Home Shopping 2.0: ERA INNOVATION

ERA Europe 2008 - Home Shopping 2.0 - Jeff Molander

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I recently lectured at the Electronic Retail Association (ERA) Europe’s Electronic Home Shopping Conference 2008, Monte Carlo, June 22-24. What a great time I had presenting along side of the likes of Livemercial’s Johnny Mathis Jr., Elie Boudara of ID SIDE (who presented a remarkable, pioneering case study on how product placement strategies can intersect with long-form, video generated, Web-based selling!), Andreas Büchelhoffer (who is pioneering auction-based DRTV models in Germany), Anders Hjorth of Relevant Traffic, Rok Hrastnik of Studio Moderna, Rodrigo Sepúlveda Schulz of vPod.tv and many others.

I focused my lecture on how DRTV (direct television/infomercial) marketers can, should be and are transferring existing best practices into their Web-facing business units to drive increased sales. Like “magalogers” (catalogs that take a magazine-like, content rich approach), direct TV companies are the hands-down masters of the “long-pitch” sell technique involving info-tainment but need to look out for the likes of newcomers, HoneyShed.com, who are mixing the old (same approach to video-based selling) with the new (interactive EXPERIENCES that consumers crave).

How can DRTV marketers take the Internet bull by the horns? They’re compelled to address the multi-channel shopping problem that Rok Hrastnik addressed so well. That is, capturing consumers who are interrupted on their way from TV to purchase via the Web (interrupted by sellers of knock-off products, etc. etc.).

Rok (who puts Studio Moderna’s money where his mouth is) and I see eye to eye — it’s all about becoming a publisher of content that customers crave. It’s not about the short-term sale; rather, about a long-term, trust-based relationship with a customer that keeps your brand “top of mind” when they’re considering making a purchase. Rok’s social marketing case study focused on his Dormeo.com brand. The secret sauce? Sex-related articles for men + weight loss content for the ladies = sales. Such an approach also supports word of mouth marketing given how the content is extremely shareable (easily syndicated) and presented to consumers based on their own consumption preferences (ie. email, RSS feeds, etc.).

Shopatron PATH - Social Shopping 101 (VIP READ MT)

THIS IS AN EXCELLENT POST FROM THE SHOPATRON BLOG ON SOCIAL SHOPPING

Shopatron PATH - Marketing Insight and News for Shopatron Clients and Partners

ISSUE 4, JUNE 2008

Social Shopping 101 (Part 2 of 2)

By Ed Stevens and Greg Squires

How can a manufacturer brand leverage social networks to build its brand and drive online sales?

Provide value to connected consumers in these rapidly growing Internet communities, and you could spark a powerful, self-sustaining marketing force. Jump into social networks halfheartedly in a cynical attempt to take advantage of a trend, and you could find yourself picking up the pieces of a major brand management headache.

Social media marketing has been heralded as “the next big thing” on the Web. Big brands such as Nike, Coca Cola, Adidas, and many others are spending marketing resources on exploring the social networking opportunity. Many corporate Web sites are incorporating social engagement tools, such as blogs, forums, and video/photo uploads. There are literally hundreds of “social networking” sites on the Internet.

In PATH Issue 3, we examined social shopping specifically and outlined some rules of thumb in experimenting with this trend. Social shopping sites, like Kaboodle or Pronto, can benefit branded manufacturers by providing free traffic, facilitating listening to customers, and optimizing for search engine results.

We did not look at MySpace or Facebook, because these two sites are in a class of their own. No social networking sites that specialize in shopping or anything else have the traffic that MySpace or Facebook have.

In this PATH Issue 4, we break down Facebook and MySpace and explain the various marketing opportunities that exist on these sites for consumer goods manufacturers. We conclude with some recommendations as to how a brand might begin using these sites.

Undeniable Traffic Volumes

The traffic volumes to Facebook and MySpace are huge. These major social engagement sites are in the top 10 visited sites across the entire Web, near Google, Yahoo!, YouTube, and Wikipedia. It's a reality that these sites are grabbing the attention of online consumers, so the obvious question that brands must ask is, “How do we tap in?” or maybe, “Is there a way to tap in?”

The first iteration of MySpace was created by employees of eUniverse in August of 2003. The entrepreneurs saw potential in the 2002 launch of Friendster, a social network that is still active today. eUniverse used its 20 million users and email subscribers to quickly move MySpace to the head of the pack of social networking sites.1 In July 2005, eUniverse was bought for $580 million by News Corporation, the parent company of Fox Broadcasting Company. MySpace currently has 68 million unique monthly visitors, according to the latest numbers from compete.com.

Facebook got its start on the Web in early 2004. Mark Zuckerberg, a Harvard student at the time, initially created Facebook as a way for his Harvard friends to interact with each other. It quickly gained traction at Harvard in early 2005 and expanded to other Ivy League schools. By the end of 2005, more than 2,000 colleges and over 25,000 high schools throughout seven countries had networks on Facebook.2 By beginning with a limited release only to high school and college networks, it gained an initial buy-in from teens and twenty-somethings. After opening up to all users in September 2006, the site's growth has been phenomenal. Facebook reports that its "fastest growing demographic is those 25 years old and older."3 Facebook currently has 31 million unique monthly visitors, according to the latest numbers from compete.com.

Alexa shows steep increases in traffic on both Facebook and MySpace over the past 24 months, as displayed in Figure 1 below. Traffic levels to sites like shopping.com, BizRate.com, and PriceGrabber.com – three of the “solo-hunter” sites we reviewed in the last issue of the PATH – are nowhere near that of Facebook and MySpace.

Figure 1

Facebook / MySpace website traffic

Marketing Opportunities on Facebook & MySpace

Facebook and MySpace provide multiple options for brands to engage with their users. Facebook has five marketing programs: Pages, Social Ads, Display Ads, Platform, and Beacon. MySpace provides two consumer-facing initiatives: Profile Pages and Display Ads. These initiatives vary in their setup costs and their efforts to manage, and each of them has a unique purpose for marketers.

Sorting out “Pages” and “Profiles”: the Free Stuff (free?)

Facebook Pages

Any individual who signs up for Facebook gets a user profile. You can post pictures, connect to friends, and see what your friends are doing.

A Facebook Page is similar to a user profile and is what companies set up in Facebook. A Facebook Page can be created for any kind of organization or business: a local restaurant, a TV show, a sports team, or a consumer brand.

* Facebook Pages can have discussion boards, lists of “fans,” image and video channels, events listings, RSS feeds, product reviews, and more. The Page creator controls whether each section of the Page is displayed.
* Individuals with Facebook accounts become “fans” of their favorite brands and products and use this as a way to display their interests to friends and family.
* Facebook Pages are free and allow organizations and brands to connect with consumers.
* A brand's Facebook Page can be promoted on your Web site, by following the instructions on the Facebook Web site.

MySpace Profiles

MySpace does not differentiate between individuals and organizations. Both set up Profiles. A Profile in MySpace behaves like a Profile or a Page in Facebook.

* A brand creates a Profile. Individuals can “add” the brand as a friend.
* Images, videos, contests, featured products, company news, articles, and blogs can be posted.
* Consumers can post comments to the Profile (if enabled), and a conversation between brand and consumer can be established.
* MySpace Profiles are free to set up; the Profile's look and feel can be customized to match brand image using HTML coding.

MySpace Branded Profiles

For marketers with large budgets, MySpace has a relatively new program call Branded Profiles. Like normal MySpace Profiles, the Branded Profiles allow for sharing images, adding friends, adding text, blogging, etc. The primary differences are that visitor demographic information is available for Branded Profiles, and they do not have any display ads from other companies.

* Minimum cost is $10K per month.
* MySpace account manager is available to help target, based on consumer profiles.
* Reports are available on traffic to the profile, including visitor demographics.

Facebook Display Ads

Facebook allows advertisers to purchase digital display advertisements through its site.

* Ad inventory is available exclusively through Microsoft Digital Advertising solutions.
* Display ads can be targeted by geography, schools attended, and age.
* Display ads generate relatively low traffic. Some speculate that social networkers are not usually in buying mode when they connect with friends.

MySpace Display Ads

Advertisers can also purchase display ads through the MySpace site.

* Ad inventory is available through Advertising.com and other ad networks.
* Display ads can be targeted as in Facebook.
* MySpace tends to display more ads per page, creating a more chaotic feel with less brand control than Facebook.

Facebook Social Ads

Facebook Social Ads are one of the newer “social” ways to advertise.

* Display ads are in and around the “News Feed,” a constantly updating list of actions made by friends on Facebook. Social Ads can target specific segments of consumers to promote individual products. For example, a shoe manufacturer can advertise men's skate shoes to men over the age of 18 who have an interest in skateboarding.
* Tracking performance is handled with Facebook Insights, a free metrics solution.
* Can promote a Facebook page, a website page, or a product page.
* Targets consumers by age, gender, interest, location, education level, and more. Estimates the size of the target audience.
* Creates an ad with a picture and text.
* Can pay on a cost-per-click or cost-per-1000-impression basis.

Facebook Beacon

Facebook has a built-in application that enables consumers to share purchasing activities with friends on Facebook.

* A movie rental activity can be shared: Meagan Marks added Top Gun to her favorites on Blockbuster.
* A purchase activity can be shared: Jim Bossler bought an iPod Shuffle at apple.com.
* Very little integration is required for setup. To enable the Facebook Beacon feature, you define the actions to be displayed on Facebook and add a few lines of code to the site.
* A lot of controversy has been raised over Facebook's Beacon for alleged misuse of private information. With the Beacon program, Facebook only allows for opt-out of information sharing, rather than requiring a user opt-in.
* Companies have been slow to adopt Beacon due to privacy concerns and consumer pushback.

Facebook Platform (Applications)

Custom Facebook applications are a flexible marketing tool but also the most difficult to create. Over 20,000 applications have been developed since last May.

* Develops custom applications that allow users to interact/engage with a brand.
* Open platform to integrate data/products into the application.
* Provides product recommendations based on the user's interests and other profile data.
* Can also provide opportunities to sell ad space as a revenue generator.
* Requires development in PHP/JavaScript, integration with Facebook's API, and learning Facebook's proprietary languages.

Figure 2 below outlines each program, comparing its costs and effort to manage.

Figure 2

Figure 2

Facebook / MySpace program comparison

Where to Begin

MySpace and Facebook provide several reasonable marketing opportunities. A good way to test marketing is through the inexpensive or free options available.

* Find out if a page for your brand has already been created; if so, you should definitely create the official branded site.
o One social media marketer, in reference to one of the brands he works with wrote that the “brand was so popular among the demographic that uses MySpace that well-meaning customers were creating profiles that appeared to be the official MySpace of the company. Customers were taking company logos and images off the company Web site, and pasting them on their MySpace profiles. Obviously, this was a problem. Several of the MySpace profiles contained content that the company did not approve of, and did not want associated with the brand. In their case, they needed an official MySpace presence in order to prevent this confusion.” 4
* Create a free Facebook or MySpace page and promote it from your Web site. Spend some extra time at the outset to invite friends, write content, post pictures, and get the ball rolling, until it gains some momentum. Take part in the conversations, and be prepared to honestly represent your brand.
* MySpace tends to be a more open community (chaotic and free form). Facebook is more understated and controlled. Consider which venue is better suited to the brand image you want to portray. Some brands may not have many consumers using either Facebook or MySpace. You can get a good feel for community activity levels by searching for keywords you know.
* Be a legitimate member of the community. Don't be a corporate spammer. If you are a true representative of your brand, hear what consumers have to say.
* Offer something valuable so that the new program launch can be immediately successful. Run a giveaway contest or a promotion through the Facebook Page or MySpace Profile. An attractive deal will create buzz on the Web and draw consumers to the page.
* Build some links pointing to these pages so that they can get ranked on search engines for your brand terms. Link to your new page from your Web site for the SEO benefit.

MySpace and Facebook are so popular today, it is important for brand marketers to stay up with their growing influence. Be sure you know what is happening with your brand, then try something free or low-cost to see if it drives traffic or sales.

Footnotes

1. “MySpace”, Wikipedia
2. “Facebook”, Wikipedia
3. “Press Room”, Facebook
4. “Why Every Business Needs a MySpace and Facebook Profile”, Palmer Web Marketing

Cutting Costs with Online Coupon Sites

Web sites that offer money-saving discounts are enjoying a resurgence in the current economy, as consumers surf for bargains

by Catherine Holahan

• View Slide Show

Coupons are making a comeback. In the face of rising food prices and a slowing economy, consumers are clipping coupons once again. Only, they don't need scissors and a local newspaper so much as a computer, printer, and maybe a mobile phone.

The number of page views on Web sites that feature money-off coupons for all manner of consumer products surged 38%, to 281 million, in March from a year earlier, compared with 5% for the Internet as a whole, according to comScore (SCOR). Those visitors spent a total of 145 million minutes on the sites, a 37% increase. While the number of new users to coupon sites isn't growing faster than the larger Internet audience, existing coupon site users are certainly becoming more active. "User engagement by deal-seekers appears to be ramping up," says comScore analyst Andrew Lipsman. "As a general rule, something like online coupon site activity would increase as a result of macroeconomic trends."

Traffic Growth

Individual sites say they're detecting increased use. Coupons.com and RetailMeNot.com say they have seen large traffic spikes in the past three months. Visitors to Coupons.com, a decade-old site that lets users print coupons that can be redeemed in stores, grew 35% in the first three months of 2008, compared with the prior quarter, says the site's CEO, Steven Boal. Typically, quarterly growth averages 22% to 23%, he says. Similarly, RetailMeNot says its growth for February, which typically slows after the holiday shopping season, is already back at December levels. "There is definitely an increased use of coupons across the board," says RetailMeNot co-founder Guy King.

Fueling the traffic growth are rapid increases in food prices (BusinessWeek, 5/1/08) and signs of economic slowdown that are damping consumer sentiment and prompting consumers to hunt for bargains. Costs of staples such as rice have surged in recent months, reflecting rising fuel prices and in some cases, limits on exports. Some analysts also blame government policies that provide incentives for farmers to devote more crops to biofuel production (BusinessWeek, 5/1/08).

Bargains Via Computer or Cell Phone

In recognition of the rising demand for bargains and in hopes of luring cash-strapped consumers, retailers are making coupons more readily available online. In April, Coupons.com featured more than 120 coupon offers from the retailers that distribute coupons on its site or use its technology to offer discounts on their own sites, Boal says. Typically, the number is about 100. "Coupons move products off the shelf," he says. "That is their No. 1 job."

Digital coupons typically work in two ways. On Coupons.com, store owners create coupons, with unique serial numbers, that can be printed and redeemed in stores. Coupons can also have unique promotional codes that shoppers can use on e-commerce Web sites to receive discounts on online purchases. RetailMeNot lets users post and share such digital coupons on its site.

Retailers are also relying on wireless technology to capitalize on consumers' bargain-hunting tendencies. According to a recent report by Juniper Research, retailers will send as many as 3 billion mobile coupons to wireless phone users by 2011, resulting in $7 billion in discounts redeemed.

Consumer Pain, Coupon Gain

It hasn't always been a given that consumers would warm to online coupons. After the circulars tucked between newspaper sections began disappearing, coupons began surfacing online. But the time involved in finding coupons and the cost of the ink to print them seemed to negate much of the cents in savings. Coupon sites have taken off as more consumers have become motivated to look for even small discounts to reduce ever-increasing grocery bills.

The commodities price hike has caused everyone from boxed cereal giants General Mills (GIS) and Kellogg (K) to meat producers such as Tyson Foods (TSN) to hike prices. More price increases are to come. After reporting a $5 million loss in its second quarter on Apr. 29, Tyson CEO Richard Bond said prices will continue to rise.

Consumer pain is turning out to be coupon sites' gain. Coupons.com provides retailers with coupon-marketing and -serving technology. The more consumers printing and using their coupons, the more retailers are likely to work with the site. RetailMeNot sells ads on its site through Google (GOOG) and collects commission from the coupon-driven traffic to retailers' Web sites such as Amazon.com (AMZN). "The net effect is that people are trying to get the most of their shopping through coupons," says King.

For a look at the sorts of coupons that are particularly popular right now, check out the BusinessWeek.com slide show.

The Growing Influence of Online Social Shoppers

APRIL 7, 2008

Who do consumers trust?

Increasingly, each other.

According the Edelman “Trust Barometer,” consumers feel the most credible source for information about a company—and by inference, products— is a “person like themselves.”

Now with social shopping sites, product blogs and online ratings and reviews, consumers have the means to communicate their opinions about products and companies to tens of thousands of other consumers “like themselves” at a critical point in the sales cycle—the beginning.

“While blogs and customer ratings and reviews have long been a familiar part of the Internet commercial landscape,” says Jeff Grau, eMarketer Senior Analyst and author of the new report, Consumer Interactions: Social Shopping, Blogs and Reviews, “over the past two years social shopping sites have emerged as another way for customers to share product experiences and opinions.”

Social shopping sites attempt to replicate the emotional and social aspects of real-world shopping—such as strolling through mall stores with friends or swapping product stories at the office with colleagues.

“The sites typically provide tools for users to download photos of interesting products found on retail Web sites to their profile page or blog. Users then share and discuss their findings with the community,” says Mr. Grau. “To buy an item, a shopper simply clicks through on the product photo to the retailer’s Web site, where the purchase is made.”

And shoppers do click.

According to the “Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape” report from JupiterResearch, online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions.

A survey from the IBM Institute for Business Value found that the two leading reasons why people contribute content to social shopping sites are the need to feel part of a community (31%) and recognition from peers (28%).

“Today, marketers are increasingly reaching out to the growing number of online consumers who take their shopping cues from peers by targeting influential product reviewers, bloggers and social shoppers,” says Mr. Grau.