me some thought-provoking insight into the challenge of making a product people want, and then making it generate revenue without ruining the features that drew consumers in the first place.

“Secrets of Googlenomics: Data-Fueled Recipe Brews Profitability” by Steven Levy, May 2009

The Googlenomics article was also fascinating - and made me realize how far advertising has really come as an industry and business model. The advance of internet search has made ads that really can be tailored to the user for the first time ever in quite specific ways, as the article points out.  One thing that struck me was that even early on, before Google’s founders realized the value that advertising would bring to the company, they felt that ads should be “useful and welcome - not just annoying intrusions.” Before sitting down to write this blog, I went downstairs in my condo complex to get my mail. Laid out below the mailboxes were the tossed rejects of my neighbors - the 100% advertising circulars. Everyone in the building (and the block, and the zip code, and likely the city) got the same one. I have no interest in the kids sale at Macy’s (no kids in our household) or the coupons for McDonald’s (there’s not one anywhere near here) - but I get them nonetheless, and see them (as my neighbors clearly do) as wasteful intrusions. So now, as I sit at my computer and check the ads that pop up on my Google search - I can see that they are targeted. There’s that tent that I checked out on REI’s website a few days ago. And, next to it, a camping stove that I hadn't thought about getting - but probably should. And I did click that ad, because it was relevant, and not obnoxious. (Once I got past the privacy issue... but that’s another blog post, another time.) Comparing the two business models and utilization of advertising dollars, it’s clear how far the internet has allowed advertising to come, and the incredible value that advertisers can find in internet advertising - thanks to products like Google’s Adwords.

Week 5: Big Data and Marketing Research

Materials:

• Read “The Numerati” article (hope it is as interesting as it sounds…)
• Read “Big Data and You”
• Read “Demystifying Big Data”
• Read “Advertisers get a Trove of Clues in Smartphone”
• Read “World’s Most Valuable Brands”

I've put a lot of time in over the last week getting caught up on the materials for this class.

"Introduction," in The Numerati, pp. 1-16

I found the “Numerati” article intriguing – and far too familiar. Lately, the national conversation has centered around Federal Government tapping records from wireless carriers, adding just one more piece of data to the already collected and analyzed thousands of other pieces. This article really underscored to me the near futility of maintaining privacy in today’s information age. At least for now, much of the data about individuals is somewhat siloed. The author paints a brief picture of how weaving his Visa and Tivo and Cellular location together paints a pretty clear picture of his last 24 hours. But for now, or at least as far as we are aware, that data cannot easily be stitched together on the average law-abiding individual. If it could, anonymity and privacy would truly become a thing of the past. As Apple and Google both move forward on applications that allow use of your credit cards through their own networks and devices, we're one step closer to unifying identifiable data, a scary proposition for anyone concerned about privacy. 

Big Data Infographic:

Business Model Canvas #1: Supercell

Supercell is a mobile game development company based out of Helsinki, Finland.  The developer has been enormously successful since the founding of the company in 2010 and has recently been valued at $800m USD. 

Supercell focuses on making free to play games for mobile devices that earn revenue primarily through the sales of virtual goods; this model is similar to that of Zynga’s Farmville.  The company is currently seeing about 8.5m users log in and play their games, generating revenues of over 2.4m USD some days.  The mobile games category is incredibly competitive; capturing, retaining, and monetizing users is the key to success.  Supercell has been able to add value to the category in user retention.  The attractive graphics, addictive gameplay, and innovative controls of their games keep users engaged and willing to play day after day.  Supercell has also unlocked the secrets to incite casual gamers to pay real money for virtual goods.

The ecosystem that Supercell thrives in isn't too complicated.  Key relationships with the App Stores of Google and Apple provide much of the activities surrounding customers, revenues, and advertising.  This simple system comes at a high cost of commissions going to the app stores, Apple takes nearly 30% of gross revenues outside of ad sales.

The attached Business Model Canvas is based on various sources on the internet found below.  These numbers are very rough due to a lack of public information.

Sources:
Number of casual gamers:         http://www.casualgamesassociation.org/
Paying vs non-paying casual:         http://www.hollywoodreporter.com/news/video-games-facebook-addictinggames-295720
Number of mobile gamers:         http://www.pocketgamer.biz/r/PG.Biz/Newzoo+news/news.asp?c=48541
Paying vs non-paying mobile: http://www.gamesindustry.biz/articles/2013-03-29-digital-game-sales-growing-33-percent
Avg mobile gaming sale:         http://skillz.com/corporate/2013/03/05/65-mobile-gaming-stats-to-impress-your-friends
SuperCell's Users:         http://pulse2.com/2013/04/18/supercell-2-4-million-daily-revenue-84435/
Daily advertising cost:         http://www.trademob.com/infographic-calculating-the-cost-of-a-top-10-rank-in-the-app-store/
Supercell employees:         http://www.crunchbase.com/company/supercell
Server costs:                 http://calculator.s3.amazonaws.com/calc5.html#key=a-european-web-app
Current valuation:         http://techcrunch.com/2013/03/28/supercell-2/

Week 4: Business Models and the New Era of Competition

Materials:

• Read “Business Model Generation – Patterns”
• Read “Business Models on the Web”
• Read Warby Parker articles (contemplate getting new glasses from Warby Parker)
• Read Dollar Shave Club
• Read Bonobos article
• Read “A New Way to Shop” article
• Watch recorded Breeze session
• Learn to use Business Model Canvas tool
• Watch/Read “Twitter Turns 7”
• Read “Economics of Giving it All Away”

Lots of required content for this week, just catching up from the last week so this was a busy one! One thing I have been noticing now that we're a month into the class is how I am beginning to think differently about business models I encounter in my day to day life. I notice that I am analyzing them more, looking at how they do (or don't) use social media to their advantage, what they could do to build a better online brand, basically I am just thinking a lot more about what makes each company’s business model work. It’s interesting to have the tools to think about it on a new level, and I have also been thinking a lot about my own business model in a new light, with more thorough understanding. 

http://www.nydailynews.com/life-style/fashion/warby-parker-sees-bright-future-soho-article-1.1312950

I found the articles about Warby Parker really interesting and very counter-intuitive for me. I have been aware of Warby Parker, and have been wanting to try their service next time I need a new pair of glasses. I know they've been quite successful from a business perspective, so was surprised to learn that they were pursuing brick and mortar stores. Generally, it seems that stores begin as brick and mortar, then move to a model that also allows online retail. In Warby Parker’s situation, the opposite is true, making this a unique strategy. Although getting away from the overhead of a retail store is one of the important aspects to Warby Parker’s low prices, they seem to be correct in their thoughts that some customers still want a “showroom” experience for items like glasses.  They want to try on more pairs than they could with the home delivery service, and want the enriched experience of shopping in a store.  The Wall Street Journal article supposes what would happen if giants like Amazon and Google were to open similar showrooms, taking their business from the web to the streets. I’m not sure that would be a sustainable business model for companies who retail such an enormous variety of goods, but I do think Warby Parker may be on to something with their niche retail/web hybrid.  

Week 3: Microsegmentation and Social Media

Materials:

• Read “Origins of Social Media”
• Read “Death of Segmentation”
• Watch Seth Godin’s Ted Talk
• Read Community Relations 2.0
• Watch recorded Breeze session
• Listen to “The Long Tail” podcast
• Read “The Long Tail” article
• Read “The Point of Twitter”

Lots of learning objectives this week – I was travelling and there were more requirements than usual in terms of content, so I fell a bit behind in terms of my completed objectives. I will have a bit to catch up on this, but I did enjoy the content I was able to review, especially “The Long Tail” and “Point of Twitter” articles, which I found very interesting. 

Chapter 1 "The Long Tail," in The Long Tail, pp. 15-26

I enjoyed this article.  I have specific experience in the long tail.  I have an app in the App Store that isn't really niche, but for some reason it still manages to get daily downloads and in-app sales.  With the Apple App Store boasting nearly a million apps, it's nearly impossible to reach customers other than paying for advertising to fight into the top 100.  To compete, as a small developer, I must reach an audience that is looking for something 'different' from the mainstream.  With search keywords as one of the only free tools for advertising, I use keywords that are less searched for, but have considerably less competition.  These long-tail search terms put my app as the first result instead of being buried underneath hundreds of other apps.

The concept of niche products vs hit products being worth the same in net profit to an internet retailer is an intriguing idea.  I'll think more on this concept.

The Point of Twitter (from NPR "On the Media" program of April 23, 2010; 9 minutes)

I enjoyed listening to the NPR piece about Twitter very much. I had to laugh at John Stewart’s comments a couple of years ago – and admit that until quite recently, I felt the same way. To be really honest, I am still not sure I understand the point of Twitter from a consumer’s point of view as the technology becomes more widely adopted. As advertisers have begun to realize the potential gold mine of marketing that is Twitter, it has become more and more of a strictly advertising platform. Yes, there are still the tweets about Justin Beiber, or the newest Kardashian baby name, but increasingly, my feed is full of branded tweets from companies trying to interact with me. The point of Twitter (assuming I get it) is communication among people – and often about how they feel about a company or person or event, etc. I think the interesting thing will be to watch what happens and whether Twitter can balance the communication of its users with the advertising machines trying to communicate to its users. Personally – at some point, there is a magic ratio – I’m not sure what it is – but when my Twitter feed begins to resemble the home shopping network (nonstop commercials all the time) it’s probably time to re-assess whether it’s a tool that I really want to use.

Twitter Infographic:

Week 2: Empowering the Customer

Materials:

• Read “The Dawn of the Human Network”
• Read “How to Build Your Startup Without Building Code” (looking forward to this article.)
• Read “Why the Groundswell and Why Now?
• Listen to “Star Search” clip                    
• Read “The Internet Before Search Engines” 

I was able to complete my learning objectives for this week – and felt that both the Groundswell and Startup articles were quite compelling. Both made me think about my own situation and how best to apply the concepts contained in the articles. 

http://venturebeat.com/2012/01/30/how-to-build-your-startup-without-learning-code/

This quick article by Tony Navarro on VentureBeat attempts to breakdown the barriers between having a web startup idea and actually building the idea.  The major hurdle for most people is actually creating the code.  Navarro recommends his non-coding audience simulate/prototype the idea, take advantage of the low-tech options for branding and marketing, and then try some Web 2.0 sites for fundraising.

I do have some programming skills, but that doesn't make the process a lot easier; in fact, as the founder of a startup, it may be detrimental to have the skills to personally build your idea.  Instead of focusing on the bigger picture of building a business and monetizing you may waste your time fighting bugs and implementing useless features.  Programming skills aren't completely transferable either.  Building desktop applications for enterprise customers won't prepare you for building a dynamic and user oriented website.

Regardless of programming skills, it may always make sense to outsource your code to someone with more free time.

"Why the Groundswell and Why Now?" in Groundswell, pp.3-15

I really enjoyed reading this article. Having been a longtime user of Digg and other user-driven sites, I have seen firsthand how a community can backlash at its “host” for perceived wrongs, etc. The article really made me think about how so many companies want to get on the social media bandwagon, and want to engage their communities… but I can't help but think about all of the companies that have gotten so much more than they asked for. Engaging users is dicey business. I’m sure it’s fantastic when it goes right, but when it goes wrong… it’s hard to control, as illustrated in the “Groundswell” article. What’s worse, when a company makes a mistake in their social media strategy, media tends to love covering it.

McDonalds created the Twitter hashtag  #mcdstories, with the intent of engaging their customers to tell great stories about McDonalds. Instead, the hashtag became widely used to lament horror stories from the restaurant, from wrong orders to surly employees to a full host of digestive complaints. So in essence, McDonalds ended up paying for terrible, and sometimes terribly funny, bad publicity. Making matters worse, the mistake was widely covered in the media.

American Apparel made a similar blunder, tweeting out to its users during Superstorm Sandy that in case they were “bored” during the storm, there would be a big sale in those states affected.  I’m sure their official social media strategy did not call for turning national disasters into advertising opportunities… but that’s what ended up happening. These are just two of the examples I remember of a social media strategy going horribly wrong – and they both illustrate how essential it is to have tight control over social media campaigns and consider all possible outcomes! The groundswell can be hard to gauge, and even harder to control once a mistake has been made.

History of Social Media Infographic:

Week 1: How the Web Has Changed Marketing Strategy

Materials:

• Consumed introductory materials.
• Begin to dive into course materials and understand the framework for assignments and deliverables.
• Read first 50 pages of textbook, understand Business Model Canvas.
• Read “Does the Internet Make You Dumber?” (I really, really hope not.)
• Read “Do You Trust This Face?”
• Watch clip of Katie Couric & Bryan Gumbel discussing the “series of tubes” that is the internet.  (Wow)

I was able to complete all of my learning objectives for the week.  I really enjoyed the readings and video clip.

"Do You Trust This Face?" by Alex French, GQ, December, 2008

I had an interesting experience the other day that brought to mind the “Do You Trust this Face?” article from GQ. The experience really reinforced to me the ways in which Facebook has changed the way we approach the internet – and what it has made possible in doing so.  Earlier this week, I signed up for an account with Airbnb.com, a service devoted to helping strangers rent their room/apartment/house to other strangers for short term stays.  In order to establish my identity and have the site confirm me as trustworthy and legitimate, I had to provide my Facebook and LinkedIn information, which were then cross referenced to prove that I was who I said I was, that I was a legitimate, real person, worthy of renting someone’s apartment. The fact that I was willing to give up my privacy and share with other members a sense of who I was in “real life” to legitimize myself online was interesting to me. Would a site like Airbnb work without exchange of cross-referenced personal information? The more I thought about it, the more I thought that yes, if I was going to rent my house to someone, I would like to see their Facebook and LinkedIn accounts.  Really made me think about how these services have changed the way we do business, approach strangers, and market our services. Airbnb has found a unique way to bridge the awkward issue of letting a “stranger” stay in your house – creating an interesting market space that may not have been as possible or approachable without social media.

Social Media Explained

First Post

Hello World!

My name is Kelly and this blog was made for my KSB class X501: Marketing in the Era of Digital Technology.  I will post my thoughts on class readings here weekly.  Please feel free to comment and share.