demand
Two Social Success Stories – Groupon and FourSquare
Groupon can add the following useful features:
- allow users to request the category, type, or even specific coupons they want — this can generate insights about demand and also tailor the offerings to the individuals; right now, most of the offers are local but are not relevant to me
FourSquare can add relationships with local businesses to offer specials or deals to frequent check-ins or Mayors — down to the specific Starbucks store or local hardware store.
Mark Cuban foretells Netflix demise, sees a future filled with on-demand video
Source: http://www.engadget.com/2010/05/07/mark-cuban-foretells-netflix-demise-sees-a-future-filled-with-o/
To call Mark Cuban eccentric would be akin to describing the ocean as wet, but what’s not so often acknowledged about the Dallas Mavericks owner is the sharp mind and commercial nous that have gotten him to the position of hiring and firing millionaire ball players. One of Mark’s recent blog posts, entitled “The future of TV … is TV,” got the attention of NewTeeVee, who sought to debunk his contention that VOD (video on demand) services from cable operators would become the primary means by which we consume digital media in the future. They cite the growing success story of Netflix’s digital distribution model, as well as the 12 million hours of March Madness video consumed via CBS’ web portal, in arguing that web streaming is indeed the great new hotness.
Mark’s response tackles Netflix head on, and points out that the company’s rapid growth is about to start working against it, with movie studios and other content providers likely to jack up prices and demand further concessions from the streaming service as it turns into a real competitor to cable companies. According to him, Netflix is presently getting its content at prices that are unsustainable, and his prognostication is that content owners seeking bigger levies — together with the expansion of VOD choice, which he sees as foolproof compared to the overwhelming complexity that web streaming entails — will lead to Netflix passing costs on to the consumers and losing out to cable operators. Irrespective of whether you agree with him, the whole exchange is well worth a read. Use the links below to get filled in.
Mark Cuban foretells Netflix demise, sees a future filled with on-demand video originally appeared on Engadget on Fri, 07 May 2010 10:09:00 EST. Please see our terms for use of feeds.
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ClickZ articles by Augustine Fou, PhD
Dr. Augustine Fou is Group Chief Digital Officer of Omnicom’s Healthcare Consultancy Group. He has nearly 15 years of digital strategy consulting experience and is an expert in data mining, analytics, and consumer insights research, with specific knowledge in the consumer payments, packaged goods, food/beverage, retail/apparel, and healthcare sectors.
Dr. Fou has provided strategic counsel on the use and integration of online marketing to clients such as AT&T, IBM, Intel, ExxonMobil, MasterCard, Unilever, Pepsi, DrPepper, Frito Lay, Taco Bell. KFC. Atari, Conde Nast, Hachette Filipacchi, Victoria’s Secret, Liz Claiborne, and others. He has served as expert witness on online payments for the Federal Reserve Bank of New York, and advised government agencies such as the Norwegian Trade Counsel, the Gouvernement du Quebec, Invest in Sweden Agency, and the Canadian Consulate.
Dr. Fou is an Adjunct Professor at New York University in the Integrated Marketing Department of the School for Continuing and Professional Studies. He also writes a monthly column for ClickZ’s Experts Columns on Integrated Marketing and is a frequent speaker and panelist at online and advertising industry conferences.
He started his career with McKinsey & Company and recently served as SVP, Digital Lead at McCann/MRM Worldwide. Dr. Fou completed his PhD at MIT at the age of 23 in the Department of Materials Science and Chemical Engineering.
Recent articles by Augustine Fou
The 22 Immutable Laws of Marketing No Longer Apply, Part 3
Debunking the laws of singularity, unpredictability, success, failure, hype, acceleration, and resources. Last in a three part (3 comments) Apr 1, 2010
The 22 Immutable Laws of Marketing No Longer Apply, Part 2
Why the laws of duality, the opposite, and others no longer hold true. Second in a three-part (1 comments) Mar 4, 2010
The 22 Immutable Laws of Marketing No Longer Apply
The game has changed as the balance of power shifts away from advertisers to the very people they used to target. First in a three part (14 comments) Feb 4, 2010
10 Commandments of Modern Marketing
A list of the 10 rules every marketer should follow to meet consumer needs in (18 comments) Jan 7, 2010
Is Believing in Behavioral Targeting Like Believing in Santa?
Should we have grown out of our naïve belief in behavioral (25 comments) Dec 17, 2009
What’s Wrong With the Net Promoter Score
Three reasons why the Net Promoter score is a waste of (19 comments) Nov 19, 2009
How to Do Social Marketing in Heavily Regulated Industries
Financial services, pharmaceutical, and healthcare are ripe for social marketing. Here’s (11 comments) Oct 22, 2009
A New Definition of ‘Digital’
Defining ‘digital’ as the collection of habits and expectations of today’s consumers — and what that means to (7 comments) Sep 24, 2009
Metrics, Metrics Everywhere
Thanks to social networks and digital tools, metrics can provide relevant marketing research in real time and reveal new business (3 comments) Aug 27, 2009
Branding Today: Why It’s Ineffective, Irrelevant, Irritating, and Impotent
Brands must act on real-time consumer feedback to continuously develop awesome (51 comments) Jul 31, 2009
Advertising Does Not Create Demand, But…
It may help fulfill demand. Understand the (18 comments) Jul 2, 2009
Consumers Have Changed, So Should Advertisers
Five ways that consumers have irreversibly altered their expectations online and (7 comments) Jun 4, 2009
Social Media Benchmarks: Realities and Myths
Benchmarks to avoid and others to embrace. (5 comments) May 7, 2009
The ROI for Social Media Is Zero
If social marketing’s done right, the potential ROI could be infinite. Five tips to get you (51 comments) Apr 9, 2009
How to Use Search to Calculate the ROI of Awareness Advertising
Planning an awareness campaign in TV or other media? Advertisers can now correlate money spent on that campaign to a lift in sales — and estimate the return on (4 comments) Mar 12, 2009
Social Intensity: A New Measure for Campaign Success?
A look at two metrics that online marketers should pay attention to today. And they are not frequency and (4 comments) Feb 11, 2009
Beyond Targeting in the Age of the Modern Consumer
Three tips for using “missing link” marketing to solve targeting’s Jan 15, 2009
Experiential Marketing
Consumers are savvy and informed; they won’t just take your word on a product. Experiencing the product is more important than (1 comments) Dec 18, 2008
Search Improves All Marketing Aspects
Search is much more than just an opportunity for marketers to push out another Nov 20, 2008
Social Commerce: In Friends We Trust
How to integrate social networks into your marketing (1 comments) Nov 6, 2008
"We Are Not Prepared"
Washington insiders recently sweated out a real-time war game where a cyberattack crippled cell phone service, Internet and even electrical grids across the U.S. The unscripted, dynamic simulation allowed former White House officials and the Bipartisan Policy Center to study the problems that might arise during a real cyberattack emergency, according to Aviation Week’s Ares Defense Blog.
The Policy Center’s vice-president reports “”The general consensus of the panel today was that we are not prepared to deal with these kinds of attacks.”
The nightmarish scenario that unfolded represented a worst-case example. As former secretary of Homeland Security Michael Chertoff noted, many cyberattacks can be stopped if individual cell phone or Internet users simply follow the best practices and use the right tools. Similarly, another participant pointed out that private Internet companies would not sit idly by as a virus ran amok.
A collapse of power across the U.S. also only took place when the simulation brought in factors such as high demand during the summer, a hurricane that had damaged power supply lines, and coordinated bombings that accompanied the cyberattack and subsequent failure of the Internet.
Still, the war game highlighted crucial issues about the government’s own reliance upon communications that might go down during a real-life scenario. One of the biggest problems was how the President ought to respond to a situation that caused damage like warfare but lacked an immediately identifiable foreign adversary. Smaller-scale cyberattacks have already complicated real-world diplomacy, such as the alleged Chinese cyberattacks on Google and other U.S. companies.
Ares Defense Blog questioned a curious missing element from the simulation, in that there was no mention of what happened to phone or Internet service in the rest of the world. Surely a nation that decided to launch cyberattacks against the U.S. would take safeguards to protect its own crucial communication services, which would possibly help U.S. officials narrow down the list of suspects.
Another question seemed more mundane but equally important — how would the government activate the National Guard with cell phone service down?
The Pentagon’s DARPA science lab recently pushed for a “Cyber Genome Program” that could trace digital fingerprints to cyberattack culprits. But identifying whether a cyber attack came from individual civilians, shadowy hacker associations or government cyber-warriors has proven tricky in the meantime.
[via Ares Defense Blog]
The Grand Unified Theory of Marketing(tm) – Digital String Theory
Just as physicists and mathematicians have been searching for the grand unified theory of the universe, I have been looking for a way to tie together the disparate disciplines of marketing and advertising, a way to correlate metrics from different industries that interrelate with marketing (e.g. market research, Nielsen, etc.), a way to put all past theories in context and perspective (Michael Porter’s Five Forces, Net Promoter, etc.), and a way to explain marketing successes and failures — all in one.
My method is the scientific method – which is simply put doing experiments and making observations that either support or refute hypotheses.
A grand unified theory will also need to be able to take into account phenomena such as social networks, etc. What are the organizing principles of such; what is the value? Why now?
Using digital tools — such as search volume trends — we can start to correlate marketing spend effectiveness across different forms of media and also different advertising and marketing techniques. The example below compares eTrade and @Drobo. What is most embarrassing is that eTrade, a well known brand from the first dot-com heyday, spent lots of money creating and airing TV ads which it hoped would go viral. They even paid for Superbowl ads for the last 2 years to promote the “eTrade talking babies” as you see from the 2 spikes in search volume during February of 2008 and 2009. However, when compared to Drobo (a startup company that developed a very easily upgradeable back up hard drive array), it is shocking to note that Drobo spent NOTHING on advertising and relied entirely on word of mouth and an awesome product. And their search volume is not only larger than eTrade but also sustainably larger despite zero advertising and media cost. The “totals” even suggest that the volume under the curve of Drobo is 8X (EIGHT TIMES) that of eTrade.
So if you consider that eTrade spent millions of dollars to create the TV ads and even more millions of dollars to air them on TV in order to drive interest, demand, and hopefully new customers, then Drobo can be considered to have gotten the equivalent of 8X more dollars in advertising and media – for FREE using techniques and channels other than TV advertising. So what does that say about the relative value of TV advertising compared to these other, newer techniques?
godaddy vs megan fox
Occasions and Holidays Drive Movie Box Office Sales, Not Advertising
Taking the top box office results for each of 52 weekends from the past 10 complete years (1998 – 2008; Source: IMDB.com) we see consistently that occasions like Valentines, Memorial Day, July 4th, and Thanksgiving show increased movie going activity. People have more time during these holidays to go to the movies and Valentines is a date+movie occasion. Also, during the summer, many people go to the movie theatre to escape the heat so there is an overall hump every year during the summer months — from Memorial Day to Labor Day.
People go out during Valentines, Memorial Day, July 4th, and Thanksgiving. And they still spend what they planned to spend — 2 tickets for movie — they didn’t buy 2 more tickets and see a second movie on the same date or holiday weekend. If they had several good movies to choose from (often, they don’t), they would choose to spend the finite dollars on the one movie they really wanted to see. The overall movie spending “pie” did not increase much, if any, year over year.
1998 $4,055,194,733 n/a
1999 $4,253,601,768 5%
2000 $4,496,554,005 6%
2001 $5,003,433,737 11%
2002 $5,489,974,199 10%
2003 $5,581,797,720 2%
2004 $ 5,697,299,530 2%
2005 $ 5,524,566,579 -3%
2006 $ 5,660,826,625 +2%
2007 $ 5,968,027,963 +5%
2008 $ 5,887,193,490 -1%
The chart below shows a red line which is the average of all 10 years. The 10 thin blue lines are the annual lines from1998 – 2008, inclusive and these are plotted as actual dollars. They come out right on top of each other.
Movie advertising, which runs into the hundreds of millions of dollars a year, has failed to noticeably increase the overall spending year-round or even during specific times. The chart below shows the differentials (difference between an annual line and the 10-yr average line). These all hover closely in the +$50M and -$50M band. The amplitude of the 10-yr average (red line) is larger than $50M in the summer hump — implying that the average change in movie ticket sales due to normal seasonality is larger than the change in amplitude caused by ALL movie advertising combined.
And the summer “hump” is due to actual demand (people going out to movie theatres, some to escape the heat) not due to advertising. The only effect of advertising is to share-shift from one movie to another — the total spending remains consistent and even seasonal variations are consistent — a “zero-sum game.”
All-Time USA Box office
Source: IMDB.com
| Rank | Title | USA Box Office |
| 1. | Titanic (1997) | $600,779,824 |
| 2. | The Dark Knight (2008) | $533,316,061 |
| 3. | Star Wars (1977) | $460,935,665 |
| 4. | Shrek 2 (2004) | $436,471,036 |
| 5. | E.T.: The Extra-Terrestrial (1982) | $434,949,459 |
| 6. | Star Wars: Episode I – The Phantom Menace(1999) | $431,065,444 |
| 7. | Pirates of the Caribbean: Dead Man’s Chest (2006) | $423,032,628 |
| 8. | Spider-Man (2002) | $403,706,375 |
| 9. | Star Wars: Episode III – Revenge of the Sith (2005) | $380,262,555 |
| 10. | The Lord of the Rings: The Return of the King(2003) | $377,019,252 |
| 11. | Spider-Man 2 (2004) | $373,377,893 |
| 12. | The Passion of the Christ (2004) | $370,270,943 |
| 13. | Transformers: Revenge of the Fallen (2009) | $367,614,540 |
| 14. | Jurassic Park (1993) | $356,784,000 |
| 15. | The Lord of the Rings: The Two Towers (2002) | $340,478,898 |
| 16. | Finding Nemo (2003) | $339,714,367 |
| 17. | Spider-Man 3 (2007) | $336,530,303 |
| 18. | Forrest Gump (1994) | $329,691,196 |
| 19. | The Lion King (1994) | $328,423,001 |
| 20. | Shrek the Third (2007) | $320,706,665 |
| 21. | Transformers (2007) | $318,759,914 |
| 22. | Iron Man (2008) | $318,298,180 |
| 23. | Harry Potter and the Sorcerer’s Stone (2001) | $317,557,891 |
| 24. | Indiana Jones and the Kingdom of the Crystal Skull(2008) | $317,011,114 |
| 25. | The Lord of the Rings: The Fellowship of the Ring(2001) | $313,837,577 |
The Perfect Babe – Megan Fox (pics)
Megan Fox – The Perfect Babe Product Placement
No, this post is not about Megan Fox. Well, yeah it is. But it’s about the MARKETING of Megan Fox.
Megan Fox has been around in films and TV since 2001 (see filmography below). But it wasn’t until 2007 when she starred in the first Transformers movie that she burst on the scene and became an overnight mega celebrity, especially online (see Google Search Volume chart). If you look at Ford’s search volume during the same period, there was NO lift in search that was detectable — there probably was some lift, but it is simply not detectable.
So Megan Fox went from very very little awareness to not only massive awareness, but also massive demand — people remembered her name and even took action (performed searches on her name). If some product placements would have had only 10% of the success of the “megan fox” product placement, they might actually justify the immense cost a bit better (millions of dollars paid by the advertiser to the movie makers to place products into the storyline of the movie).
And why is she “perfect,” in the marketing sense, of course? Her search volume has not only sustained but also continued to grow. She was not a flash in the pan that went away after the advertising/media dollars stopped or the public interest died off (see the snuggie and etrade search volume charts below).
transformer girl, second girl in transformers, other girl in transformers – Isabel Lucas
Padma Lakshmi makes sweet-and-savory love (pics) to …
My colleagues know I have argued against advertising’s ability to do “demand generation” — create need where there was none before. Instead I have always argued that advertising solves an awareness “missing link” for demand that was already there. In other words, a user has a need. Advertising puts a new product or a product that a particular user was simply not aware of before on his radar screen. And after further research, if the product fulfills that need he buys. Advertising rarely creates NEW demand. For example, we buy 4 quarts of milk per week because we have 2 kids. No amount of milk advertising will make us buy 5 quarts, because we simply don’t need it. Or, we’ve just bought a minivan. No amount of advertising, no matter how cool the family or the kids in the ad, will make us buy another mini van. If we just locked in health insurance this year, we are likely not to buy more or to switch, just because it is such a hassle. Make up more of your own examples.
But, I have to say, Carl Jr’s ad with Padma is really really making me want their bacon, barbecue sauce burger. Or is it just ANY bacon, barbecue sauce burger? Or wait, is there even a Carl Jr around here? hmm ….. I guess I’ll just look at the picture some more… 
Source: AdFreak
Padma devours fast food, Lindsay Lohan goes retro for Fornarina and vampire ads raise the stakes
March 30, 2009
-By Tim Nudd
Carl’s Jr. serves it piping hot.
When we learned in February that Padma Lakshmi was filming a commercial for Hardee’s/Carl’s Jr., it didn’t seem likely that the Top Chef host would make as big a splash as Paris Hilton did with her infamous car-wash spot for the fast-fo.od company in 2005. But Lakshmi has actually put her own impressively suggestive mark on burger advertising with the new ad, in which she makes sweet-and-savory love to a Western-bacon deluxe on the front steps of a city apartment building. Paris Hilton, please pack your knives and go.
read more….
http://www.adweek.com/aw/content_display/news/agency/e3ie96e4a3e8c042db21628ca3995645a52
the economics of advertising sucks, but it will suck a lot more soon
it’s a simple matter of supply and demand. Let’s do a thought exercise.
1. eMarketer forecasts that retail e-commerce will grow roughly 10% per year for the next few years. This means that the total “pie” of people spending online will only grow by an average of 10% per year. Note that sales is (or should be) the goal of advertising. So that’s why we are looking at e-commerce sales and comparing it to online advertising because both are completed in the same medium and we can eliminate cross-media uncertainties and breakdown of tracking.
2. online advertising is still exploding with trillions of pageviews per month, thanks to social networks which throw off ungodly numbers of pageviews when people socialize with others. The Compete chart below shows the top social networks which rely on banner advertising (impression-based advertising) to make revenues. Notice that just Facebook and Myspace alone generate 115 BILLION pageviews a month. And if you consider that Facebook shows 3 ads per page, that would be 250+ BILLION impressions per month served by Facebook alone. Furthermore, the rate at which pageviews grow is 250% – 1,000% per year, depending on the site in question.
3. In the online medium, we have end-to-end tracking from the advertising (banner impression) through to the sale (e-commerce). The banner is served (impressions); a percent of users click on it to go to a site (click through rate – CTR); a percent of those make their way through the site and end up completing a purchase online (conversion rate). Those users who are looking for something and who are considering buying something will be online searching and researching. Those are the ones who are likely to click on banner ads, compared to others who are online to do something else, like write email, socialize with friends, etc. And if the purchase is their ultimate end-goal (to make a purchase) we have a farily reliable indicator of the growth in not only such interest but also the completion of the task — namely, e-commerce, which grows at 10%.
4. Now, if the number of people who will click grows that 10%, but the number of advertising impressions grows at a slow 250%, the ratio of clicks to impressions drops dramatically because the denominator is growing 25X faster than the numerator. Serving more ads simply will not get the amount of e-commerce to grow significantly faster. The point of diminishing returns has been reached and passed, so incremental ad impressions are ignored and useless. The number of people who will end up buying will not increase significantly faster. And given the tough economic climate the amount of sales may actually decline before it goes up again.
5. If we generalize this back to all retail commerce, it grows at an EVEN slower pace than ecommerce. When you compare this to the dramatic increase in ad impressions and the shift from traditional channels (TV, print, radio – whose impressions and audience sizes are dwindling) to online channels (portals, news sites, social networks – whose impressions and audience sizes are skyrocketing) again the ratio of sales to available advertising drops dramatically. This is a measure of the effectiveness of advertising (sales divided by advertising spend). It was already small — it sucked — and it will get dramatically smaller soon — it’ll suck more soon.
A way to mitigate this “sucking” is to peg advertising expenditures on a success metric which is an indicator of user intent — cost per click — versus a traditional indicator of reach and frequency — ad impressions served — which from the above is NOT an indicator of consumers’ intent to purchase. This way, advertisers only pay when someone clicks. Those “someones” click when they are looking for something and are more likely to complete a purchase than those who don’t click.
“CPC banner advertising” anyone?
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