SO MO LO - The Confluence Of Social, Mobile & Local Marketing

The Democritization of Search

Google's recent change in their secretive algorithm, intended to improve quality of search results, was met with muted response from the search industry.  While some brands were negatively affected, others were not impacted at all.  The net difference seems to be negligible.

But this move points to a larger issue.  The quality of search results is deteriorating. 

Recent incidents of gaming the search ecosytem, most notably by JCPenney and Overstock.com,  amplifies this issue.  Linking from .edu domains, as Overstock demonstrated, juices your quality score due to the presumed quality of these links.  JCPenney's "black hat" tactics, which they continue to claim was the unilateral decision of their search agency, was only discovered through a very basic analysis from a third party.  How could the crown jewel of Google's algorithm be so blatantly and easily compromised?  What does all this suggest to the future of search marketing?

Search is poised to experience the largest overhaul in it's young life, moving from the minor and periodic algorithm changes that are meant to keep SEO spammers off balance.  While these simple changes have modest and temporary success, SEO experts quickly adapt, recovering from short-term penalities.  After a few weeks, they're back to new tactics that help their clients exploit the next gap in the algorithm.  The cycle continues.  Quality continues to decline while the vastness of the Internet expands.  Search needs to respond.  And it is.

Rather than the (frequent) maniacal focus on links to content to dictate relevance, new search algorithms will strongly consider how content is consumed and shared by people.  And not just by anyone.  But by people who you know, who you trust, who you interact with and who exert influence on your decisions.  This, of course, is the world of social media.  A world where more than 500 million people convene every day, spending 700 billion minutes sharing 50 billion pieces of content.  And that's just Facebook.  Add in other social portals like Twitter and LinkedIn and the audience metrics are staggering in their size and scope.

These large audiences are creating vast troves of data that will be harvested to help solve a problem that has been a shortcoming of the Internet since its' early days...understanding the context of the content?  And this problem is getting bigger and more complex as the Internet expands, posing a threat and an opportunity to the Search industry

The Web's architecture, which does a great job of expressing how a page should appear, does little to explain the meaning of a page.  This is left to humans to interpret because machines - like the vast arsenal of machines at Google's disposal - can only do so much to understand context and meaning. 

This gap in using machines to understand meaning and relevance is magically filled by other people who influence you - in the parlance of Facebook, your Social Graph.  Search engines who tap into this data will for the first time expose, share and connect pieces of data, information and knowledge in a way that's most relevant to individual needs and interests.  Powerful stuff.

What does this all mean to marketers responsible for driving traffic, increasing brand visibility, improving conversion and increasing customer lifetime value?  It's quite simple - adapt or perish. And adapt with urgency, bypassing incremental steps in favor of bold moves. Sure, the allure of fine tuning SEO has the possibility of dropping revenue to the bottom line.  And, yes, the future of social-centric SEO remains a bet at this point.  But marketers ignore this movement at their own peril.  Action is required to define your strategy and execute.

As I've written often in past blogs, the need to aggressively build an audience of fans and followers  remains an essential first step.  And fortunately, there's many techniques that are proven to build this audience at scale.  There's also a wide array of technology providers who are delivering platforms that manage all aspects of a brand's social presence. Platforms like Buddy Media and Involver have good core functionality that speeds time to market and gives multiple avenues to build and engage your social audience.

Fully embracing Open Graph (OG)...which essentially means enabling your content with Likes...is another critial step towards exposing your content to new and emerging search algorithms.  Facebook has recently given marketers a new incentive to implement OG - "Likes" behave similar to "Shares", which is a much better consumer experience and gives brands more control over the content that appears in News Feeds. 

Complementing both activities, activating OG and building likes and followers, is a sound advertising strategy using Facebook display ads and Twitter Promoted Tweets and Promoted Trends.  These platforms are relatively immature but can drive value despite their limitations.

The looming question is this - how much time do we all have before social search becomes mainstream?  Not as long as you think. 

It's a virtual certainty that Facebook will solve social search.  Too much money and opportunity for growth in Search to cede this to anyone else.  They'll either do so through building their own capabilities, or, more likely, acquire a company like Blekko who is farthest along in social search.  Twitter is also determined to pick up more of the search pie.  Rather than syndicate their "firehose" of content to third parties, they'll have their own solution to real-time search.

So change is coming to Search.  Responding to this change is not an option.  How you respond and the urgency of your response will separate winners from also-rans.

 

If a Tree Falls in the Facebook Forest

We’ve all heard the riddle – if a tree falls in the forest and nobody is around to hear it, did it make a sound?  This same principle applies to Facebook marketing.  If nobody reads your post, did your post actually happen?

Marketers are spending countless hours designing, implementing and refining their Facebook strategy.  And for good reason.  Engaging the 500+ million members of Facebook is complicated and multi-faceted.  Those who delay executing their Facebook strategy do so at their own peril.  Facebook is now the largest Internet ecosystem and is getting bigger by the day.  So where to begin?

Two pillars of any Facebook strategy are 1) creating an addressable audience that you can reach with targeted content, and 2) delivering your content to this audience.  Sounds simple enough.  Email marketers have mastered these techniques so the roadmap is clear.  Right?  Wrong.  Lots of nuances that make the Facebook platform different - very different - than anything we’ve seen in the past.  One major difference is how content is pushed and consumed by Facebook members.

It all starts with building a base of fans who “like” your brand – or encouraging likes of whatever you’re selling…whether a category of products or services, a compelling offer or individual items in your catalog.   Once this linkage is made between you and the Facebook member, the next step is pushing relevant content in a timely manner to the members News Feed.

But here’s the tricky part.  There’s no guarantee that your content will appear in the members News Feed or, if it does appear, that the member will even notice the post before being pushed off the screen by newer posts.  With 90% of Facebook activity converging on the News Feed section, understanding how to get your post to appear is the priority for marketers.

As you would expect given the massive demands in the marketplace, a new area of specialty along with a set of tools is emerging that helps marketers manage their posts, analyze post engagements and optimize posts to become more prominent.  Some call this News Feed Optimization – NFO - the next generation of SEO.  At the core of NFO is a little known algorithm Facebook uses to determine the relevance of posts called Edge Rank.

Edge Rank considers engagement with posts such as comments, likes and shares to determine relevance.  The more relevant your post, the greater the likelihood of this post appearing on your fans’ News Feed.  And as Facebook members share and comment, they push your post to their social graph and increase brand exposure.  The promise of social marketing is within your grasp.

But the Edge Rank secret sauce is not clearly understood and, more importantly, is hard for a marketer to manage.  Great posts with compelling content simply do not guarantee success.

But marketers now have a new tool from Facebook.  A product that gives marketers a more straightforward way to control whether their posts appear.  Paid placement through Promoted Stories.  Here’s how it works.  

Post content that you believe is compelling and motivates action from your fan base – whether that is a call to action to visit your site, subscribe to email campaigns, conduct a transaction, complete a survey or simply ask for feedback.  If the post is a Promoted Story, the post appears on the right rail of the news feed, effectively taking up a more permanent presence on the news feed of your fans.

Another flavor of Promoted Stories is promoting individual Likes – or in Facebook parlance, Like Stories.  Here again, being able to highlight a like will generate more awareness, resulting in far more impressions and a greater likelihood of being noticed by friends of the person who originally took the Like action. Now, instead of solely relying on the merits of the content to generate engagement, marketers can revert to good old fashioned media spend. 

So while products like Promoted Stories will help, marketers should not lose sight of the bigger picture…a large audience of fans who like whatever you’re selling must be created.  Without this audience, your posts will struggle to make much of a difference.

This post has explored a very narrow path to becoming a more effective marketer on Facebook.  Many more issues are in the mix – integrating Twitter into a Facebook-centric social strategy (see article here about our early efforts at Nextag Twitter Advertisers Lead Gen), a differentiated social shopping experience, monetizing Facebook advertising, properly implementing Connect APIs and integrating Mobile and Local are just a few of the challenges digital marketers face.

But make no mistake, developing deep Facebook expertise is crucial – probably the single most important marketing development since Google introduced AdWords.  Testing various approaches, analyzing results and quickly adapting to new and unexpected events should be the centerpiece of your strategy.

At the very least, you should avoid being the brand whose posts are compared to trees falling in an empty forest.

Right time for real time

Seems that everyone is moving towards real time.  The latest example - Google Instant - highlights how the Internet is moving rapidly towards instantaneous and relevant experiences.  Fancy algorithms are sifting through mountains of data measured in zettabytes - a stunning 1 billion terabytes - and delivering real-time results.  Being instantly relevant will become the standard by which all other brand experiences will be measured.

Online advertising technologies are moving towards real time as well.  Aggregators are enabling marketers to make decisions on an impression by impression basis.  Rapid decisions, backed by sophisticated models, give marketers the ability to fine tune their media campaigns in real-time, potentially adjusting bids for specific impressions on the fly based on decisions about the likelihood for the consumer to click.

Continued changes in media consumption explains the real-time phenomenon.  There's no denying the move towards increased consumption of digital media (even the venerable New York Times is acknowledging that the days of print are numbered).  This seismic shift in consumer behavior has resulted in an explosion of online content - and interactions with this content is producing all sorts of interesting data about consumer behaviors.

This media consumption trend has been occurring for many years, with marketers relying on brand web sites as their primary means of engaging with consumers.  But this single-channel interaction construct has come under assault in recent years.  For those brands that live entirely online, like Amazon and eBay, shifts in digital interactions using social and mobile channels has made their job of gathering and harnessing data more challenging.  What they perfected on their desktop sites - recommendations, personalization, etc. - now needs to be distributed to other places where consumers interact with their brands.  And they need to be synchronized to make sure there's consistency in how offers and recommendations are personalized.

Another complexity is the speed at which content is created, consumed and spread.  In the age of content curators, where individuals create and add to content that's already been created, conversations about brands come and go with tremendous speed in the Twitter (in excess of 50 million tweets per day) and Facebook ecosystems.  Important trends appear and subside quickly.  Many trends go undetected.

The result - content that is spreading rapidly, trends that are emerging continuously, ad impressions that are awaiting decisions, social and mobile interactions that are isolated from desktop web sites.  A quagmire of data and content.  Different systems managing different user experiences.  Different databases, each with their own view of the customer.  Content management platforms that are rigid and centralized, not keeping pace with the appetites of content curators. 

All these deficiencies are amplified for  brands who experience seasonal volumes - most notably retailers who place large bets on Holiday shoppers to deliver.  A small improvement in November and December can make up for a lackluster year.

Today's technology solutions need to weave all this data and content together - and do so with a speed and agility that real time requires.  Fans and followers on Facebook and Twitter should be an "addressable" audience, integrated into campaign management platforms.  Conversations about your brand should be constantly monitored and, when relevant trends are detected, tools should immediately spring into action to serve relevant content into the conversation. 

To take full advantage of these trends, ad impression decisions should be synched up with insights obtained from the rest of the digital ecosystem.  Are specific customer segments that receive SMS and Email offers responding at a higher rate than expected...suggesting that these same offers should be displayed on your Facebook and Twitter accounts, your ad banners and your recommendation engine on your site?  Are new conversations about a relevant trend informing how much you bid on certain keywords and/or display banners?

The opportunities with real time decisioning are significant.  Technologies that integrate campaign management tools with sophisticated analytics are maturing.  Datawarehouse systems are able to sift through increasingly large and complex datasets, often with the help of "in database" analytics and data appliances.  Centralized decision engines are able to span multiple channels, synchronizing offers and treatments to deliver integrated messaging strategies.  And response data and other behavioral data is able to be quickly incorporated into datamarts, enabling continuous modeling and scoring so that new trends can be exploited.

To be sure, integrating all these technologies is expensive and difficult.  The ROI, however, can be significant and positive within a very short period of time.  Now that Google has set the bar sufficiently high for real-time results, consumers are going to expect similar experiences from the brands they trust.  Otherwise, they'll turn their attention to brands that can deliver on the promise of real time.

Merchant Madness

The dilemma - how to help merchants of products and services sell more yet enable these same merchants to control the distribution of their promotions.  Whether flash sales, group buying, deal of the day, coupon distribution, comparison shopping, affiliate programs – solving the issue of increasing demand while giving merchants control over this demand remains a significant challenge.

 

Consider the number and types of models that are emerging.  From deal sites - Groupon, LivingSocial, The Deal Map, Yipit fit in this category - to the location-based firms like Foursquare, Gowalla and ShopKick, everyone seems to be looking to local marketing as the next killer app.  Yelp and OpenTable are making forays into location-based promotions.  Facebook will surely enter this space with a bang – rumored to be as soon as tomorrow.  Google has unveiled local merchant tools as well.  All of the above will continue to improve their platforms.

 

And merchants of all types and sizes are eager to use these new tools – whether services like restaurants, auto repair and health/beauty or products like electronics, apparel and lawn and garden.  And all sizes of merchants are using these platforms too, including big-box retailers like Best Buy and apparel manufacturers like American Eagle Outfitters.  Enabled by mobile and social, the “last mile” connection between online and offline retailing is nearing completion.  Merchants are salivating.  Site traffic is growing.  Valuations are going higher.  Venture capitalists are circling, waiting for consolidation that will create wealth opportunities.  Not quite irrational exuberance.  But the buzz is deafening.

 

Yet there remains a vexing problem.   How to give merchants control over these new promotional channels when their primary focus is on store operations.  Only the biggest retailers can devote proper energy and resources to managing all three legs of the stool - demand, store experience and supply.  Even these retailers are struggling with the proliferation of demand-generating opportunities.  Which ones to use?  How to use?  How to fit into their own marketing and merchandising strategy?

 

Recent stories about merchants being overwhelmed by discount-seeking customers flooding their store, squeezing out regular customers or otherwise disrupting service, shine a bright light on the conundrum.  Yet, paradoxically, merchants seem to also love the new customers.  They just don’t love that many new customers.

 

So while those who cater to local merchants take pride in their ability to turn a customer trickle into a raging river, they’re missing the larger point.  Becoming a marketing partner for merchants is where the true value lies.

 

Merchants want customers.  They also want loyal customers.  They know that promotions typically generate customers.  And they have money set aside to promote on a local level.  Historically, though, that money was spent on newspaper classified ads, inserts in Sunday newspapers and local mailings.  Predictable responses to this distribution meant predictable demand.  An occasional great deal would get a slightly larger response, but still within a comfortable range that merchants would have no problem meeting the needs of these new customers.

 

This model is, of course, changing in pretty dramatic ways.  Good deals are instantly found and indexed by the major search engines.  The biggest sites like Groupon quickly notify their subscriber base.  And instantly, the best deals spread quickly using mobile connections and social networking.  Even loyal customers - who wouldn’t need discounts - are finding these deals.  What was once predictable is now out of control. 

 

Overwhelmed merchants are forced to make some tough choices – turn away new customers who are clogging the system or rapidly scale operations to accommodate new volume.  Both are undesirable.  Scaling operations is impractical.  Even large retailers complain that uncontrolled discounting is hurting their margins and negatively impacting customer loyalty.  They’d rather tailor offers to segments of customers based on their own customer marketing strategy.

 

The response from all these new online sources of promotional content is muted.  A few are trying to bound the offers by volume while others are restricting coupon usage and redemption.  But nobody has yet to create a marketing portal for merchants.

 

Key features of this portal would enable merchants to tailor their promotions.  For more sophisticated merchants, this means weaving their own merchandising calendar and customer segmentation strategy into promotional programs.  Merchant portals will include features to micro-target, select customer segments, and define offer and treatment strategies (even multi-stage offers).  These systems will closely monitor budgets, drawing these budgets down when offers are redeemed.  Creative treatment will be more closely managed so as to ensure brand consistency.  Reports will be available on-demand, giving merchants a lens into their program’s performance whenever they choose.  And these reports will automatically note exceptions to key metrics, quickly calling out techniques to optimize program performance.  The best tools will automatically optimize given agreed-upon parameters, informed by sophisticated embedded analytics that constantly scan data for opportunities.

 

Merchants know the days of newspaper inserts are numbered.  Yet they are hesitant to fully embrace digital distribution.  This reluctance is offset by the undeniable popularity of online promotions.  They’re feeling enormous pressure to move quickly…and when they do, it’s often with unintended consequences and undesirable trade-offs.

 

Those providers of online promotional tools need to guide merchants into this new world, providing tools to help them manage and monitor their programs.  The ones who give merchants what they’re looking for will reap the rewards of a healthy supply and demand ecosystem. 

 

These innovators will be the points of consolidation in the industry.  They will create value and be rewarded for this value creation.  Those who don’t respond to merchant needs, or who are too focused on the demand side of the equation, will alienate merchants and will have a less compelling value proposition.  They will see their business deteriorate as both supply and demand will migrate to a better user experience.

The Network Effect

For the past decade, since Google mastered the search algorithm and created the AdSense and AdWords profit machines, brands have been investing countless resources to optimize their Search Engine Marketing (SEM) practices.  Pursuing Search Engine Optimization (SEO) – often referred to as Natural Search – offered opportunities to drive highly efficient traffic.  The vast majority of online marketing was – and continues to be – focused on SEM and SEO, with Google dominating the conversation.

 

This Google-centric online marketing strategy is changing in dramatic ways.  The change is giving hope to brands that are looking for ways to diversify their traffic sources and drive better efficiency in their marketing spend.  It’s the network effect that’s crashing the Google party.

 

No longer are consumers defaulting to a search box to answer their questions, particularly when it comes to shopping.  Rather, they’re developing networks that are always accessible and always connected to one other.  And some stats bear this trend out with the network enablers now accounting for an increasing share of the time spent on the Web.  Facebook’s 500 million users are now accounting for 17% of time spent on the Web.  This #1 ranking is followed by Google-owned YouTube, which accounts for 10% of time spent.  Add sites like Twitter and LinkedIn and you find that time spent on the Web will soon be dominated by these network enablers.

 

In the device world, the other network enabler is the rapid ascent of mobile.  Apple’s success with iPhone 4 and the activation of 160,000 Android devices every day bear out the importance of mobile in the network ecosystem.

 

So now when I’m walking down the street and notice a display for an HDTV, I’m just as likely to scan the bar code, review deals from online and offline merchants, check out user reviews and product demos, fire off a post to my various friend networks to see if they have tips, immediately view Twitter conversations about the product in question, instantly download a coupon to my smart phone and make a purchase decision.  All of this happens within moments of me seeing the display.  And all of this potentially bypasses a traditional Google search box.

 

Even if I do start my shopping experience using mobile search, the differences in the user experience between mobile and desktop is upsetting the status quo.  Mobile search results on smaller formats means different copy treatments and different contribution from SEO…you just can’t fit as many results on the screen that’s 20% the size of typical desktop display.  What’s more, the click off the search results are hitting landing pages that are difficult to optimize for the mobile platform.  Even if these pages are mobile-optimized, brands are realizing that there are limitations in the user experience that impact their conversion rates and, ultimately, their efficiencies from mobile search.  It seems that only Amazon, with $1 billion in sales coming from mobile, has effectively navigated the mobile shopping world.  This is largely due to their superb integration of one-click and how they have wrapped other cutting-edge capabilities into the mobile experience. 

 

But the shift away from traditional search isn't explained by social and mobile alone.  Display advertising is also carving into search dominance as networks of consumer profiles and behavior data are linked with targeted advertising to drive efficiencies.   Layer on top of this the hot market for real-time bidding and other demand-side aggregation technologies and display advertising has rediscovered its mojo.

 

Even in the display advertising space, Facebook is creating a machine of their own.  Their built-in network of friend relationships, which is accounting for their #1 ranking in time spent, also translates into 16% share of the roughly $9 billion market.  Google’s share is well under 3%.

 

Am I suggesting the demise of Google as a major source of  online traffic?  Of course not.  But I am suggesting that brands wake up to these changes and move quickly.  Brands need to build networks of interconnected audiences, each interacting with networks of content that deliver unique and relevant user experiences.  Marketers need to aggressively move into the world of multi-channel online marketing, placing particular emphasis on mobile and social so that the end-to-end user experience - between desktop and mobile device - is optimized.

 

While not an easy transition to make, there are some concrete actions that will give marketers the platform necessary to exploit this network effect.

 

Starting with Facebook, brands need a strategy that distributes their brand experience across Facebook and increases reach among their 500 million members.  Activating the Facebook API on your site for login and “Like” purposes, developing a feature-rich Facebook app and developing a strategy to increase your fan base are the three legs of the Facebook stool.   Monitoring social conversations and sentiment about your brand across Facebook, Twitter and YouTube, and delivering relevant messages into these conversations, is another way to improve the network effect.

 

On the mobile experience front, brands need to develop their mobile platform with a keen eye towards the entire user experience.  Mobile optimized web sites are mandatory.  Smart phone apps should be an important part of your arsenal with two important caveats…unique functionality using smart phone apps and a distribution strategy that gets your app into shoppers’ hands.  This second part is often overlooked – but must be given proper attention if you expect mobile experiences to gain traction.  With the Apple AppStore now boasting over 100,000 apps, getting your app noticed in this noise is increasingly difficult..

 

The final step in this network strategy is to build a data, analytics and messaging management platform, supporting each of your digital channels.  Harnessing your customer interactions across these channels and using this data to drive relevant messaging will ensure your network becomes a vibrant and valuable asset.  New tools for multi-channel campaign management, embedded analytics, real-time decisioning and ultra-powerful data warehouse systems using the latest data appliance technology make all this possible.  But it requires investments and commitment at the most senior levels of the company.

 

The network effect is upon us.  That is undeniable.  Marketers need to embrace the change.  Otherwise, consumers will seek out brands that are consistent with how they shop and buy products and services.

Smart data for smart marketers. It’s not just semantics.

Much has been made about how marketers can be smarter, more targeted and more relevant in their online marketing efforts.  True enough – the volume and precision of data has given marketers vast opportunities to collect and manage data across all web interactions – from web sites, email campaigns, SMS and MMS campaigns, Mobile Web, smart phone apps and display banners.  Transaction data integrated with behavioral data is rapidly turning into a strategic asset.  Delivering ultra-targeted messages across these interactions, all coordinated and synchronized, monetizes the data asset in new and exciting ways.

 

But just when marketers think they’ve got data-driven marketing figured out, another important trend threatens to make today’s sophisticated data management and analysis techniques look antiquated.  And for good reason.  It turns out that the context in which the data exists – the time, the place, the circumstances, the macro and micro-events, the geographic tags, the relationship between each of these pieces of the context - is about to redefine data-driven marketing. 

 

Welcome to the Semantic Web.  A Web that seems to anticipate your needs, responds in real time to who you are and what you’re doing, adapts to changing conditions and guides you effortlessly on your journey to find the right product to meet your every need. 

 

Consider the following example to illustrate the potential of the Semantic Web.  The recent Google TV announcement highlighted several of their partners, including Sony showing off a slick new Blue-ray High Definition TV.  At roughly the same time, a comparison shopping site notices a spike in consumer traffic for “Sony High Definition TV” search terms, clearly an indication of the halo effect from the announcement.  Under normal circumstances, marketers would capture this search data as an indication of product interest.  Yesterday’s smart marketers would use this data to retarget a display ad on an ad network for High Def TV offers and promotions.  What once seem advanced is now the price of entry in the Semantic Web.

 

Today’s smart marketer, one who understands the power of contextual data, would capture the other contextual data (i.e. the Google TV announcement) around this initial search behavior.  The smart marketer would use this contextual data to alter the creative and copy.  So rather than a banner with copy that announces “Cool Sony HDTV’s available with free shipping”, the smart marketer who understands the Semantic Web would display a banner that highlights personalized emotional and rational benefits.  This smart ad would probably read “Sony.  The leader in bringing the Internet to high-definition TV.”  Subtle, effective, personalized, relevant…all because the Semantic Web gave the marketer more context to the search term.

 

This new data world places additional burden on technology solutions.  Vendors with a proven ability to gather and organize data in real-time will be in high demand.  Vendors who provide real-time decisioning and campaign management systems that can act on this data as soon as it becomes available will be the winners in the Semantic Web.  But perhaps the biggest need from technology providers is in the area of data transformation, associating context with data quickly, intelligently and efficiently.

 

This will be done through systems that extract data and the context of the data in one swift motion, storing the entire data set and quickly associating other data to the individual pieces of the context.  Data mining tools that discover these associations will be central to this process, and those mining tools that learn and adapt to changing conditions will be even more essential.

 

The need for marketers and their technology partners to solve data challenges is higher than ever.  For those marketers who have yet to deploy a data strategy that manages the data that exists across their ecosystem, this strategy needs to be developed and implemented with urgency.  You’re about to fall further behind.  For those smart marketers who have a solid data strategy and have already integrated behavioral and transaction data from all touchpoints into a single view of the customer, and who use this data to drive messaging decisions across channels, you’re got a solid foundation upon which to build. 

 

The Semantic Web is the new frontier for data-driven marketing.

Brand Management in the Online World

The online advertising world is making a comeback - in a big way.  Recent signs point to the resurgence of online marketing, with the IAB reporting healthy sequential gains in online ad spending.  Not coincidentally, the explosion and maturation of technologies and platforms to manage and serve ultra-targeted display ads is giving marketers plenty of ways to innovate.  A brand impression that was once thought to solely lead to aided and unaided awareness is now closer than ever to generating a response and generating sales.

 

But the question remains.  Can brands be built and managed online, even without an offline complement?  That’s a big question marketers are facing today as traditional media continues to fragment and subscriptions plummet for magazines and newspapers.  The reality for marketers is this - if you don’t have adequate resources for a big-time TV campaign complete with a production budget that delivers memorable creative, it’s time to look seriously at what you can do by shifting the majority of your spend online.

 

Today, marketers can turn to a whole host of solution providers to reach their target audience in ways that have finally matured and reached scale.  Looking to find an audience that resembles your best customer?  Done.  How about those who search for keywords that match your brand, product assortment or other keywords that perform well?  This too is possible at scale.

 

You can even use ad serving platforms to connect the proper benefits of your brand with unique audiences, displaying the brand benefit that resonates most with individual consumers.  Imagine highlighting a certain brand benefit to one consumer one moment and another brand benefit to a separate consumer the next moment – and these various creative treatments are displayed in the same ad unit that was purchased on the sports section of nytimes.com.  Gone are the days when targeting was accomplished by content relevancy…now we’re buying people, not content. 

 

An added benefit is we’re now able to vary spend so that bidding is based on the potential lifetime value of the consumer.  We may even choose to suppress the display of the ad since a consumer is deemed to be undesirable, despite the fact that the media property where we’ve purchased inventory would suggest otherwise.  This redefines Return on Advertising Spend (ROAS) and delivers yields that were once elusive.

 

In addition to the dramatic improvements in display advertising, we have another platform that’s notable to brand marketers - social media.  Finding and cultivating relationships with your best customers enables marketers to create brand advocates.  With a ready-made platform of nearly 500 million members on Facebook and millions of Twitter conversations occurring daily, these brand advocates can do the hard work for you and spread your brand story to their social graph. Finding and motivating 1,000 of your best customers to tell their friends delivers at least 100,000 impressions that are not only targeted – they’re the highest quality impressions on the planet because the message is endorsed by someone they know and trust.

 

The role of public relations in brand building and management is also being redefined by the Internet.  Monitoring social conversations, finding those influencers in your industry and encouraging these influencers to carry your brand message is at the heart of social media.  Injecting your brand in relevant conversations (through techniques like Promoted Tweets) is yet another effective way to target your message to groups.

 

The last platform that is shaping brand building using digital media is the runaway growth of the mobile channel.  Location aware mobile devices close the last mile, enabling merchants, retailers, manufacturers and brands of all stripes to serve brand messages that are both targeted and laden with response triggers.  Mobile marketing is where the fusion of brand and direct response is happening.

 

Which speaks to the biggest benefit of online brand building.  It’s infinitely measurable.  John Wanamaker’s quote about not knowing which half of advertising was ineffective is a thing of the past.  Not only do we know which dollar is ineffective, we use this knowledge to change the next dollar spent so that it becomes more effective.

 

While I realize some brands cannot (and should not) immediately suspend their offline brand building activities, they should – they must – develop online marketing expertise.  They need to integrate these capabilities with their existing strategies.  They need to experiment, letting the data dictate their actions.  They need to double down on the winners.

 

Only then will we know with any certainty the extent to which a brand can be managed through online channels.

Hyper Local Marketing – Don’t Forget The Merchant

It’s hard to overlook the buzz surrounding local marketing.  Recent attention placed on “flash deals”, “group buying”, “social commerce” and similar descriptors scratch the surface on the enormous opportunity that’s finally been cracked after many failed attempts from traditional players.

 

The demise of Yellow Pages and local advertising using traditional media is quickly being replaced by the big guys dialing up their local merchant services along with upstarts who focus exclusively on local marketing.  Notably, Google and Facebook are unveiling new offerings designed to help merchants manage their online presence, create awareness and drive traffic to their store.  Meanwhile, established online local content aggregators like Yelp are taking note of new services like Gowalla and Foursquare who are masters at social networking.  Then you have the recent emergence of local group buying platforms, led by Groupon and their eye-popping $1.3B valuation, who offer yet another way for consumers and local merchants to connect.

 

All of these players, and many others involved in local marketing, are exploiting the GPS capabilities of  smart phones and their elegant connection with social platforms to enable their services and spread the word, acting like an accelerant.  Hyper local is actually becoming a term used to describe the potential of this booming category.

 

Nobody is immune from the influence of local marketing…service and product merchants at the local, regional and national level are looking to super charge their marketing efforts with a local touch.  Any why not?  Location location location is not limited to describing the virtues of residential real estate.  It’s the last mile between brand awareness and ringing the cash register.

 

But what we’re seeing now is the tip of the iceberg.  It’s not unrealistic to expect a massive local ecosystem in which many service providers are interconnected.  You’ll have product inventory enabled by real-time platforms like Milo and Krillion allowing real-time shopping via mobile devices and comparison shopping engines that drive traffic to retailers.  You’ll begin to see local efforts down to the neighborhood, a particularly useful need in densely populated urban areas.  You’ll see data sharing between services that are more complementary – or more likely consolidation between firms like Foursquare and Groupon, providing their customers with an enhanced user experience - a complete closed loop between generating foot traffic, checking-in, and sharing experiences with your social graph complete with pictures of the meal you’re about to enjoy courtesy of a $30 Groupon.  And you’ll see all these services follow you on your travels for work or play.  Local will be defined not by where you live but by where you are at that moment.

 

With all this buzz, there’s bound to be bumps along the way - and we’re beginning to  see evidence of a few problems.

 

We all know that merchants have perishable inventory.   Whether defined by few products in a particular SKU, the number of tables and the configuration of these tables, physical space, or any number of limitations that inhibit their ability to easily digest spikes in demand.  On the other hand, they’re looking for innovative ways to drive foot traffic to their store so they can turn their inventory over, cover fixed expenses quickly and make good money managing their variable expenses.

 

These seemingly opposing forces are constantly being managed by merchants.  A restaurateur worth their salt doesn’t need more people showing up on Saturday night with coupon for 30% off an entrée – but that same discount on a Wednesday at 5:00 is a different story.  A mani/pedi shop owner could do without Saturday afternoon discount customers who crowd out the bridal party getting ready for the wedding.  Getting these customers to come for their manicure on Tuesday’s at noon, however, does wonders for their bottom line.

 

With the explosion of local marketing options, merchants are presented with multiple ways to manage this vexing business problem – balancing limited supply with increases in demand that they can reasonably and profitably fulfill.  The options are increasing…the differences are blurring - Which decal is on the front of the door?  Which platform do I use to distribute offers and other marketing messages?  If I go with multiple platforms at the same time, what can I expect and how do I prepare for spikes in demand?  If I go with a single platform, will I get what I expect or will it be a waste of time?  What’s my backup plan if the offer is a hit, goes viral and overwhelms my staff?

 

There are no easy answers here.  And these are important questions to confront for anyone involved in local marketing efforts.  Sophisticated merchant management capabilities are one pathway to positive customer experiences, long term merchant relationships and increased merchant participation.  Tools that allow merchants to become an integral part of the process of creating, executing, monitoring and analyzing marketing programs will become essential.  Of course, some merchants don’t care to get involved in the details.  That’s OK…servicing these merchants with account teams while giving other merchants self-service capabilities will be a competitive weapon in the quest for market share.

 

Providers of platforms and technologies for local marketing should quickly realize that the merchant holds significant power in the local marketing ecosystem.  Care should be taken when developing brand value propositions and building marketing strategies that overly bias consumers and demand.  Because without managing supply, consumer experiences will suffer and defections will increase.

 

Supply meeting demand is the essence of a vibrant marketplace.  Massive opportunities await those companies who get this and make it part of their DNA.

Beacons Redux? Not Even Close.

As you may recall back in November, 2007, Facebook suffered a humiliating defeat of their Beacon product that promised (at the time) to bring true personalization to the Internet.  The anger of privacy advocates and a botched rollout spelled the demise of Beacon.  Good riddance was my reaction.

 

Now Facebook has come out forcefully with their snappy new Beacon alternative called Open Graph.  This time, they’re playing in a different league that comes with nearly 500 million users compared to a paltry 50 million in the Beacon days.  It also comes at a time when consumers and marketers have realized that social networking is a powerful tool to find and connect with friends and share content while marketers are able to engage with a targeted audience and drive brand strategies. 

 

We’ve tasted the promise of social networking to support distributed brand experiences.  Now we look to the definitive leader in this space to take us to the next phase.  Hype aside, it looks like Facebook has actually gotten it right this time.

 

Cynics would argue that Open Graph is taking the distributed brand experience model in the opposite direction.   Compiling likes and interests on Facebook so as to deliver hyper targeted advertising, fueling their ambitions to achieve higher valuations that Google, seems more like consolidation and power grabbing.  They’d also argue that there’s really nothing Open about Open Graph given it’s proprietary to Facebook.

 

They’d be right on both counts.  While building a treasure trove of data that Facebook uses to their advantage is clearly an outcome of Open Graph, the important point for marketers is how they’ll get there from here.  Enabling brands to drop “like” buttons throughout their web properties and their digital ecosystems will create a two-way stream of user interaction that is unparalleled…and highly valuable for marketers.

 

The first benefit is for those brands that are struggling to carve into the 500 million Facebook member base and create a meaningful social networking presence.  Open Graph provides an instant path to achieve higher awareness with the Facebook audience, increase your fan base and ultimately have a vibrant new engagement channel.  Brands will also quickly benefit from all other "like" votes, delivering targeted site merchandising opportunities for new site visitors that would take weeks - if ever - to build.

 

Other benefits include more efficient acquisition marketing.  "Likes" are posted on walls and are seen by the site visitors social graph, many of whom are either unfamiliar with your brand or have never shopped/purchased from you before. Targeting banners within Facebook using Engagement Ads is icing on the cake, and will challenge behavioral targeting firms to maintain their current slice of ad budgets.

 

Finally, Open Graph can be deployed in the shopping cart, surrounding your purchase path with streams from people with similar product interests.  This content can only reinforce purchase decisions, reduce cart abandonment rates and increase conversions.

 

The ultimate question is whether now is the time to dive head first into social networking.  A brand with a small fan base and little experience with social networking may find this approach too abrupt.  They’d argue for a slower path to getting their feet wet before placing 'like' buttons indiscriminately throughout their digital ecosystem.  Other brands that have seen the power of social networking will move quickly to embrace Open Graph.

 

For those who want to go slow, an effective approach would be to go deep with part of your ecosystem or part of your content/product catalog.  Put the pilot together with measurable objectives and launch in market as soon as possible.  Measure results and expand aggressively…presuming the results of the pilot are positive.

 

One final note.  As multi channel marketers continue to pour resources into digital channels, care should be taken to integrate Open Graph as yet another part of your digital ecosystem.  Consistent brand experiences that are coordinated and targeted should be a fundamental outcome of any Open Graph deployment strategy.

The Futile Debate Between Email and Social

Much has been made about the demise of email and the meteoric rise of social networks and mobile as the preferred method of communication.  To be sure, the facts point to an unmistakable trend – both the number of global email users and the global minutes spent per month on email has been surpassed by social networking. 

 

But when inspected closely, these numbers conceal the value of either channel and, more importantly, the combined value of both channels.

 

Consider the challenges a Chief Marketing Officer is facing today as they seek to bolster their brand, drive awareness, increase marketing productivity and drive incremental revenue – all while demonstrating a positive ROI.  They’re looking at continued media fragmentation in traditional media and attempting to absorb the dizzying pace of changes in digital media.  They’ve begun to build a customer asset that shows promise and are investing in technologies to manage customer interactions.  In short, they’re refining their channel strategy to expand into customer marketing and emerging media.   Pilots and other experiments are prevalent as marketers get a handle on how best to use social and mobile.

 

What marketers are learning is that no single channel will solve their challenges. That’s where the discussion of social v. email becomes unproductive.  The role of either channel is unique and “personal” depending on the individual and what they're trying to do.

 

The key difference between email and social is the promise and opportunity to use social in ways we’re just beginning to understand and exploit.  A promotional message sent to your customer base via email may have greater impact as that same promotional message sent to your Twitter followers and Facebook fans.  The difference in productivity is often how well you know your audience, how well you target and how well you imbue this message with viral qualities.

 

But today, the reality for most marketers is social and mobile are not yet at scale.  Email databases, having been built over the past several years, are many times the size of SMS databases, Facebook fans or Twitter followers.  This will begin to change as brands master the art of building fans and followers – but for now, reaching a large audience is often the domain of email.

 

The biggest issue this whole debate highlights for marketers is how multiple channels are used by consumers today.  This trend will only intensify as marketers harness the power of social and mobile to manage their distributed brand experiences.  Marketers must listen to your customers and allow them to interact with your brand in a manner that is relevant to the customer.  Suggesting that all consumers – or even the majority of consumers – prefer one channel over another is too simplistic. 

 

They use all available channels interchangeably depending on their needs at that time.  They’ll receive an email with a particular offer followed by an SMS message two days later with a more enticing offer.  They’ll respond to the SMS message and shop on a mobile optimized web site that serves up a product demonstration video.  They’ll save their cart and move to their desktop two days later to complete the purchase.  Then they’ll send a Tweet about the deal they got that is linked to their Facebook account.

 

So rather than argue over the preference of email v social, we should spend our energy understanding the unique role of each channel in our channel strategy.  We should realize that email is good for some people serving some of their needs.  We should understand that social is better for other people as they interact with brands.  Making resource decisions based on aggregate data should be avoided.  Rather, drive your channel decisions based on your customer, their needs and their preferences.  The results will be dramatic.