Web 2.0 and Marketing Strategy

Addressing the Association of National Advertisers in 2004, Jim Stengel, chief marketing officer of Procter & Gamble, threw down the gauntlet. As the man controlling the world’s largest advertising budget, his words certainly instilled fear in the minds of the advertising agency executives in the audience. For the brand managers and marketing executives attending that day, an expression immediately jumped to mind: “The emperor has no clothes.” However, as Stengel continued to speak his prescient words, many in the audience began to see that the shattering of the traditional marketing model was not to be feared or ridiculed. No, in fact, it represented an amazing opportunity.

As Stengel predicted, the traditional marketing model that relies heavily on investments in mass media vehicles such as TV, radio and print advertising is cracking and faltering for many marketers. Customer media usage patterns have changed dramatically, thanks to time- and place-shifting technologies such as digital video recorders (DVRs) and iPods, which allow us to record favorite programs for later viewing, listen to news, view entertainment on the go and skip over advertising messages completely. Customers today are more in control of their media experiences than ever, and as such, they have become far more difficult to reach and influence through traditional mass media vehicles. With this proliferation of media choices, advertisers have far more clutter and “noise” to break through; indeed, some research suggests that customers are presented, on average, with more than 5,000 marketing images and messages per day. In addition, more than 80 percent of U.S. adults admit that they simultaneously listen to
the radio, read a newspaper or surf the Internet while watching TV. Thanks to this customer multitasking behavior, even if marketers succeed in reaching their target audience, they may not be able to get their attention.

For most marketers, the introduction of the World Wide Web represented a breakthrough invention for reaching customers directly with brand messages, activating purchase intent and conducting commerce electronically. During the early days on the Information Superhighway, marketers supplemented their traditional broadcast communication strategies with “narrowcast” tactics in order to simulate a one-to-one relationship between company and customer. Collectively, the marketing community crossed its fingers and hoped the Web might patch the cracks in its traditional marketing model.

As the Web has evolved, however, customers have stepped up their level of control. With this shift to so-called Web 2.0, the traditional marketing model is again under fire, and the implications for marketers and how they formulate strategy are even more significant.

According to a 2007 comScore Media Metrix report, a shocking 100 million people visit social networking site MySpace each month – a user base that exceeds the population of Mexico. Yet these users do not actually think of their visit to MySpace as "a Web 2.0 experience." Nor do MySpace and other leading social networking sites such as Facebook, YouTube and Wikipedia promote their offerings as Web 2.0. This widely adopted term is simply a marketing-inspired buzzword that helps define an evolutionary shift toward social and participatory Web experiences.

SO WHAT MAKES WEB 2.0 NEW AND DISTINCT FROM ITS PREDECESSOR, WEB 1.0?

When you think back to the first generation of websites and Internet business models, you’ll probably recall an abundance of shopping portals, flat "brochure" sites and daily news destinations. Few of these early sites were considered particularly social or highly interactive. The Web 1.0 user experience (see Figure 1) was marked by passive browsing, navigating through hierarchies of text pages, clicking through sites to find items of interest and managing a "shopping cart." In many ways, Web 1.0 looked like any other media channel – just another way to reach customers with your brand messaging, marketing campaigns, promotional offers and, most importantly, to extend your order management systems. As such, marketers applied tried-and-true marketing tactics and propagated traditional metaphors for conducting business. And with that, we witnessed the birth of banner ads, online catalogs, interactive auctions, shopping carts and checkout pages.

The focus of strategic Web 1.0 marketing efforts rapidly moved from commercialization to personalization, as dot-com start-ups like Amazon.com stormed into the market and revealed the potential marketing power of the Web. By monitoring purchase patterns and tracking the behaviors of its customers online, Amazon could personalize its store for each and every customer – offering up products that would appeal specifically to that particular customer. This was a key distinction in the evolving relationship between marketers and their customers on the Web. No longer did it have to follow the traditional one-to-many communication approach. Through the Web, marketers could simulate a one-to-one communication experience with their customers. "Broadcast" messages over traditional media could take on a "narrowcast" characteristic by leveraging Web technologies.

However, as we evolve to Web 2.0, strategic marketers recognize that the Web is not a broadcast medium. This is an extremely important distinction. Unlike traditional broadcast media, Web 2.0 is not characterized by users who are connected to media outlets and commercial businesses that practice one-to-many content distribution. Rather, with Web 2.0, users are connected across the Web to other users within a space that they control and use for their own content creation and social interaction. This peer-to-peer dynamic underscores everything that customers do online today. From a strategic marketing perspective, marketers must shift their focus away from personalization and move in the direction of socialization.

Napster, the online music-sharing site, was one of the earliest companies to recognize the power of "peercasting." By allowing its customers to freely upload and download music from the site, Napster fostered a powerful community that produced its own music reviews, created a dynamic peer-to-peer social environment and represented a very attractive target audience for advertisers. Because Napster failed to enforce copyright protection amongst its members, however, the music industry filed suit and successfully shut down the business. Nonetheless, the socialization of the online music industry continues to accelerate with the growth of music-sharing sites such as iTunes and Morpheus, which do protect the copyrights of the music publisher even while empowering users to download files.

WHERE IS WEB 2.0 HEADED, AND WHAT ARE THE IMPLICATIONS FOR MARKETERS?

In many ways, the most powerful Web 2.0 marketers are the customers themselves. With their online voices and active participation in blogs and social networking sites, they have the ability to shape how your brand is perceived by a vast number of people, to influence the purchase intent of other customers in their networks and to promote or disparage your products and services. By the same token, this peer-topeer dynamic also represents a tremendous opportunity for marketers if they are willing to acknowledge that they are no longer the only ones controlling the message.

In fact, the real opportunity for marketers is to become part of the dialogue. Many marketers forget sometimes that they are also customers and can insert themselves into the social networks relevant to their brands. Web 2.0 represents a rich storehouse of customer intelligence data that can be mined, analyzed, shaped and acted upon. Strategic marketers will recognize that it is better to be actively engaged and helping to shape the brand dialogue than to get blindsided.

At Sun Microsystems, for example, employees are encouraged to author their own blogs and directly engage customer questions and complaints. Even Sun’s CEO, Jonathan Schwartz, openly comments on industry rumors, engages competitors, debates the pros and cons of Sun’s products and shares ideas related to future product developments. Sun sits at the center of its many-to-many Web 2.0 dialogue, "multicasting" across audiences and channels, socializing its ideas and giving its customers a chance to weigh in on Sun product development.

Needless to say, there are significant implications for marketers as Web 2.0 continues to evolve (see Figure 2). Here are a few considerations:

  • Relevancy – In a social network, brand messaging must be put in the context of the customer dialogue. Blatantly promotional messages that highlight traditional feature-benefit trade-offs will not be sufficient to break through the clutter of today’s media environment. Furthermore, segmentation and targeting strategies are now more important than ever, as customers look to their peers and other members of their social affinity groups as the authoritative source for messages and advice. Being able to target "influentials" within affinity groups will become one of the most important jobs for marketers.
  • e-Advocacy – Where Web 1.0 was marked by the advent of e-commerce, Web 2.0 will be remembered for the advent of e-advocacy. With customers largely in control of the media that is Web 2.0, marketers must find ways to convert them into advocates. Marketers have long recognized that happy customers do not necessarily make loyal customers. And, in the same way, loyal customers are not necessarily evangelists or promoters of your brand. With Web 2.0, marketers must learn how to identify, grow and encourage those customers who are outspoken and willing to actively promote your brand to peers across their affinity groups. Most importantly, e-advocacy must be authentic and genuine. Paid advocates will be quickly discovered and scorned in the Web 2.0 world, damaging not only their reputation but also the reputation of your brands.
  • User-Generated Content – "Customer" and "advertiser" will be synonymous in the Web 2.0 future and beyond. Marketers need to develop opportunities for customers to participate in shaping communications strategies and marketing executions. Furthermore, marketers should consider ways to extend their brand architecture and marketing plans to their customer base by providing motivated customers with the tools and capabilities they need to generate content that supports the company’s brand strategy.
  • Marketing Mix – With customers doubling as advertising executives and marketers doubling as customers, the company will need to constantly revisit and reweigh the optimal mix of company-driven versus customer-driven marketing communications. This changing balance will grow more important than the actual array of media where advertising budgets are invested (e.g., TV vs. radio vs. Web). Regardless of media, the messaging must be monitored to ensure the company can follow through on promises being made and multicast across Web 2.0. At the same time, the executive team needs to ensure that marketing investments will yield the desired business results.
  • Actionable Intelligence – There will be more data available to marketers than ever before for making strategic marketing decisions. The challenge will be to extract true customer and market insights from a deep pool of interesting facts. As Web 2.0 enables marketers to track and monitor customer behaviors with greater sophistication, the business must develop strategies for responding rapidly to changing market dynamics and evolving customer needs and wants. With “actionable insight” at their fingertips, marketers will be able to rapidly infiltrate social networks, fine-tune campaign communications, optimize offers, recommend product changes and realign assets to activate customer purchase intent.

While there may be some who mourn the demise of the traditional marketing model and long for the days of monitoring gross rating points (for measuring TV audiences), strategic marketers look to Web 2.0 and see nothing but opportunity. We have a fascinating medium literally at our fingertips every day for engaging prospects, selling products and services, understanding competitors and customers, enlisting advocates to promote our brands, measuring the effectiveness of our efforts and learning how to refine our marketing strategies for maximum impact.

Can You Connect With The Ad-Averse Segment Of Your Audience?

Your advertising is invisible to a substantial segment of your audience. Intuitively, you know they’re tuning out, but you need more than intuition to re-establish connections. The solution for reaching an audience that ignores or pays little attention to your advertising is really twofold. First, you need to gain a better understanding of your audience; and second, you must use technology that can determine how best to reach them – where and when they’re most open to your message.

UNDERSTANDING THE AUDIENCE

A 2007 study published by Microsoft in conjunction with MillwardBrown-Greenfield revealed a number of important insights that may shed some light on the way your audience receives – or, more accurately, doesn’t receive – your message. The survey found that 17-to-35-year-olds represented the most advertising-averse group of consumers. Although this age-group has always been among the most difficult to reach, the survey revealed some interesting insights into the perspective of the segment Microsoft refers to as the "ad-averse":

  • Eleven percent of them agree with the statement, "I generally do what I can to avoid advertising."
  • Thirty-three percent of them agree with the statement, "I never really pay attention to advertising."
  • Twenty-seven percent of them agree with the statement, "Advertising is not relevant to me."

MIND-SETS OF THE AD-AVERSE

Participants in the Ad-Averse survey tended to be very active, filling their time with socializing, shopping, music, outdoor pursuits and other personal passions rather than spending time online. Members of this group are likely to be averse to advertising because they tend to be more discriminating about how they spend their free time. Ad-adverse consumers define themselves by what they do outside of work or school, maintaining a large network of friends and "experts" to help them navigate their worlds. Generally, members of this group trust their own opinions first and foremost, and pay less attention to generic "buzz" or hype amongst their peers.

CHANNEL INTERACTION AND BEHAVIOR

In today’s media-driven world, people can choose among hundreds of platforms and content sources. Ad-averse targets tend toward technology-driven choices. When asked whether they’d rather give up their computer or television in their individual free time, respondents almost always chose to give up their televisions and keep their computers.

The portability afforded by laptops and wireless connectivity embeds the online experience much more squarely in the leisure context. Of the ad-averse 17-to-35-year-olds surveyed, 12 percent watch less than one hour of TV a week compared to 3 percent of non-avoiders. This may be due to the subjects’ age, since younger respondents are generally more technology-savvy and active. In general, the ad-averse preferred the control their computer experience provided to the more passive television experience. And they were even less likely to employ ad-avoiding measures such as TiVo, believing that "time shifting" might just encourage them to watch more television.

Similarly, ad-averse TV watchers appear to make that medium occupy more of the companionship territory that radio once dominated – either as a purely visual (muted) or audio backdrop to other activities. These respondents "tune" in and out if a particular news item or segment catches their attention. Increasing levels of multitasking may also make commercial breaks more welcome among this group, since it gives them time to be productive and get other things done.

There appeared to be some concern among ad-averse respondents that both TV and the Internet are "stealing away" their time. Many use unplugged or more self-managed activities – such as reading books, doing crosswords or playing board games, Sudoku or guitar – to help them unwind in a more conscious way.

Music is also a big part of the lives of the ad-averse. Research participants were creative about crafting their own personal music experiences via downloading, compiling personal mixes and sharing with friends. Respondents relied on radio largely when commuting or traveling, but they frequently switched channels and mixed in their own music. There was also a sense that of all media advertising, radio advertising in particular had "gotten out of control." Significantly, more of the ad-averse (24.7 percent) listen to less than an hour of radio per week than those who were not among the ad-averse (14.6 percent).

The time and depth of magazine interaction are limited, but the content is more freely browsed for potential inspiration than other media. The participants in the study noted that the higher level of creativity and quality attributed to magazine advertising sometimes makes it impossible to distinguish from editorial content. Magazines were also recognized as a means to keep ahead in terms of events, fashion and music, despite the less immediate nature of the content when compared to online or daily press. Although in practice almost 84 percent of the ad-averse were able to spare less than two hours a week for magazines, there was less differentiation in this area with the non-ad-averse (74 percent), suggesting that it’s less about the advertising and more about the scarcity of these more open-ended occasions.

MEDIA AS A MEANS TO AN END

The wide array of media choices available today enables ad-averse consumers to select and consume content from several channels in order to meet their particular needs for a given situation or point in time. They know what they’re looking for, what they can expect and exactly where and how to get it. The more discriminating and controlled ways in which they adapt media content to their lifestyles and needs influence the way they assess brands and advertising.

THE CONTINUUM OF AVERSION

The ad-averse group defined advertising in a variety of ways – from being useful and "creative" sources of information about "what is new" to being an "interruption" and (inevitably) a more Machiavellian "ploy" or way to "lure" people into buying something they don’t need, or to influence their behavior (and "always with a catch").

There may be little new in these particular attitudes; however, further differentiation is apparent based on specific motivations and attitudes underpinning the group’s resistance to advertising and brand messages. The study revealed two types of ad-adverse consumers, the "can’t be bothered" group and those with a "be good or be gone" mentality.

Can’t Be Bothered

Having no interest in advertising (and thus a less dynamic relationship with brands and communications), the "can’t be bothered" group avoids or dismisses advertising. It is therefore harder to get this group’s attention or to provoke their excitement unless talking about one of their interests or passions. More likely to be female and/or have children, these people exhibit limited interest in paying attention to advertising – they just want it to "go away." They are wary of being "influenced" and are less focused on the process of shopping, though they will spend money on quality items connected with their passions – for example, road bikes, hiking equipment or musical instruments.

Be Good or Be Gone

At the other end of the aversion scale were respondents who more actively filter and adapt media to suit their needs and interests. Often these were the younger males who were more engaged across various entertainment platforms and technologies, and excelled at working these to their advantage. Although they didn’t consider themselves "consumers," they were interested in new products and services and placed emphasis on finding deals. This latter group used ad-avoiding technologies like TiVo/DVRs, pop-up blockers and satellite radio, and actually spent money to avoid advertising. These measures reflect a higher motivation toward content and therefore less tolerance for interruptions. Hence, it also means a more extreme and activist approach to advertising. These respondents were, however, open to relevant or creative messages but vitriolic in their response to "bad" advertising.

Given these profiles, it’s clear that connecting with the ad-averse is tricky. But there a number of steps you can take as an advertiser that will help you achieve greater success engaging these audience members.

If you believe the audience you’re trying to reach includes the ad-averse, a healthy first step is accepting that no matter what you do, you’ll only connect with some of them some of the time. It’s also clear that just as the ad-averse are spending less time watching television, listening to the radio and reading print publications, they’re spending more time communicating, learning and being entertained through a variety of digital media. This means that you can still reach them by understanding how they like to spend their time and which of the various media they consume – even if their media choices are varied and only utilized to a small degree.

ADVANCED TECHNOLOGY CAN HELP YOU MAKE CONNECTIONS

With this information in hand, you can target your ad-averse audience across their favorite digital media. The number of channels and opportunities is staggering, but if you find that your audience consumes a fair amount of specific digital media, you’re well positioned to reach them. If they visit websites, play video games, use mobile devices, belong to online communities or watch on-demand video programs, you can put just the right message in front of them. And, obviously, you can improve your audience’s receptiveness to that message by carefully tying the message to particular activities they’re involved in or to the medium they’re using.

The ad-averse are a dynamic bunch – which means your advertising needs to be dynamic as well. The "be good or be gone" group is likely to give you the opportunity to entertain, impress and engage them. But to win them over, your ads have to be relevant, creative and captivating. Rich media technologies like Java and Flash (if used to their full potential) are well suited for engaging this audience.

In the past, advertisers found it hard to justify using a broader spectrum of media and more compelling creative formats because they couldn’t measure their effectiveness. The standard model for calculating the return on investments in digital media has historically calculated ROI in a way that didn’t figure in the benefits of dynamic, interactive formats or cross-channel media plans. But these barriers are coming down, and the changes represent a significant opportunity for advertisers.

Today, a new measurement standard is emerging that finally enables advertisers to evaluate each engagement across multiple digital media and through multiple formats such as rich media and video. Called Engagement Mapping, the model enables marketers to learn how consumers interact with advertising wherever, whenever they engage. By evaluating the impact of each touch point, marketers can hone their message delivery tactics and enjoy greater success in reaching audiences that are otherwise more difficult to connect with.

THREE STEPS YOU CAN TAKE TODAY

In light of these significant audience ad-aversion attitudes and behaviors, it’s more important than ever for advertisers to understand their audiences. How do they spend their time? Which channels can be used in what combination to best reach them (since they’re spending less and less time with any single medium)? And will they give you a chance if your ads are more creative and engaging? To help answer these questions, you can get the complete Microsoft study on the attitudes and habits of the ad-averse at www.advertising.microsoft.com/research/ad-avoiders.

The steps you can take today to get the attention of the ad-averse include the following:

1. Investigate the adoption of new media channels for your messages. As you incorporate richer ad formats and additional media channels, take care to accurately calculate your ROI. The extra efforts you make to connect with the ad-averse will likely make a difference, but the precision of your reporting will play a key role in identifying the more specific areas in which you’re making progress. 2. Adopt ad-serving technology that can help you make sense of multiple channels. When you broaden your spectrum of options through a single ad-serving platform, you consolidate your digital advertising efforts. This important step will help you plan and execute campaigns with greater simplicity even as your campaigns grow more complex. And by utilizing a single ad platform, your success can be measured across the spectrum of digital channels. 3. Make sure your measurement tools enable you to evaluate the impact of every touch point across your broad mix of digital channels and formats.

You can connect with the ad-averse – but you may have to rethink your media plan first. If your audience has moved on to new channels, so too should you. Your message should only show up if, when and where it’s something your newly understood audience cares about. To catch their attention, you may also need to rethink your creative, and design engaging, rich-media and video ads that make them want to take a look – without feeling tricked or suspicious.

-Microsoft Advertising Research Group Starcom MediaVest Group

The Customer Advisory Board: A How-to Guide for The Internet Age

Good market intelligence is imperative in today’s increasingly competitive environment. Product segments are commoditizing; product life cycles are shortening; and with smart competitors in almost every segment, CMOs and their teams need all the good market intelligence that they can get to develop and implement their marketing strategies.

The question is, how do you get good market intelligence that is relevant, timely and actionable? Ad hoc market research projects, surveys, syndicated research reports, trade shows, feedback from the sales team and field trips to customer sites are some of the ways of learning market requirements, each with its own associated positives and negatives.

But there is another way to collect information about your market, and that is to set up a multisegment, multipanel customer advisory board (CAB). CABs have been around for a long time, and, if done right, they can make a great contribution to a company’s marketing strategy. Today CABs use teleconferencing and the Web in concert with opt-in panels that allow companies to interact with customer communities globally. CABs provide the ultimate resource for understanding customer needs: customers themselves.

This paper will describe the benefits of a CAB and how to implement one. It should be noted up front, however, that CABs can make only a limited contribution to finding new customers and markets, but they are great if you want to sell more to current customers.

CAB Benefits

One of the greatest benefits of a CAB comes from formalizing the process of engaging in customer dialogue. By establishing a defined business process, CMOs create a resource that provides a regular and steady stream of information that is of value to product and marketing managers and those responsible for marcom, PR and competitive strategy. It also reduces the inevitable risk associated with bringing new products and services to market. A CAB also builds customer loyalty, and is more scalable, flexible and cost-effective than alternative market research processes.

Market Intelligence Today

Companies often decide what products to build and what product features to include, and then they develop go-to-market strategies based on the judgment of decision makers with varying levels of experience. A less risky but often expensive source of market intelligence is to conduct ad hoc quantitative or qualitative market research to answer specific questions managers have about product or service feature prioritization and go-to-market or competitive strategies. While there will always be a place for other research methodologies – such as surveys, industry reports and focus groups – a good CAB can often answer many of the same questions with less cost and effort.

Building a CAB

A CAB may be as simple as a single panel of customers that meets once or twice a year, but this barely scratches the surface of a CAB’s potential. You’ll get even better results from multisegment, multipanel CABs. Here’s how to do it:

Establish Goals

The CAB’s goals should be consistent with your company’s strategic marketing plan, as it is the marketing department that will take ownership of managing the CAB. Marketing should establish two or three overarching goals that the CAB initiative should address during its first year. And these goals should be updated every year.

Include Several Market Segments

CAB panels, ideally consisting of eight to 12 customers each, should reflect the market segments important to your company. You can define segments by product or service, by geography, by customer size, by channel or by a combination thereof. For example, a six-panel CAB might have different groups for customers in Europe, North America and Asia Pacific, and, within those, subgroups of customers who use product A or product B. In this case, you’d end up working with a total of 48 to 72 customers. Then you can grow and add more panels as you need more market segments represented. A CAB resource is flexible and scalable.

Recruit Customers

Participating on a CAB should be a win-win proposition. Customers usually value deepening their relationship with a vendor and are, therefore, willing to join a CAB. In turn, CAB panel members representing key market segments contribute to the development of better products and services, thereby allowing the company to deliver more value and shorten its sales cycles.

Clear criteria must be established for determining who from each customer organization will be invited to join the CAB. It may be a top executive or a key decision maker in a specific department. Candidates might be identified according to their years of experience working for a company and using the vendor’s products there. It could be your primary customer contact with whom you deal most directly. Ideally, your CAB will be comprised of customer representatives who are invested in the vendor relationship. Customers with whom you do significant business, and where there is significant growth potential, should be represented on a CAB panel so you can maximize the value of the relationship.

Assign Ownership

Someone in the marketing group should own this initiative. Once the CAB is built, this person will review the research content or topics submitted each quarter by product and marketing managers and work closely with them to determine how their research needs might be best answered by the CAB.

Hold CAB Panel Meetings

Even in this Web 2.0 world, in-person meetings still have real value, and you should consider holding an annual conference at your offices or other location where CAB panelists can meet and greet each other and spend a concentrated time period focused on your company’s issues.

That said, simultaneous teleconference and Web-based sessions work great for quarterly get-togethers. Call too many meetings, and customers will find participation onerous. But if you meet too infrequently, you’ll inhibit the spirit of camaraderie and teamwork and lose the momentum that delivers maximum results from the CAB.

Most customers are comfortable with online meetings, so it should be reasonable to hold, for example, a 90-minute session each quarter with customers who can really address the questions your company needs answered.

The meetings should be run either by an in-house facilitator or an independent professional. Either way, it’s important that customers are given the opportunity to express themselves in the areas that are important both to them and to your company. One of the major failings of CAB programs is companies using them to pitch their products. That kind of self-serving approach can kill a CAB initiative fast. It’s much smarter to listen to customers and gain a true understanding of their needs. A CAB is an ideal venue and process for listening and learning … and being truly customer-driven.

Q&A: Keith Pigues

Keith Pigues is chairman of the board of directors for the Business Marketing Association International and a member of the Executive Leadership Council. In 2007, he received the Frost &Sullivan Marketing Lifetime Achievement Award and was recognized by B2B Magazine as one of the leading senior marketing practitioners. Since 2007, Mr. Pigues has served as corporate senior vice president and chief marketing officer for Ply Gem Industries, Inc. He was previously VP of marketing at CEMEX USA , where he led all branding, marketing and market development for the U.S. operations of the world’s largest building materials company.

PERFORM: What are you hearing from your members about Web 2.0? Are most already implementing these interactive strategies, struggling to understand and/or implement them or somewhere in between? How are marketing budgets being shifted to address this?

PIGUES: Most business marketers are struggling to understand the impact of Web 2.0 and social media as it relates to their marketing efforts. Many feel that the hype behind Web 2.0 initiatives like video sharing, wikis and social networks is not justified in the B-to-B space. A few of our cutting-edge members like Kodak, Cisco and IBM that are willing to test this emerging space are finding some great results in better engaging their customers. I characterize the current state as one of uncertainty with a strong curiosity.

PERFORM: Most people are familiar with the consumer side of Web 2.0, but they are less clear on how so-called “conversational” marketing can be applied to B-to-B relationships. Can you provide an overview?

PIGUES: Yes, conversational marketing is included in the category of user-generated content. This includes blogs, forums and ratings. And, yes, the B-to-B applications are less clear because many B-to-B companies don’t actively and consistently seek feedback from their customers. Some believe this feedback mechanism lacks structure or statistical significance. I say, if a customer takes the time to provide unsolicited feedback, it’s worth seriously evaluating and acting upon.

Take industrial product manufacturers, for example. Rarely do they proactively and systematically ask customers what they think of their products or ask customers for help in developing the next new product. While this may have been considered too costly in the past, the new Web 2.0 tools can help many companies improve their conversations with customers by opening an online forum or wiki, which provides valuable customer feedback to help accelerate customer acquisition, retention and profits. We have seen some good examples of this use of Web 2.0. GlobalSpec [an engineering-specific search engine]; it does a nice job here.

PERFORM: Where should B-to-B marketers begin in evaluating ways to promote their products and services online? What are common misconceptions and pitfalls?

PIGUES: Unfortunately, many B-to-B marketers are falling short in the Web 1.0 world. They lack an understanding of the common best practices in serving the customer online. Some common misperceptions are things like: social media is for Gen Y; search engine optimization is black magic; my website is a great place to promote my wares versus giving the customers what they need in content and experience to make the best decisions. B-to-B marketers should begin by evaluating the basics of online marketing. The more advanced B-to-B marketers will benefit by understanding how buyers in their specific market desire to receive the information most helpful in their decision-making process. I think this is a good place to start.

PERFORM: Which so-called Web 2.0 tools/technologies do you think are most valuable for corporate marketers who want to extend their brands, engage with customers and, of course, drive sales? Which, if any, do you feel are merely fads, unlikely to bear fruit or succeed as part of long-term marketing strategies?

PIGUES: Comments and ratings are great almost anywhere. Providing an easier way for customers to provide real-time feedback on the product or service experience can help with branding, customer engagement and sales. This, of course, is not a new revelation. However, the Web 2.0 technologies can make this much easier and affordable. Also, RSS [real simple syndication] feeds for aggregation of content and news can help avoid the information overload that many customers face. Forums are a great way to access your customer base to get feedback, not only for new sales opportunities but also to examine issues related to retention and customer service.

At the moment, viral video and virtual worlds like Second Life appear to be fads; however, this could change overnight. I think it’s too early to count them out. If an innovator makes it work, a new technology could be all over the map in an instant. That’s the way the world works today.

PERFORM: Are your members changing the way they structure their marketing departments in response to the demands of the Internet? Are they working with more external agencies or working with them differently?

PIGUES: While most recognize the need to change, many are stuck with the same structure and continue to add one person here or a little extra budget there to explore more effective ways of marketing. Before we see significant change in the structure of marketing departments, there will have to be a shift in thinking regarding human behavior and decision making in the B-to-B space. The antiquated beliefs about how customers make decisions must be reexamined. When this new insight is more widely gained, I think we will see more rapid change in marketing structures to make them more effective. Most of the efforts in the past two decades have been focused on efficiency improvements – doing the same old thing better. Enlightened B-to-B marketers have discovered it’s time for a new, more effective approach to create demand and deliver value to customers.

The same is true with most agencies. They recognize the need to change, and a few are truly making the leap into more effective strategies and capabilities to help their clients create demand and deliver value to customers. Until we see a critical mass of B-to-B companies making the shift, we will likely see more of what is happening today – which is that many of our members are working with online/Internet specialists, as most traditional agencies do not execute well in the interactive space.

While our corporate marketing members are making some positive steps in the way they work with agencies and other external partners, rarely do we see a company taking all of its online initiatives in-house. At the very least, they hire a consultant to educate and guide them on best practices. Search and websites would be common examples. I do think the truly innovative companies will begin to define a new order of working relationships between B-to-B companies and their agency partners. Agencies that take a leadership role in this effort could pave the way for rapid change and gain a significant competitive advantage in the Web 2.0 world and beyond. This could very well be the next battleground for agency success and maybe agency survival.

Google to buy GM?

In a surprise press conference today a White House spokesperson announced that as part of the government rescue of the auto industry, General Motors may be sold to Google (*see note 1 below).

In the face of much political controversy about the ballooning Federal deficit, it seems that Google has stepped in to assist in the transition of the auto industry to a new business model.

It is thought that Google has several new product initiatives ready for the GM acquisition including:


  • Auto-AdSense – dashboards of all GM cars will henceforth include a small central panel devoted to Google advertising;
  • Enhanced local search – connection to the car’s GPS unit will allow location-sensitive search results to be presented to drivers and passengers in real-time;
  • In-GPS video ad-streaming from YouTube linked to addresses entered into the system by drivers.

The new GM cars, “powered by Google”, will also enable integration with Google’s other offerings such as Google Earth and Google Street View. A new “person-search” will allow users worldwide to locate any GM car instantly and watch it via Google StreetView while also being able to see any planned GPS route (*see note 2 below).

“Google has pioneered the free advertising-supported business model in many sectors,” Google representative April Papanatas said today. “Advertising-supported autos are simply the next step.”

Notes:


  1. Google is not buying General Motors.
  2. This is not true.
  3. This news dispatch dated April 1st, 2009.