Rep Firm or Ad Network: Who’s King of the Digital Jungle?

Online spending from brand marketers has increased and will continue to do so. Intensified demand for premium inventory on the major portals and prime destination sites has caused cost per impression (CPM) to escalate. As a result, brand marketers are looking for additional outlets from which to buy media more cost-effectively. As they increasingly look across the long tail of the Internet, they are finding that buying media on larger, high-quality sites within the midsection of the tail can be more cost-effective (lower CPMs) and provide better contextual relevancy through creative integration and customized ad placements. However, the mid-tail represents an especially challenging area of the digital jungle.

As a brand marketer or an agency, you can either research the landscape and buy media directly across multiple sites or you can work through a third party. Buying direct can be a time-consuming and frustrating process; dealing with small-company webmasters with no media experience can test the limits of anyone’s patience. If you opt to work through a third party instead, it’s important that you fully understand the vendor’s role, capabilities, strengths and weaknesses so your experience is positive and your results are maximized.

The two major types of third-party resources are ad networks and site representation firms, or rep firms. Ad networks generally represent thousands of websites and have little or no relationship or control over publisher inventory. They are great if your company’s advertising objectives are broad reach, pure performance and nothing else. Rep firms, on the other hand, act on behalf of fewer sites and are an outsourced extension of a site’s internal sales efforts. They understand and have control over each publisher’s inventory so they can offer guaranteed share of voice (SOV), total ad placement transparency, and creatively integrated media and promotional opportunities. Ad networks have been attempting to re-brand themselves as quasi-rep firms in an effort to garner brand dollars as buyers move down the tail.

The following seven key factors describe what distinguishes a rep firm from an ad network.

1. Site Representation

Ad networks aggregate fragmented online audiences by assembling as many sites as they possibly can to create a channel. There’s considerable overlap as many networks work with the same sites. A rep firm focuses exclusively on a set of quality sites that comprises a desired vertical market or audience segment. Look for the number of exclusive representation agreements a service maintains to determine whether it’s an ad network or rep firm.

2. Decision-maker Relationships

Ad network salespeople rarely have personal contact with individual Web publishers. They can’t afford to, since they’re generally focused on sheer volume. Historically, ad networks have operated by arbitraging media across a wide-reach platform, with an emphasis on performance. In that model, media buying and planning is formulaic, so networks don’t require an intimate relationship with advertisers to develop and execute their media strategy. Conversely, rep firms are heavily invested in face-to-face contact with individual decision makers on both sides of the fence, since matching medium with creative execution is paramount.

3. Marketing Message

Marketers are concerned with how their brand message fits into the overall website context. Ad networks generally lump sites into broad channels and have little knowledge of each site’s content and whether it is relevant to or even safe for a particular brand. For example, a major kids’ brand may not appreciate showing up on a site featuring adult-oriented content. A rep firm focuses on identifying sites that are a contextual fit for the brand’s messaging and can make educated recommendations concerning individual sites that may or may not be right for a brand initiative.

4. Ad Placements

Ad networks typically rely on fully automated programs to place and rotate standardized ads through unsold/remnant publisher inventory. This means that they have little or no knowledge about each site’s total inventory and no control over how ads move through various spots on a site. By working more intimately with fewer sites, a rep firm has enough knowledge and control over publisher inventory to guarantee certain ad placements at a specific frequency (SOV), thereby providing a complete picture of where every ad appeared and when.

5. Creative Integration

Ad networks, being automated, are generally limited to the standard set of Internet Advertising Bureau (IAB) units. And many websites themselves don’t have the in-house experience to implement rich media ad units and customized creative placements effectively. A rep firm can not only use all IAB units, but it can deliver rich-media ad units as well as more customized placements and integrations. These out-of-the-box offerings can include skinnings, microsites, blogs, co-branded navigation bars, promotions, contests, sweepstakes, custom video games and advertorial support.

6. Ad Serving

Publishers turn to ad networks to fill unsold/remnant inventory, generally “daisy-chaining” multiple networks together. From any one ad network’s perspective, however, there is little visibility into the type and volume of inventory. A rep firm, through its exclusive relationships, obtains priority access to key website positions and secures primary inventory deals, allowing for more targeted placements and guaranteed frequency.

7. Customer Service

With their foundations in the pure performance model, ad networks have not had to develop the personnel and skill set required to work one-on-one with brand marketers to develop, plan and execute site-specific media buys. Buying integrated placements across multiple websites can be a complicated endeavor, so it’s imperative that the company and people with whom you work have the experience to execute on what they sell.

Choosing Your Path

So who’s king of the digital jungle – an ad network or a rep firm? The answer depends on the nature of your brand, your marketing objectives and creative strategy. As the online advertising environment continues to evolve, ad networks and rep firms will need to adapt and provide a balance of quantity and quality to survive.

Leader of the Brand

Effective branding creates and maintains relationships with customers; it’s very much an ongoing, dynamic process. Email’s place in that cycle must be one of regular and relevant communication in order to develop a connection with the consumer (frequency) and to ensure that messages don’t languish in the recipient’s in-box (relevance).

In a 2006 marketing benchmark study, Forrester Research found that 97 percent of enterprise marketers were already using, piloting or planning to pilot Email marketing campaigns. In addition, Forrester’s U.S. Interactive Marketing Forecast, 2007 to 2012, released October 2007, predicted Email advertising will reach $4 billion by 2011.

Well-executed Email marketing can lift brand awareness by as much as 58 percent and purchase intent by 66 percent, according to a study conducted in 2005 by Insight Express on behalf of Datran Media. In fact, this degree of effectiveness has made Email a top tactic for marketers. A 2006 survey conducted by Outsell, Inc., found that, while 64 percent of U.S. advertiser respondents cited Email as effective for branding, retailers also employ targeted messages to sell products to their customers. From this research, it’s easy to conclude that branding and e-commerce go hand in hand.

Digital marketers of all stripes, but especially performance marketers, have come to the same conclusion: Increased brand awareness and purchase intent is a valuable by-product when marketers engage in pay-for-performance marketing. Email marketing is one of the strongest tools for performance-minded advertisers, fulfilling a panoply of marketing needs. Publishers use Email marketing to promote multiple advertisers in a targeted newsletter or to build targeted Email databases as broad or narrow as desired for sending out pinpointed messages only to the most likely respondents. Harris Interactive research conducted in 2007 revealed behavior of U.S. adults upon receiving an Email marketing solicitation: 30 percent were prompted to respond, and 30 percent were prompted to purchase.

The stage is set for a dramatic shift in the marketplace. Just as they discovered and leveraged direct-response television in the ’90s, and search in this decade, brands and brand stewards have today found an incremental, efficient and scalable channel in Email. Concerns around performance, branding, privacy and compliance have been addressed head-on by results, respected experts, research and advanced technologies.

An Approach to Managing Viral Marketing

Most people in the marketing business will have heard of viral marketing, and some will have even attempted to create a “viral.” Those who have tried to create their own viral marketing campaigns will probably have discovered that it is not as easy as it seems. Certainly, viral marketing is a tantalizing concept because the cost to distribute your message to millions of people is almost free. It seems like magic – create your “viral concept” and then watch the eyeballs roll in, so to speak.

Unfortunately, many of us have the impression that the process is easier than it actually is because, of course, we only see the successful campaigns and they seem to pop up every day. Those campaigns are just the tip of the iceberg, sitting upon thousands of failed concepts that never made it beyond a couple of hundred or even a couple of thousand viewers.

So viral marketing is certainly a legitimate tactic, but it’s very difficult to execute and entirely different from traditional marketing channels. For that reason, this paper will try to outline some of the differences between viral and traditional marketing and suggest a framework/approach for managing viral marketing campaigns.

APPROACH TO MANAGING VIRAL MARKETING

Viral marketing is an unpredictable tool, with a cost structure different from traditional marketing, which means we need to think differently when creating and managing these initiatives. At the heart of this approach is the idea of starting very small and investing in several ideas at the same time. Get them out there and see what happens. One of the great things about viral marketing is that the feedback is built in. So go ahead and experiment, see what happens and then respond and build upon it.

PORTFOLIO OF EXPERIMENTS

Rather than running viral marketing as a traditional campaign where you plan, budget and execute, viral should be a more experimental approach. Instead of sinking all your resources into polishing one idea, it is better to invest across a portfolio of ideas or experiments. The idea is, of course, to see which ideas take off and which ones fail. In fact, failure might even be encouraged, as it helps you learn and hone in on the elements that are working right. In the words of David Kelley, co-founder and chairman of innovation and design firm IDEO, you want to “fail faster so you can succeed sooner.”

Managing viral marketing as a portfolio of projects is obviously quite a shift from traditional marketing and, therefore, requires the development of new skills. These involve adding new ideas to the portfolio, killing ideas that are not working and planning investments.

MONITOR AND MEASURE

Social media has put a plethora of tools in marketers’ hands that allow real-time measurement and monitoring of their ideas in the marketplace. Technorati (a blog search engine), del.icio.us (a social bookmarking site) and BlogPulse (a blog search engine) are just some of the tools that can be leveraged to see what ideas are being shared and what ideas are taking off in order to inform the direction you take with a viral campaign. Monitoring is not just about measurement, though; it’s about listening and responding.

RESPOND AND AMPLIFY

When your viral efforts take off , you had better be ready to respond, participate and engage in the ensuing conversation. Can you amplify and capitalize on what’s happening?

Smirnoff , for example, executed what seemed to be a very successful viral campaign when it released a music video for “The Smirnoff Tea Partay” to promote its new malt beverage. The video was a huge hit, but at its conclusion, it directed viewers to a page on the Smirnoff website that remained under construction – even after half a million people had watched it.

One person who viewed the video on YouTube left the following comment:

“too bad the URL they list at the end goes to a site w/ generic smirnoff content and a little tiny tea partay banner ad that goes nowhere (it just says “coming soon”).

i mean, so i’m supposed to come back some other time and hope they got the new content up? it was sorta entertaining, but not so much that i’ll come back again and again…”

Response and amplification can be as simple as having a website ready to convert visitors/viewers into customers (and making sure your Web server can accommodate the increased traffi c too). It can also involve putting frameworks in place for continuing the brand conversation and providing tags for customers to use when they create blog posts about your initiative, product or service. And don’t skip the user comments. Look at what people do with the media you put out there and be ready to bring attention to it.

CONCLUSION

In the end, viral marketing is often treated just like regular advertising, but with lower distribution costs, and I think that is a mistake. Viral marketing is turning some aspect of your brand into a “social object” that people want to share with each other, and they share it because they are motivated to share it. This motivation comes from the desire to look smart or clever, be in the know, etc. So in the creation of marketing materials that are worth sharing, remember, they have to be remarkable; they have to be worth sharing.

The Marketing Times Are a-Changin’

Come gather ’round, marketers, wherever you roam. And admit that the waters around you have grown. And accept it that soon you’ll be drenched to the bone. If your job to you is worth savin’. Then you better start swimmin’, or you’ll sink like a stone. For the marketing times they are a-changin’. (My most sincere apologies to Mr. Zimmerman).

So how does it feel? To be on your own? With no direction home? Like a complete unknown? Like a rolling stone? How does it feel to have consumers in charge of what, how and when they watch, read, listen and click? I realize that you may not be feeling the significant marketplace changes taking place all around you. You may be in denial: “C’mon. This isn’t a sea change. It’s a little downpour of Web 2.0 hype. Have you already forgotten the irrational exuberance that was the dot-com boom and bust?” Trust me, those heady days are burned into my subconscious mind. But there’s a big difference today. And all you have to do to understand that difference is to read the business headlines.

NOT YOUR FATHER’S HEADLINES (NOT EVEN YOUR BROTHER’S)

At the turn of the century, the business news highlighted the digital doings of new-school, dot-com companies like Amazon, AOL, DoubleClick and Lycos. Recent headlines are dramatically different: “Anheuser-Busch to Produce Own Content for Web, Mobile,” “ABC News Sells Content on iTunes,” “BBH Viral Video for Smirnoff Raw Tea Takes Off,” “Fox Streams Primetime Shows on Local MyFox Sites,” “P&G’s Secret Deodorant Recruited Participants on the Product’s ShareYourSecret.com Website,” “Cadillac Drives into Xbox 360/Live Racing Game.” Alcoholic beverages, television, deodorant and Cadillac: It doesn’t get much more old-school than that. Or more revealing.

Let’s assume for a moment that, like those aforementioned brands, you are selling stuff that the buying public finds of value. And by “of value,” I’m not referring to “purple cow,” “Blue Ocean,” over the top, word-of-mouth value. Just “of value,” like deodorant that doesn’t stain your shirt, a restaurant that serves a hearty breakfast at a fair price, a car that gets decent gas mileage and rarely needs repairs, or an ice-cold pint of beer on a hot August day: “Hey, Jim. Have you tasted how refreshing this brew is? Wow! Can I borrow your BlackBerry? I want to ping my friends.” Face it, most purchases are for “good enough” products and services, which compete against other good enough products and services.

So what attracts consumers to these good-enough products and services? Great marketing. That’s right; consumers will, and do, exchange their attention, time and money for great marketing. They purchase and carry around with them – albeit in their subconscious minds – various associations, and the subsequent identity, created with emotionally relevant information, designs, experiences and advertisements. They find those associations “of value.”

THE ELEPHANT(S) IN THE ROOM

As the story goes, John Wanamaker, the father of the department store, is said to have grumbled that he knew that half of his spending on advertising was wasted, but didn’t know which half. Today for most marketers, that squandered portion is likely much higher than 50 percent. The media landscape has splintered into a plethora of platforms; sophisticated consumers are spending less time with traditional media; and the few marketing messages consumers do receive are suspect, at best. The funny thing is that most marketers, and their agencies, know this. So why do they continue to pour large sums of money down the traditional media drain, and in that traditional top-of-mind-awareness way? Why do they stop so far short of Step 1, well aware that the holy grail of marketing requires both steps of the two-step process (awareness + value = engagement)?

Here’s why: most marketers and their agencies, like most human beings, spend most of their time and money staying comfortable, preserving the status quo.

“I’m not going to try that. How do I know it will work? How do I defend it? What’s the CPM? What’s the ROI?” Instead of trusting their innate knowledge of an audience (their habits, connections, sensibilities and proclivities) and defending a unique marketing approach with a coherent, persuasive appeal, it’s much easier, efficient and, at the end of the day, profitable (in the short term) to simply tow the line and toss out the numbers. That’s the truth, the elephant in the room. And it’s also true that those risk-averse advertisers and agencies rarely know for sure who sees their ads, let alone whether the ads influence anyone (the other elephant). So why not try something new?

THE MASSES HAVE LEFT THE TREE

The marketplace of old resembled a mass of caterpillars hanging around the tree of traditional media, venturing down the branches of mass distribution and consuming the offshoots of brand advertisers. No more. The masses have escaped their pupae, spread their distinctive wings and are fluttering around fields blossoming with an abundance of colorful and succulent offerings. A fleeting glimpse is all one usually gets of them.

So what’s a marketer to do in this chaotic environment of abundant products and services, fast-flying consumers and a rapidly changing landscape?

Will Rogers once remarked, “Chaotic action is preferable to orderly inaction.” Orderly inaction describes today’s ineffectual, status quo marketing. Chaotic action is the new marketing imperative; to wit:

  1. Be wherever and whenever your audience is most receptive to your message, verifiable metrics be damned. Like butterflies (OK, enough with the metaphors), consumers are best observed when they are “feeding.” With some experience, you’ll quickly learn to find “hot spots” of butterfly activity.
  2. Get their attention by being unique, relevant and authentic. Bright, plastic flowers may attract butterflies from a distance. But once they get close enough, if it’s the wrong species or devoid of aroma and taste, they’ll quickly flit away to something worth engaging with.
  3. Deliver value in exchange for their time, since the key to long-term marketing success (read: ROI) is to get them to come back for more and to bring all of their friends.
  4. Keep notes on what you observe regarding the habitat, the offering, the way the butterfly moves and communicates, and other matters of interest. And you can leave your nets at home. You’re not trying to capture anything.

The marketing times, they certainly are a-changin’. Unfortunately for us marketers, that’s about the only thing we can be certain of today.

The Internet Generation Conundrum

Born with a mouse in their hands and weaned on mobile phones, IM and Facebook profiles, the Internet generation hates me. My carefully crafted collateral, commercials, even my websites are dismissed by this audience as blatant and futile attempts to deceive them. They think I’m selling something that’s not as good as I say it is. They believe I am a liar.

Guess what? They’re right.

But let me back up a bit. Hi. I’m Steve. I’m a marketer. And the Internet generation hates me.

But that’s just part of the game, and I came to win. Composed of young Gen Y’ers and Gen Z’ers – anyone born after 1982 – I call them the Internet generation, or the iGeneration. Many of the iGen’ers think that if I had the time to produce fancy collateral and polished Web pages, then I must have also had time to inject lies and falsehoods into those vehicles to trick them into considering or purchasing my product.

As a marketer, it is my job to consider all of this when I create programs designed to reach a specific audience, even one as skeptical as the iGen’ers. This audience invented online social commentary and word-of-mouth marketing without even thinking about it. They turn first to their friends to learn about a product’s value; they observe what other people are using before they jump in; and many enjoy discovering new things and sharing their finds with their friends. Shiny new things are a form of fashion – hard to discover but fun and easy to spread, even scoop. That process of discovery is something modern marketers must tap. Or be vilified and die.

So the iGen’ers don’t believe our fancy ads in magazines. They don’t believe the advertising we place on TV or radio – though they will pay attention to a humorous or self-effacing commercial, even reposting it on YouTube if it hits the right note. And many refuse to click on our banner ads or fill out Web forms for fear of being targeted for additional marketing. So how do we reach them?

Don’t Reach. Embrace.

First and foremost, remember that the Internet generation prefers to do its own primary research, first asking friends and family what they are using, then turning to Google to see what other people think. I offer these words to market by: Products don’t sell. People do.

Apple has figured this out. Look carefully at Apple’s iPod television commercials, billboards or posters. You’ll see lots of happy, young people dancing in silhouette against a colorful and ever-changing background. Throughout the commercial, those distinctive iPod white headphones flow in sync to the silhouette’s energetic movements. What you don’t see is a focus on the iPod’s product features – how to select a song or change the volume, for instance. And that’s because Apple isn’t selling you an MP3 player. It’s inviting viewers to experience the Apple lifestyle and become part of the iPod community. The implicit message is this: Use any other MP3 player, and you’ll hear good music, but use an iPod and you’ll feel good. You’ll be part of the club. That silhouette is you. (FYI, the silhouette is an old real estate marketing trick: Get the intended buyers to imagine themselves in the space. That’s why you remove all your personal belongings when you show your house – and bake cookies – making it easier for
them to imagine their stuff in your home.)

Apple’s engineers did not design those white iPod earbuds. They are a pure Apple marketing trick designed to make the visible part of the product stand out. But the earbuds accomplish something much more important: They act as a status symbol. They were a way for Apple’s early adopters to reference-sell while also making them feel part of an exclusive club. For $79 – the price of an iPod shuffle – you, too, can join the club. And new members gladly don those white earbuds and continue to flaunt the iPod lifestyle to the few who remain on the outside. The cycle continues until the club is no longer exclusive and the iPod becomes part of our everyday vocabulary, which, by the way, happened in less than three years.

Give Them a Megaphone

So let’s say you don’t have a product like Apple’s iPod, where you can combine great design with great marketing so effectively that you entice iGen’ers to unwittingly become part of your go-to-market plan. Or, worse yet, what if your customers are not happy with something you did before or are upset that your product did not live up to your promises in the past? How can you overcome such a real, emotional deficit?

The best thing you can do is to create a community where your existing and potential customers can vent or view others’ frustrations in the open. Create a space where any member can join the discussion, witness your real efforts to improve and see firsthand how you treat your customers. Add a simple feature to your website to encourage conversations. Create a forum.

Around 2003, I became responsible for product marketing at Avid Technology, Inc., just as the company ran into a huge problem. Ongoing product delays and lingering quality issues were threatening sales of its core revenue engine, the Avid Media Composer video- and film-editing system. Years of product issues and unscrupulous pricing practices were enticing many longtime customers to abandon Avid for the first viable, competitive solution: Apple’s cheaper Final Cut Pro. Previous market research had misled Avid’s management; customer surveys seemed to say, “Love the product, hate the company.” Consequently, little was done to improve the company’s relationship with its users. But now, those users were starting to hate the product too.

The most upset users turned to the only outlet for their frustration, the decade-old Avid listserv (Email list) known as the Avid- L. Here, Avid’s most loyal and most vocal customers vented their spleen against Avid’s management. Concerned that potential customers would be frightened away by this online soap opera, Avid’s gut reaction was simply to shut down the Avid-L. Avid expected that this would put an end to the flames of discontent. But their self-preservation instinct was dead wrong.

Around the same time, I was also given responsibility for getting new users into the Avid fold. We informally called this target group the “future professionals,” and our goal was to reach beyond existing customers we already knew and who already knew us. I realized we would need happy, vocal customers to spread our messages and help generate lift among other new prospects. We called it “the megaphone effect.” If vocal customers told the world how happy they were with our product or, even better, how delighted they were with the company, future customers would believe their words much more than ours. In short, even non-customers would tell their friends good things about Avid, and our reputation would be improved.

So instead of shutting down the one place where our customers’ voices could be heard, I hired a “customer advocate” from a former competitor. Known famously online by just her first name, Marianna, she rebuilt that single Avid-L forum into more than 70 discussion threads focused on specific segments of Avid’s user base (see Figure 1). Furthermore, she invited the most vocal participants to moderate these forums (for free) and she encouraged them (and all users) to express their issues online. If customers could not achieve satisfaction using Avid’s existing channels, Marianna committed to doggedly champion their issues to internal company stakeholders. She shared her office, mobile and sometimes even her own home phone numbers in the online forums.

Simultaneously, we built the Avid user groups from a sleepy handful to more than 65 active worldwide groups. We organized annual user receptions for more than 2,000 customers and shared new product news with them before the opening day of the National Association of Broadcasters (NAB) conference, a key event for our customer base. We even introduced customers to our CEO so that personal connections could be made and grievances aired.

The end result of all these efforts was that previously disgruntled customers, who were preventing new users from considering our products, turned into happy and vocal advocates for the company. And despite nagging product issues, the company recorded record unit and revenue growth during a market downturn.

Reach Them Where They Live

I mentioned before that many iGen’ers are too savvy to click a banner ad, or they are apt to dismiss your website as a pack of lies. So what can you do to get them to pay attention to your marketing messages? The answer is obvious: If you can’t get them to come to you, then you need to go to them.

Late in 2006, I accepted a challenge to become vice president of marketing to convert a failing enterprise software firm into a consumer company and launch a free social-sharing product called Tubes. Tubes lets users share any type of digital content over the Internet, and it is more versatile than the myriad simple file-sharing and backup solutions available on the Web. Yet Tubes’ usefulness was part of our problem: The product did so many different things for so many types of users that it was hard to communicate a simple value proposition.

To gain traction, we needed to occupy a particular, existing shelf in our target audience’s mind and solve a single, specific issue that was problematic to our target group. And we needed a marketing vehicle that would reach our audience where they lived and help them spread the word for us. We decided to use YouTube as the delivery mechanism to keep costs down while leveraging the viral features of the popular platform.

I was familiar with a unique form of advertising I dubbed “Trojan-horse infotizing” (entertainment that sucks you in before you realize it is a commercial), and I hired a new type of marketing firm, French Maid TV, to produce a viral video. I had come to know French Maid TV after searching online for content made specifically for the video iPod. YouTube was littered with amateur (mostly bad) video or professional (mostly illegal) video clips. However, there was a paucity of content made expressly for this medium that had high production values, stickiness and a built-in need to share with friends.

Tim Street, the creator and producer of French Maid TV, offered a unique solution: five-minute videos starring sexy French maids demonstrating a solution to a technical problem; for example, “how to register a domain name” or “how to perform CPR.” A Hollywood producer by trade, Street hired real actresses, and he filmed and edited the French Maid TV clips with the high production values of network sitcoms. The viewers, mostly males between the ages of 18 and 35 (i.e., the target audience for Tubes), would subscribe to get these podcasts from the iTunes Music Store or search and share them with friends via YouTube. I banked on pent-up demand for a new episode of French Maid TV (the last episode had been released six months prior), and I knew that new iPhone users would be eager to try the built-in YouTube video player with content specifically made for the iPhone (our video was encoded in iPhone-friendly H.264 format, while most YouTube video was simply encoded in Flash format).

Our episode, entitled “How to Share Photos,” debuted in June 2007, and it showcased Tubes in the context of a spy caper (see Figure 3). The sexy French maids had to recover a stolen uniform, and they needed physical proof before the sexy police would take action. So the maids went on a stakeout and used Tubes to share spycam photos and videos of the perpetrator with the police. We literally seduced the audience into watching our decidedly PG-13 featurette before they had any idea it was a commercial for Tubes (see Figure 4). As a final viral hook, we presented a unique URL and encouraged viewers to visit our site and sign up for a private “tube” that contained exclusive high-resolution photos and videos that the French maids collected during the caper.

By the first weekend, our viral video had been viewed over 2 million times, luring over 50,000 visitors to our site and over 30,000 new users to try Tubes and share it with their friends. No other medium could have more economically distributed our message right to the hearts of our target users and straight onto their own iPods.

In Summary

While traditional approaches are waning in effectiveness, there are ways to reach and entice the iGeneration. You can make them an intrinsic part of your go-to-market plans like Apple’s white headphones. You can give their voices a platform like Avid’s community forums. Or you can use their own medium and RSS feeds to reach them right within their favorite hangouts, like Tubes’ You- Tube video. Whatever you do, just make sure you give them something of value and a simple way to help them spread your message.

The Kids Are All Right – Are You the Problem?

I have had the great pleasure, for the better part of the past seven years, to act like a kid, think like a kid and hang out with kids – or young adults as they like to be called – as a part of my day job. When I began working at Creative Strategies in 2000, I was tasked with trying to get inside the mind-set of the youth demographic and learn about their demands for technology products. Gaining insights into these future consumers is an increasingly desirable area of research, particularly for larger technology companies.

In this article, I’ll share just a few of my experiences from the past seven years as I sought to answer questions like, “Why is this demographic so unique from a technological point of view?” and “How do we reach this demographic with products, services and marketing in new and fresh ways?”

The Questions

I have found that when trying to get information about a demographic or group, it is important to ask the right questions. When I first began actively working to understand the Millennial mind-set, I found it was fairly easy to relate to them, given that I’m close to the upper end of the Millennial age range. Many of their demands and desires for using technology were similar to mine. But I was very interested in the “why” part of this question.

Exploring ‘Why?’

To a lot of people, the answer to “why?” seems rather obvious – this is the first generation to grow up with technology. While this is true to a degree, I would argue that they actually grew up with the idea of technology. To assume that every person under 30 in the U.S. grew up with a laptop or PC, a connection to the Internet and a TiVo box is a stretch. However, even among those without prolific access to all these technology luxuries, the vast majority in this age-group share many traits. If technology played any role in these kids’ lives as they matured, it was more because of what they understood to be possible with technology, as opposed to how technology directly impacted them. The next generation of kids, the ones who are younger than 7 today, will have much more opportunity for technology to directly impact and shape their entire lives.

I call this Millennials’ technological worldview. When products and technologies exist, the capabilities of that new technology are generally known and understood. This is primarily a result of marketing, but the rise of online community and user-generated content has introduced a new wrinkle. Today’s interactive marketing initiatives, such as viral campaigns, make it possible for anyone to clearly understand what is possible with technology – regardless of whether they actually use it or not. The iPhone is a great example. Ask any kid of any race or socioeconomic status in the U.S. about the iPhone, and there is a high probability that he doesn’t own it but he knows all about it. This is exactly what shapes this demographic’s technological worldview.

Next, let’s take a look at some successful approaches for reaching this demographic as well as some examples of products and solutions that catch Millennials’ attention.

Making the Products They Crave

I’ll address this issue first from a hardware/ software standpoint and then talk about marketing and branding.

To reach particularly the younger consumer, the design of your product and solution has to stand out. I conducted a focus group with teens to gauge their feelings about laptop brand design and was amused when several of them declared, “I wouldn’t be seen in public with that computer.” When I heard this, it emphasized something we already knew: Technology is involved in establishing social status and is regarded as a form of self-expression among young people. If the look and feel of a product does not fit their style or the image they want to portray, they won’t embrace it. Moreover, they want things personalized and customized to their unique tastes. Members of the youth demographic feel they are each individual trendsetters, and they seek to promote their perceived uniqueness. That’s one of the needs that MySpace and Facebook answer for them.

So innovation in hardware design is essential when approaching younger consumers. They must be able to say, “I want people to see me using this.” Apple does a great job at a lot of things, but it has been singularly responsible for making product design a high priority in the technology industry. Our research found a large number of kids at colleges around the country who did not own Apple computers wished they did (if they could afford one). Apple makes products that consumers are proud to carry around and be seen with. This needs to be the goal of any consumer-facing product.

The emphasis on design doesn’t end with hardware. It also includes the software and the marketing. If sites like MySpace and Facebook don’t continue to innovate and improve the online experience, the Millennials will quickly leave and go to the next place that fits their digital lifestyle. Features and functions need to not only work well, but look and feel cool as well.

The same can be said for marketing campaigns; they need to be fresh and artsy but also relevant. You need to speak to these kids about things they care about and do it in the language they want to hear. It’s tough to glean this information about Millennials, but it’s critical to anticipate their needs before they even know they have them.

Marketing to Kids Who Hate Marketing

I am continually asked by marketing folks in all different industries about how to reach a demographic that is so incredibly media and tech-savvy and, in general, resistant to commercial messages.

When it comes to media and marketing, this demographic truly has a nose for B.S. They can tell when a company is trying to sell them a line, and they do not respond well to it. At the same time, however, we have found in our work that the youth of today actually do want to interact with brands, especially the ones they like. They want to be heard and use their voices to help influence that brand to create better products for them. And, perhaps more important, they have the technology at their disposal – whether Email, blogs or discussion boards – to act on these desires and let the brands know how they feel.

Virgin Mobile, for example, has a service called Sugar Mama that embraces this fact. Virgin researched the market first and tested the idea among teens, who reported they liked the ability to join brand dialogues, but wanted to be compensated for their time. So Virgin Mobile structured the service such that users can interact with ads or brand contests in exchange for free minutes.

Marketers must also promote the experience or value of their products clearly. Too often, consumers are left asking, “What does that product or solution really do for me?” Again, Apple serves as our textbook example of how to do things right. Ads for the iPhone show its features and usefulness in practical, relevant ways. Also referred to as “scenario marketing,” these ads featured people explaining how the iPhone helped them in a real-world situation to which viewers can relate. So not only do viewers learn that the iPhone is a cool and revolutionary new piece of technology, they see that it’s also a device that can be useful in consumers’ everyday lives.

Communicating a product’s practical applications to customers’ lives should be every marketer’s goal – as well as reinforcing that message at every touch point.

It’s All About Lifestyle

Lastly, marketers need to recognize the importance of being either a lifestyle brand or fitting into a lifestyle. Millennials are very particular in their desires to have products that were designed with them in mind, so brands need to complement young consumers’ lifestyles, even if it means enabling or complementing an experience from another brand. A great example of this is Nike+, a service Nike provides as an overall health and wellness program. You can buy a simple kit that tracks your workouts, calories burned, etc., and gives you progress reports and tips for staying fit. What is notable is that you can use the service with any shoe; it doesn’t work exclusively with Nike shoes (although Nike, of course, hopes to sell more sneakers as a result too). By letting customers enjoy this service with whatever shoes they buy or own, Nike is adding value to a consumer lifestyle in an authentic way. It sets Nike apart from others in its space.

Closing Thoughts

Younger consumers want lifestyle experiences, and they want the brands they buy to share their values. Be intentional in marketing the experience of your products in ways consumers can tangibly relate to and show clearly how those products enhance and add value to people’s lives. Finally, to reach the youth demographic, strive to be an authentic lifestyle brand that’s not just selling a product but encouraging a responsible lifestyle. You will be rewarded with the loyalty of customers who want to tell others how much they like your brand.

New Communications Approaches in Marketing

The early part of the 21st century has witnessed an explosion in the number of media that marketers can employ to reach their customers. This began in the 1990s with the use of the Internet as an advertising medium. Web pages became the “new” medium, with banner and other types of similar ads (e.g., buttons, rectangles, etc.) that customers clicked in order to be sent to the advertiser’s website. Internet advertising augmented the set of communications tools that marketers had used for decades: television, radio, print (magazines, newspapers) and outdoor advertising.

These traditional media are not disappearing. According to Advertising Age, it is estimated that nearly $285 billion was spent on advertising in the U.S. in 2006, with nearly half of that on cable and national TV. [1] Radio is experiencing a new boom, with the advent of satellite and other digital formats. Outdoor ads are becoming more creative all the time, with digital technology enhancing potential interactivity with customers in urban areas. Finally, while newspapers and magazines have been the most negatively affected by new media, they are still important for business-to-business and retailing marketers, among others.

However, it is clear that major marketers are shifting their budgets today into new media categories. For example, Procter &Gamble spent $3.5 billion on “measured” advertising in 2006, which includes print, TV and other “old” media. But the company also spent $1.4 billion on “unmeasured” media, which includes events, contests and the new digital media.[2] The U.S. auto industry pulled $1 billion out of the traditional “measured” media in 2006 and put much of it into the Internet and other new media formats.

Why Are We Seeing This Shift Away From the ‘Old’ Media?

What is driving this movement toward new media? There are at least four factors commonly cited (in no particular order):

  1. The existence and improvements of new technologies at home and in the workplace. For example, the rapid penetration of digital video recorders (DVRs) that enable people to fast-forward through TV commercials means that advertisers need to seek other ways of reaching their target markets. Also, the increased sophistication of mobile devices provides marketers with another medium offering huge audience penetration. This is in addition to the rapid diffusion of broadband in the home and new devices that make it easy to watch streaming Internet content on TVs.
  2. Marketers today are talking of creating “experiences” for their customers in an attempt to differentiate their products and services from competitors. It is difficult to do this with the traditional media, which tend to be one-way communications from seller to buyer. As a result, marketers are looking for ways to interact more with their customers and vice versa. An example is Kraftfoods.com, where consumers can share recipes and cooking tips and communicate with each other directly.
  3. While advertisers still talk about the popular 18- to 34-year-old demographic, there are vast differences in the media habits of an 18-year-old compared with someone who is 30. It’s generally accepted that today’s markets are becoming fragmented, and traditional demographic breakdowns are becoming less and less useful. In particular, teenagers and early 20- somethings (often referred to as Generation Y) are less likely to watch TV and listen to the radio and more likely to get product information from friends and to communicate via text messaging on their cell phones.
  4. Marketers are more interested in “behavioral targeting”; that is, focusing on developing personalized messages that deliver real-time information where people are shopping. This is particularly easy today on the Web (where it’s possible to track “clickstreams” – the paths that people take when surfing the Web) and is becoming more prevalent in any geographical location through their personal GPS “system,” the cell phone or other mobile device.

The emergence of “alternative” media and increased competition has fragmented markets, shifted power in the transaction to buyers and resulted in less TV viewing.

These changes have impacted marketers and the “modified” mass communications model, as shown in Figure 1. Historically, marketing communications have been one-way, with marketers developing content (ads) and then choosing media (TV, radio, print) for distributing it to customers. Customers in that scenario did not have the opportunity to “talk back.” In the new media environment, customers interact with the messages and the media by blogging, clicking banner ads and setting up pages on MySpace with product recommendations. Customers also talk freely among themselves in chat rooms and on bulletin boards, in addition to communicating with companies.

These changes in the marketplace are not simply U.S. phenomena. The same trends are occurring in other countries. For example, on a trip to India, this author found that people of undergraduate age are just as familiar with and use social networking and other similar media just as frequently as their counterparts in Western countries. The same holds true for China, Singapore, Korea and Japan.

As a result, while there is still a considerable amount of experimentation and searching among these new ways of reaching customers, it is clear that many of them are here to stay and that we will witness continued expansion in the ways that companies attempt to reach their customers. At the same time, users of these new media face an array of problems in implementing and measuring communications campaigns that leverage both “old” and “new” media.

What Are the New Media?

Although there may be disagreement over what exactly comprises the set of “new” media, the following would be included on most lists:

  • Internet advertising: This includes traditional Web page ads like banners and the newer, most popular form of ads called paid search, which was popularized by Google.
  • Product placement/branded entertainment: Because consumers now have the ability to skip ads in recorded programs, more companies are looking to incorporate their brands directly into content such as TV shows and video games.
  • Social networking sites: Of all the new media, social networking sites like Facebook, MySpace, Second Life and YouTube have generated perhaps the most publicity. In fact, the growth of these sites has led to the notion that we are now in the Web 2.0 era, where user-generated content and discussions can create powerful communities that facilitate the interactions of people with common interests.
  • Blogs: A blog is a website, usually dedicated to a theme such as technology or a favorite TV show, established and maintained by an individual who offers his or her opinions and invites others to comment, thus creating a dialogue around the theme.
  • M-Commerce: Mobile commerce (mcommerce) is still in its infancy in the U.S., but it is widely used in many other countries such as the U.K., Japan, Korea and China. Marketers can send a variety of messages via cell phone to consumers who have agreed to receive such messages, termed “opt in” customers.
  • “Buzz” or viral marketing: This is also referred to as word-of-mouth (WOM) marketing. For many product categories, customers rate friends, families and professional colleagues as their main source of information when purchasing products and services. The marketer’s goal is to stimulate WOM about a brand among trusted personal sources, rather than through an unknown actor in an ad. WOM marketing actually employs a number of different media – social networking sites, special events, blogs, online communities and text messaging, among others – to help spread news about brands from personal sources.

Many companies today are using some or all of the above new media to develop targeted campaigns that reach specific segments and engage their customers more closely than traditional media can. For example, the luxury fragrance brand Chanel has used a number of the media outlined to promote its Coco Mademoiselle perfume, including:

  • Ads on websites such as the New York Times and New York magazine;
  • Search engine marketing on Google and Yahoo;
  • A special website where users can take a virtual tour of Coco Chanel’s Paris apartment;
  • Communications with bloggers, such as the Beauty Addict and Blogdorf Goodman; and
  • Email messages to bloggers and VIP customers with passwords granting special access to a new commercial featuring the actress Keira Knightly cavorting throughout Paris.
  • What Are the Major Issues Facing Marketers?

    The new media are clearly valuable additions to the tool kit marketers have used for years. The ability to engage customers through interactivity and communicate with targeted segments delivers benefits that traditional media cannot.

    However, with these increased communication capabilities comes a new set of problems that must be faced by CMOs and other senior marketing managers. The Marketing Science Institute conducted two discussion groups at conferences held in April and September 2007 to explore the major issues these senior marketing executives face and found the following areas at the top of their list:

    Metrics

    There is considerable uncertainty about what metrics to use to gauge the effectiveness of the new media. For example, what are the appropriate metrics to use with social networking sites – site visits? That is one measure, but it does not indicate how engaged a customer becomes with a brand after visiting the site and communicating with others. Brand engagement?

    In 2006, the Advertising Research Foundation surveyed a number of research firms on the definition of engagement, and there were as many different definitions as there were firms involved. Internet advertising has used clickthrough rates for many years, but today’s marketers want to measure completed purchases to gauge the effectiveness of banner and similar advertising, not just count how many people were transported to the advertiser’s website. The traditional metrics used for TV, radio and print (e.g., reach, frequency) do not work in this new environment.

    Integration

    Integrated marketing communications (IMC) prescribes that marketers should be consistent in their messaging and support of the basic brand value proposition, even while the nature of the executions varies widely.

    It is easy to see that, as the number of communications methods increases, it becomes increasingly challenging to ensure that the messaging is consistent across all the media. Moreover, marketing managers no longer control the messaging the way they used to be able to. In TV, print, outdoor and radio, the communications are one-way and controlled; with blogs, social networks, WOM marketing, etc., it is not possible to fully control what customers are saying about the brand. Therefore, a classic IMC campaign integrating one-way media with new media devices presents a control problem that did not exist before.

    Planning and Budgeting

    Developing a media budget and plan has never been more difficult. Despite vast improvements in technology in allocating money over media, the state of the art is dependent upon traditional metrics like reach and frequency. As noted earlier, these metrics are relevant for new media. But on what basis do you allocate money to creating a social networking site? Or a blog? Or WOM stimulation? The new media metrics’ equivalent of reach and frequency measurement generally do not exist.

    Therefore, the following questions must be addressed:

    • What should digital media objectives be?
    • How do you set an integrative budget with traditional and new media?
    • What is the point of diminishing marginal returns with these media?
    • Should the new media be viewed as supplementary (adding some frequency to reach goals) or complementary (delivering something different)?
    • How much money should be allocated to each medium?

    Brand Control

    In the past, there was no question that the marketing manager controlled the message and the media. TV advertising, for example, is classic one-way communications, with the manager controlling what is said about the brand and, through media purchases, how and where it’s being conveyed. “New” media do not permit that level of control. Blogs and social networking sites are largely outside of the authority of the marketing manager, both in terms of the message being delivered about the brand and what is being said in online conversations. This shift in control requires new thinking on the part of the manager about how to (or if to) use one of the newer media.

    Measurement

    Perhaps the key issue is how to measure the impact of spending in these media. While we have many years of experience with marketing-mix modeling, we have relatively little experience measuring the impact of, say, money spent on social networking sites alongside the amount spent on traditional media. More importantly, it is not clear that the sales or profit effects of TV advertising would be the same for new media. They can’t be assessed the same way. An advantage of the new media is that experimentation is relatively inexpensive and quick to evaluate. Thus, it is easy to test different Internet advertising approaches. However, the spending levels in new media are lower than traditional media, which may make standard statistical methods difficult to apply.

    The ‘Bottom Line’

    Companies that wish to communicate with their customers need to consider the impact of the rise of “new” media. Whether it is a business-to-business or business-to-consumer company, manufacturing or service, marketing managers today have to understand that their customers are using a variety of media to obtain information about products and making purchase decisions based on that information.

    While it is exciting to have expanded options, we still do not know much about how to manage them optimally. As a result, many companies today are experimenting with parts of their communications budgets to see how these media “work” in their environments. Within a few years, as marketing professionals better understand how to measure their impact, these new media will be a standard component of most media plans.

    ENDNOTES

    1. Advertising Age (2007), “Top 100 Spending up 3.1% to $105 Billion,” June 25, p. S-2.
    2. Bob Tedeschi (2007), “P.&G., the Pioneer of Mixing Soap and Drama, Adds a Web Installment,” The New York Times, October 15, p. C1.
    3. Adapted from: Donna L. Hoffman and Thomas P. Novak (1996), “Marketing in Hypermedia Computer-Mediated Environments: Conceptual Foundations,” Journal of Marketing, 60 (July), p. 53.

    Overlap Matters

    Traditional wisdom says that cross-site duplication of online advertising is bad for business. And indeed duplication has traditionally been seen as redundant – a sign of media waste. A report from your third-party ad server would highlight which sites overlapped with which other sites on your buy, and by how much. That way, you could act immediately to pare back the buy and minimize the overlap. But as more digital media research emerges, the industry is learning that overlap is actually a positive thing. As it turns out, customers who see your ads on multiple sites are your best converters.

    In other words, your target audience – the people who register on your site, fill out your lead forms and ultimately become your customers – have, for the most part, been reached across multiple sites.

    Because overlap boosts the odds of a purchase occurring, we know that a conversion is not simply the result of the last ad clicked. This means that the area of overlap represents a landscape filled with rich resources for marketers. Every engagement a user experiences contributes to the conversion event. And every touch point you share with your consumers contains information that you can use to make better media decisions.

    METHODOLOGY

    The Atlas Institute analyzed 16 advertisers who tracked their media campaigns with Atlas for the first quarter of 2007. Users were classified as either “exclusive” to indicate they were reached by a single publisher or “overlapped” to indicate they saw ads on two or more publishers. Overlap for users who converted was categorized on the same basis. Primary conversions considered for this study were sales, lead or registration confirmations. The analysis spanned more than 300 million cookies, 5 billion ads served and 1.7 million conversions. As with all research done by the Atlas Institute, the analysis eliminates the bias of cookie deletion by using only stable, long-lived cookies.

    OVERLAP RESULTS

    On average, 30 percent of users saw ads from multiple publishers, while 53 percent of users saw ads from multiple placements (Figure 1). Within a campaign, overlap among the sites ranged from 8 percent to as high as 60 percent. Placement overlap showed similar variety, ranging from 35 percent to 72 percent overlap per campaign. In addition, increased overlap dramatically drives up frequency. On average, the impressions consumed by site-overlapped cookies were 4.4 times higher than those reached on a single publisher site.

    CONVERSION OVERLAP RESULTS

    Duplication amongst converters is even more extreme than for impressions. On average, 66.7 percent of users who triggered a primary action tag saw ads from multiple sites (see Figure 2). At the placement level, 86 percent of conversions came from the overlapped group.

    Figure 3 illustrates the variability of overlap across the 16 campaigns. Higher-volume campaigns experienced significantly higher conversion overlap than smaller ones. And users reached on multiple publishers accounted for a higher share of conversions – on average representing only a third of the total users reached but two-thirds of conversions. A user reached across multiple publishers was twice as likely to convert as one reached on only a single publisher.

    What This Means for Advertisers

    It’s critical to understand the drivers of overlap. Not surprisingly, large buys show much greater overlap than small buys. Additionally, buys that advertise heavily on networks or large portals show much higher overlap than those that do not. The degree to which overlap impacts conversions will differ greatly from advertiser to advertiser, since there’s no consistent correlation between reach and conversion overlap. With that in mind, here are our recommendations for using these findings.

    Measure the overlap in every campaign. Overlap varies wildly across campaigns. Spend levels, the composition of publishers, placement choice and the usage of ad networks all have a dramatic effect on the amount of user duplication experienced. Overlap should be viewed and weighed within the context of achieving the overall campaign goals.

    Maximize overlap for branding. Brand advertisers prefer to surround their target demographic with their messaging and increase brand awareness by maximizing overlap. Identify buys that have high reach on your target demographic and then seek publishers that have high overlap with those buys. The ability to identify the exact amount of duplicated reach and conversions during campaigns provides a powerful negotiating tool with ad networks and traditional publishers.

    Manage overlap’s impact on frequency. The Atlas Institute’s Optimal Frequency study proved that increased frequency correlates with diminishing returns for direct response campaigns.[1] Since overlap drives up frequency without the advertiser being aware of it, dropping buys with high overlap and reallocating the dollars to publishers with superior exclusive reach is an easy first step to increasing efficiency. Look for publishers that do a good job exclusively reaching converters.

    Keep buys that deliver targeted reach. The ubiquity of overlap among converters highlights the shortcomings of current reporting standards, which attribute 100 percent of the conversion to the last impression or click. Making smart media-planning and creative-design decisions requires an in-depth understanding of a user’s behavior throughout the purchase cycle. Some buys do a great job of reaching your target audience but aren’t credited for conversions because they’re not the last ad seen.

    Understanding how your buys are reaching converters may provide important justification for more expensive media buys like rich media, web video and sponsorships.

    ENDNOTE

    1. Chandler-Pepelnjak and Song, “Optimal Frequency: The Impact of User Frequency on Conversion Rates,” The Atlas Institute.

    The Corporate Website: Five Strategies for Making Your Site More Relevant and Social

    Corporate marketing messages do not always reflect the market’s perception of a product or service. The practice of “push” messaging was designed to shape a brand and suppress its inevitable weaknesses. After all, even the most reliable products and services have the potential to behave in ways not anticipated by the consumer. And in the past (pre-Web) world, customer experiences were usually self-contained, disconnected and not easily shared with others. Companies were therefore able to control customer expectations and take decisive corrective measures on their own terms if something went awry.

    But in today’s connected marketplace, people outfitted with low-cost digital devices and personal publishing tools like blogs are sharing and distributing content that can have a dramatic impact on brand perception. Companies can no longer ignore the content customers create and the methods they use to spread it. The solution: companies must not only listen to their customers, they must also engage them online.

    AN EVOLVING WEB

    In 1989 Sir Tim-Berners Lee developed the information protocols and markup language necessary for sharing and transmitting pages on something he called the World Wide Web. But many people had already created communities for themselves on the Internet. From the mid-1980s on, technical enthusiasts had been using pre-Web forms of online communication to interact with each other. Bulletin boards (BBS’s), ICQ, The Well and service providers like AOL and CompuServe were the predecessors of today’s thriving social networking websites Facebook and MySpace.

    From a historical standpoint, the origins of the Web are rooted in sharing and collaboration. And the centralized Internet communities of the 1980s and ’90s are now distributed and autonomous, super-connected and armed with blogs, mobile technology, video cameras and messaging tools like Twitter. Services like YouTube and Flickr are free, and annual “pro-accounts” cost less than a month of basic cable TV service.

    The conversations are no longer technical but instead have become product-oriented. An example of this involves the popular new smartphone, the Apple iPhone. A Google search on the term iPhone hack returns blog posts and You- Tube videos on how to extend the functionality of the device. Not only is this content not produced by Apple, it ranks on the first page of the Google search results.

    Indeed, the corporate website serves a different function than it did a decade ago. At first, marketers tried to force it into a one-way monologue designed to push messaging to consumers. The early corporate website was often no more than an electronic version of a company’s print materials. Now – as the iPhone example shows – this is simply not possible.

    But although firms cannot control the “conversation,” they can certainly develop content for it. Features like events, career opportunities, company photos, and product information and demos are not static components permanently bolted to the corporate website. They are instead hosted off-site using specialized Web services like SlideShare, Flickr, Blip.TV and Upcoming. com – services that are uniquely designed for the content they host. These content items behave more like mini-campaigns or social objects that customers can use to write about and share in forums, blogs and social networking profiles (Figure 1).

    FACTORS LEADING TO THE EMERGENCE OF THE SOCIAL WEB

    To fully examine the impact of the social Web on the corporate website, it’s important to identify several of the reasons why the social Web emerged.

    Wireless Internet and mobile. Internet access is now faster, less expensive and ubiquitous. Cities like San Francisco, Philadelphia, Houston, Atlanta and Boston have either already implemented municipal WiFi programs for providing free or low-cost wireless Internet access or have plans to do so. People no longer need to be tethered to their desktop computers or laptops in order to connect with someone online.

    Consumer electronics. Low-cost digital devices like camera phones capture audio, pictures and movies, allowing for instant communication of this media between friends as well as much wider audiences. The combination of Web services and mobile technology gives users the ability to broadcast and publish to the Web from any location. For example, the Nokia N95, when combined with Qik, a Web service for broadcasting video, gives users live video streaming capability right from their cell phones.

    Personal publishing. Personal publishing is either inexpensive or, in many cases, free, and blogging platforms like WordPress, Movable Type and Live Journal are easy to use. Some of these platforms allow their developer communities to develop plug-ins, useful components that increase the functionality of the products. Today, more than 70 million weblogs are being tracked by Technorati, a search engine for blogs, with more than 120,000 being created worldwide each day.

    Web services. Services like YouTube and Flickr are free to consumers; an annual “pro account” costs less than a month of basic cable TV. The range of available Web services includes tools for messaging, keeping to-do lists, managing projects and sharing bookmarks.

    Search. For many, search engines like Google are the primary interface for interacting with the Web. Search engine results pages return a variety of content, including business websites, news, social media sites and various file types (such as video and audio).

    STRATEGIES FOR MAKING YOUR WEBSITE MORE RELEVANT

    By employing the following five strategies, you can ensure that your website will become more relevant to your users.

    Promote disclosure and transparency. Networked markets have expectations. They want access to as much information as possible about a particular product or service. In many cases (particularly in ecommerce scenarios), the buyer and seller are geographically separated. For this reason, the buyer and seller hold unequal amounts of information. Disclosure statements are tools businesses can use to bring information asymmetry into balance.

    For example, PayPerPost, a company that connects content providers like bloggers with advertisers, caused a debate in the blogosphere about the need for disclosure. The company paid bloggers to write about products without requiring them to disclose that the post was paid for in the body of the post. A search for the company name in Google returns the following search results on the first page: “PayPerPost Offers to Sell Your Soul”; “The PayPerPost Virus Spreads”; and “PayPerPost tests your ethics, &Edelman’s fake blog for Wal-Mart.” This is significant because search engines like Google are providing a permanent digital reminder of the issue for anyone searching on the company name.

    Let the network spread your content. If no one knows about your products or services, they can’t buy them or tell their friends to buy them: this is the premise for content distribution in a connected marketplace. Syndication functionality built into widgets gives users the ability to spread content quickly and efficiently.

    Hugh Macleod, a marketing strategist for South African winemaker Stormhoek, has leveraged these tools to good effect. As the writer of the blog “Gaping Void: Cartoons Written on the Back of Business Cards,” he allows readers of his blog to copy the content for noncommercial purposes as long as they give attribution and don’t alter or otherwise transform the work. As a result, his tiny cartoons, often witty and humorous, are syndicated across hundreds or perhaps even thousands of blogs via a combination of widgets and Creative Commons licensing.

    Own your words – all of them. Whatever electronic content you develop, develop it as if it were going to be seen by the outside world – even videos, blog posts and Email that are intended for internal use only. If you don’t want to see a particular piece of content spreading out over the Web, don’t create it. And if it does spread, make sure you can stand behind your words.

    For example, one of Yahoo’s internal memos (to be seen by its executive team only) referred to the company’s waning resources as being “spreadable like peanut butter.” The document was later leaked to the Wall Street Journal, which republished the memo and ran an article entitled “The Peanut Butter Manifesto.”

    Employ microchunks and permalinks. Microchunking is the practice of cutting down digital media into usable pieces. Each piece has its own address (known as a permalink), which should contain relevant keywords indicating what the content is about.

    For example, late-night talk shows lend themselves to the practice of microchunking. The entire show is typically an hour long, including a monologue, some guest appearances and even a musical performance. Instead of distributing the entire hour-long episode as a complete video, the content owner could offer each segment as its own clip with its own address, plus an RSS feed so that all future segments could be automatically downloaded.

    Tear down the walled garden. The corporate website has evolved from a static brochure to a dynamic aggregator of both on- and off-site opinions. Instead of trying to keep visitors on site, the website directs visitors to relevant conversations in blogs, comments and social networking sites. Thus, marketers have evolved into the role of trusted advisors, behaving as custodians who actually send users to other sites that might interest them. The days of “opening a new window” are behind us.

    The computer manufacturer Dell is using its community of PC enthusiasts to influence how the company rolls out new product offerings. Dell Idea Storm is a Dell-sponsored website where users submit and vote on features like the ability to order machines without preinstalled software. The fact that Dell is now selling machines with the Linux operating system is being attributed to feedback that was first discussed on the community-run website.

    Know when to say you’re sorry. When faced with major public relations incidents – for example, a wide-scale product recall – companies often have no time to mobilize the traditional press release process. In such scenarios, a chasm is likely to emerge between corporate messaging and the reality of what’s happening in the market.

    Blogs provide an appropriate business communications tool for rapidly transmitting news and updates to the market. For starters, the architecture of blogs means that their content is microchunked automatically. New posts have permalinks, and posts are assembled into categories. Users can subscribe to feeds, and the comments section is designed to enable the website owner to interact with website visitors. In addition, blog posts are well suited for embedding content from off-site Web services like PowerPoint presentations and audio and video recordings.

    JetBlue, the discount airline, was forced to cancel all fights during a snowstorm in 2007. Faced with hundreds of unsatisfied customers and a major customer relations backlash, the airline’s CEO, David G. Neeleman, decided to use YouTube to deliver his message. The company was able to move quickly, posting the video within days of the first delayed flight. Mr. Neeleman issued an apology, outlined a short-term plan for corrective action and instituted a passenger bill of rights. The video was watched more than 300,000 times, and more than 300 comments were left.

    A Google video search for “youtube + jetblue” returns not only Neeleman’s “Our Promise to You” video but also a video from a delayed passenger documenting the three days it took for him to get home. Both the customer and JetBlue were using a common space even though they weren’t directly engaged in a dialogue (Figure 2).

    Don’t underestimate your audience. Customers no longer have to wait on hold for customer service. Instead, they can post their service issues on a blog, revealing potential weaknesses in a product or service. They can escalate an issue on their own, particularly when a customer-centric super node like Consumerist.com picks up on it.

    For example, in 2006 Vincent Ferrari, who at that time was an AOL customer, wanted to cancel his account with the Internet service provider. The AOL representative did his best to encourage Ferrari to keep the service, but Ferarri, dissatisfied with the experience, posted an MP3 of the conversation to his blog. The recording quickly spread, and many former AOL customers shared similar experiences attempting to cancel their AOL accounts in the comments section of the blog post. Ultimately, more than 1,000 comments were left. Ferrari was later interviewed about the experience on NBC News’ “Today.”

    CONCLUSION

    Given the external factors that helped shape the social Web, marketers are faced with new challenges when developing relevant messages and interacting with customers. Since customers and prospects alike are outfitted with innovative and inexpensive publishing tools today, many customers are finding themselves acting as “influencers,” with their recommendations and opinions capable of reaching thousands of people. By using the strategies for engagement outlined in this paper, we hope that the connected marketplace is brought into balance, and becomes more of an ecosystem that raises the level of customer service, encourages relevant messaging and results in better products.

    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.