B2C Marketing

Creative Brand Awareness Campaign for a Good Product

When an existing product is revived by a new use case – miracles happen! Tide-To-Go exemplifies a stellar product already – it cleans the spots when you need it – right at the moment when they happen.  The product has been in the market for approximately two years if not more (according to my own discovery of it in 2006). However, it is only now that its powerful benefit will be known to the masses!

The new campaign – “Silence the Stain” illustrates good quality, creative marketing. It surely brings the product benefits to life in a humorous yet persuasive manner: a dirty spot becomes so distractive as it almost comes to life.  Brilliant theme and consistent messaging of this campaign are the standards to adopt while practicing the power of marketing! Check the ads for yourself and see which one speaks to you. My favorite – is the job interview clip.

Silence the Stain – Job Interview

Or the the marriage proposal:

or the date:

next one is a stop by police:

Online Video Ads – What Are They? Types?

Online videos became standard in our everyday life. How many times a week does an average or avid internet user check YouTube or Hulu to listen to that new inspiring song or watch that episode of Simpsons? Perhaps, quite often and video ads become a hotter advertising vehicle. So what are different types of video ads that exist today that we can pick through?

Googling the term brought a very good article by Max Bloom from streamingmedia.com where he shares a glossary of video ads, which is very comprehensive and definitely is worth reciting or even placing on wikipedia for all of us to refer back to.

  • Companion ad – a banner ad that displays related content concurrently with a video ad” – companion ad are targeted based on the overall site content where the video unit is embedded. It can be priced as keyword targeted ad if it is targeted that way or opted in to the content network, thus CPC will serve as a unit price metric. Or it can be priced as placement targeted and charged per CPM.
  • Cursor  chase – ads that chase after the viewer’s cursor as it glides across the screen. These ads leap from a fixed ad and follow the viewer’s cursor arrow for a present duration and can be disabled by the viewer at any time.” – Cursor ads are good for branding as they immerse the user into play, thus creating an interactive brand experience.  Advertisers can measure its performance by assessing ad display and interaction time, chase time and number of closes.
  • “Expanding ad – expands in size and direction upon user interaction. ” Advertisers can offer more interactivity and information into this unit while also eliminating the “annoyance factor” since the user chooses to see more if he/she is engaged. Talking about the user control! One can track expanding ad interaction and display time, number of user expansions and contractions, interaction within the expanded portion, manual closes and conversions!
  • Floating ad – moves across the user’s screen or floats above the content.” Usually, they are good at grabbing attention with motion and copy impact. Creatives have flexibility while choosing size and shape of the ad. Audience interaction metrics include: clicks on floating ad and reminder, floating replays, reminder display and interaction time, manual floating and reminder closes.
  • Floating with in-page – when a floating ad is finished playing, it leaves behind a smaller floating ad. Viewers can replay the ad, interact, or click-through, even after the initial ad has played.” The benefits are the same as for the floating ad, plus the heightened audience recall provided by the in-page unit.
  • Free-form expanding – features multiple floating elements placed anywhere on the page that expand like an expanding when viewers interact with them. ” This type has the main benefit of the expanding ad – total user/viewer control.
  • In-page ads – appear on a web page, outside of the video player or window.” These ads are very familiar TV-style, full motion, full screen and sound adverts that appear in between the ‘white space’ of the web content.  One can measure ad display and interaction time and identify multiple exit links.
  • In-stream ads -pre-, mid-, or postroll videos that appear in the video player or window. In-stream banners (also known as tickers, bugs or overlays)- often transparent and appear on the top of the video in the player. Commonly appear in the lower third of the video window. ” In- stream advertising is the most expensive online ad format since it is shown to the captive audience that cannot click away from it unless it chooses not to view the requested content. At the same time, it is so much cheaper to produce in-stream online video ads than TV, thus it makes this format so enticing.  Regardless of no control issue from the viewer perspective, advertisers can still optimize in-stream ads through its rich media interactive options that are not existent in TV. Thus, click-throughs can be increased if advertisers create a dialog with the viewer through interactive features.
  • Interactive video - includes polls, games, or other interactive options in the video ad”. That what I meant in the item above!
  • “Interstitial - advertising placed in between the origin website and the destination website, either physically or in time.” They are quite as effective as banner ads when it comes to recall of the advertising message with click-throughs five times outperforming banners, but they are also twice as irritating! Talking about interruption marketing!
  • Locked floating – floating ad “locks” into place on the page and will not move as the user scrolls through the content. Keeps advertiser’s message visible throughout the page view.” The same benefits and audience interaction metrics as for floating, minus user control.
  • Peel down- reveals a glimpse of your ad in a corner of a webpage, which peels down upon user interaction.” This format stimulates the user to play with the content and can actually complement other ad formats for broader awareness and impact.  Advertisers can measure ad display and interaction time, number of peel-downs and closes, and ad interaction time within the peeled down area.
  • Player skin – ad graphics that surround a video screen.” Could be a great area to enhance your messaging if you think creatively.
  • Polite ad – large ad downloaded in smaller pieces to minimize the disruption of the content being viewed.” If all the formats were developed from the user experience perspective!
  • Pre-expanding – viewer first sees the ad in its “expanded” state, and then it retracts automatically to its standard size”.
  • Pushdown – expanding ad that “pushes down” rather than covers the content of the page when the ad expands.”
  • Roadblock – provides advertisers with complete share of ad space by synchronizing any number of display or rich media ads with the video creative.”
  • Self-initiated video ad – plays automatically on a page, or when rolled over by a mouse.”
  • Shadow ad – additional ad that shows directly below the video only when it is playing. “
  • “Tabbed expanding ad – presents a range of relevant information into a series of tabbed panels. Each panel can feature video, dynamic data or content. ” This type allows advertisers utilize best elements of their site into the creative, provides extensive space for messaging and interaction, and makes user/viewer experience controllable.
  • Teaser, or bumper – short video that appears before a full-length video or when a player loads.” These ads were very popular in early days due to its high click-through rates, but what was really going on – is viewers’ disappointment when clicking on seemingly unbranded clip and seeing an ad for some ordinary service of a well-known advertiser.  The surprise was not as pleasant as it seemed. Or, if you do plan to use it, make sure you follow up with the clues campaign and consistent punch line.
  • Telescoping – lets users learn more about a product by displaying a long-term version of the video ad at the user’s request. “
  • “Video ad curtain – gives the advertiser complete coverage of the player area with a rich media ad that expands while a video plays.”
  • Wallpaper ad – ad that changes the background of the page being viewed.”

Finally, the world of video ads made clear! Now, what would be more exciting is to look at the reporting advertisers get on the performance of those ads! Perhaps,  a topic for a next post!

Use Demographic Segmentation Tools Not Only For Marketing

People always fascinate me: different lifestyles, different backgrounds, different races and different behaviors. I never get tired of observing more and more about what drives them, what makes them engage in certain activities and what happens afterwards once “the pot gets stirred” skillfully by social trends or sometimes by actions of fellow-marketers.  Simultaneously, this entire process serves my own purpose as a consumer of the environment I want to be in. What I find myself doing is segmenting the “market” of a social event or a city to see what experiences I can have as a consumer of a social interaction. Perhaps, all of us do that. And yes, nothing beats the hands-on approach of going into the “field” and actually experiencing all the combinations in that or this zip code yourself.  But, as they say, being forearmed is half the victory.

So, while thinking about potential move to a bigger city like San Francisco, Chicago or New York (with all the benefits we already know), I find it useful to utilize PRIZM or other demographic segmentation tools to see the degree of how those cities can be attractive to me based on the social crowd.  And it might not be the news as we all have learned about the stereotypes, and some, are, granted valid in describing what to expect, I still believe it pays extra to dissect the population into more statistically accurate attributes. By doing this, you can predict the quality of your social life, professional success and other experiences based on the patterns discovered. As consumers, at least here in the states, we became very sophisticated and educated at what we want, like, dislike and how it should be served. Sometimes, this thought scares me when I feel like I have to look for niche-services already since I know what works well.  Sometimes, I wish I were as open as a child – when simpler choices were of existence.

Going back to the segmentation tools, as an example, I wanted to first validate the accuracy of experiences I had in Seattle and only then quick-check the potential Chicago can provide. I also wish that US. Census got more up-to-date and more detailed reports, as most of the information is based on 2000 reports – Hello?! It has been almost a decade and people moved, changed in proportion due to natural causes considerably since then.  Thank God, we have commercial software that can solve those problems and allow us see the light or to be precise the stripes on the map.  What if you do not have access to this information through those tools? Again, US Census or city-data.com site can provide you with rough but workable ideas on the demographics (alongside some extra ads).  Example, for Bellevue showcases graphs on gender distribution, age, income and housing situation and I must say it is very close to accurate even if the site uses 2000 census data and 2005 projections. 

But, what I found most exciting is the information on foreign-born residents (remember, one of the attributes of the social mix I was looking for?), it provides a neat chart as well! It describes the following distribution of nationalities (hence potential social interactions flavored by cultural attributes): 

  • Mexico (13%)
  • India (10%)
  • China, excluding Hong Kong and Taiwan (7%)
  • Vietnam (5%)
  • Korea (5%)
  • Russia (5%)
  • Ukraine (4%)

Information like that can provide me with insights on how diverse the locality is and will the mix be appealing to my social taste?

Digging deeper, there is always PRIZM, a tool that can share the details on lifestyle preferences.  According to the report on my zip code, the groups are: 44% New Beginnings, 22% Young Influentials, 21% Gray Power, 19% Home Sweet Home and 8 % Executive Suites.   If we take Young Influentials into consideration, the tools describes the segment as ” Midscale, Younger without Kids yuppies that reflect the fading glow of acquisitive yuppiedom.  Today, the segment is a common address for younger, middle-class singles and couples who are more preoccupied with balancing work and leisure pursuits. Having recently left college dorms, they now live in apartment complexes surrounded by ball fields, health clubs and casual-dining restaurants. ” It also goes into the details of: median income ($47,976), lifestyle traits (plays racquetball, drives mazda 3), demographics traits (suburban crowd, midscale income, age < 35, mostly renters without kids, college graduates, mix of ethnic groups). Very neat tool! You can definitely learn much about your audience! How about a Lifestage group? “Young, hip singles are the prime residents of Young Achievers, a lifestage group of twentysomethings who’ve recently settled in metro neighborhoods. Their incomes range from working-class to well-to-do, but most residents are still renting apartments in cities or close-in suburbs. These seven segments contain a high percentage of Asian singles, and there’s a decidedly progressive sensibility in their tastes as reflected in the group’s liberal politics, alternative music and lively nightlife. Mainstream Singles segments are twice as likely as the general population to include college students living in group quarters.”  Each segment shares this level of granularity. Now, knowing all that does make a difference while making a decision where to live, work and play!

Too much information? If all that is too overwhelming, you can always turn to wikipidea that will outlay lightly some of the basics!  

 
 

Targeting Methods in Online Advertising

Selecting the right audience is the key driving factor in online advertising – your marketing campaigns’ performance depends on it almost 90 percent. With numerous tracking systems for monitoring users behaviors online, their ways to interact, their purchase habits, there are a number of targeting variables available to modern marketers. What is a well-targeted advertising? It is more relevant, compelling and subtle. What are the tools we have these days? According to the Advertising Research Foundation in its latest publication titled as The Online Advertising Playbook , there 7 highly usable methods:

Demographic Targeting – the old and familiar approach that defines audiences by gender, age, occupation, household size. It will always be there due to its advantages for broader product categories. It is easy to project behavior for such products based on demographic information and it costs less than tracking individual purchase behavior. More on the tips for successful demographic targeting, read the article on iMedia Connection.

Contextual Targeting – implies placing ads on sites that are related in content to the products, as an example: diet programs ads show up on healthy living related sites, financial products ads are displayed on money and investment sites. Contextual placements catch shoppers at the time when they are thinking about the product or related to it issues, catch up on news or read up on tips.  Due to the fact that shoppers (potential and actual) are caught in the active state – it becomes quite important to select quality sites, with relevant and most popular content to make your campaigns perform.  Site credibility is also important for the product especially when sales occur offline. Thus, it is a key consideration for your branding efforts.  Also, if you are tasked with building a community around your product, having a group of high regarded sites extends your influence further with the already highly engaged audience.  More on the contextual targeting, check this blog post that cites the research study on its effectiveness.

Behavioral Targeting – is the hottest method these days and the most controversial, allows marketers to track users’ site “hopping” through the cookies and come up with models and behavioral patterns for targeting those users later on those sites. Advertisers use these models to serve ads that are relevant to those “mapped” individuals across the various sites. It could be cheaper to do behavioral targeting than a contextual one: you have more points to reach the same audience. At the same time, it has its pitfalls and Jack Jia covers them well in his recent article.

Geographic Targeting – is especially powerful for smaller businesses that would like to capitalize on the local searches for products and services. DMA areas, area codes, time zones, GPS coordinates and IP protocols provide some geo targeting capability and allow marketers maximize the reach.  In addition, it can always bring additional sales to the brick-and-mortar store if you send your shoppers to the nearest location to pick up the purchase. More on the ways you can leverage geo information, read this blog post by Charles Thrasher.

Daypart Targeting – comes back to online advertising from the more traditional media (TV, radio) where it reaches specific audiences. Daypart targeting varies by audience size and specifications, can be very cost-efficient – as you expose your message to the largest audiences at the right time when they want to hear, see, view your message. Internet is used differently throughout the day with the highest percentage of people shopping and surfing the web during the normal business hours at work! According to emarketer, 31% people shop online at work, and if you add more detailed data on at which hours exactly they heavily engage into it – you are in business!

Affinity Targeting – refers to reaching customers on their favorite sites (usually related to hobbies and interests) that they heavily visit and interact with. Those users spend more time online (on those sites), are more favorable to the site content and ads and purchase faster and easier. If you like one site that you visit daily, you are more open to digest the message in the ads and in fact act on it. Works every time.  Affinity targeting especially works for brand evangelism.

Purchase-Based Category Targeting – represents a new method of merging data from the online behavior database to the purchases. It is very efficient, but very costly since you do have to customize the databases for your specific markets.  Companies like Nielsen try to create profiles of the “heavy shaving cream users” and low-carb dinners buyers” and map it against their online surfing patterns and predict their next purchase across product categories.

With all those methods, marketers are indeed empowered to deliver the right message at the right time to the right audience, even when the data is not perfect. Select 2-3 methods that fit your business and marketing strategy and find the good enough fits for your audiences and you are bound to have success.

Online Lifestyles Are a Norm? Yes, They Are!

December is always a special month for me as it is a time when all the checks and balances occur, when all the moments of the year are revisited in memory again – relived, pondered upon and signed off as lessons and discoveries. It is also a time for predictions, wish lists and anticipation! So with the respect to my passion for marketing, I am contemplating on the passing year with a reflection on online lifestyles or call it digital lifestyles that became a norm. Little by little, our activities move online: online shopping, online banking, online dating, online networking, online socializing!

According to the Stanford University study on Internet Usage Report, published in internet stats, “the longer people have been web users the more hours and the more activities they report engaging in. While self-selection may be playing a role with early adopters, the data strongly suggests a model of social change with not only a growing number of Internet users, but with web users doing more and more things on the internet in the future.” Though, I am not sure about the number of respondents and who they were, since according to the chart -if you have been online for 5 years, your average usage hours per week can be close to 9. Well, I totally can see myself spending 30 hours per week, excluding business hours, though I discovered internet in 2000 only (yes, I know it is late, but try to keep me from it now!)

Paid search is getting on the top hot list and though it is not a new way to reach our customers, it is the most profitable and on the target! Why not to love it? You pay for actions, purchases or performance. Besides it is so interwoven into everyday’s consumer behavior – no wonder it works! If I think about all the new things I want to buy, learn and get to know – what do I do? – I go online and search. And if before I was only paying attention to unsponsored results, now if it comes to the specialized services in the area– I prefer paid links. My rationale comes from the following – those folks might be mature and sophisticated enough to advertise online, thus the service /or business they are in – is taken seriously. What did people do before search engines? Yellow pages…did work well then with the phones. Now, we want to do everything online – as the majority of us is there 24/7.

Peer reviews, consumer reviews and any bad experiences – I look for those as well before I buy. This brings us to the second nominee on the list – social networks where people interact and recommend stuff. Social networking became so everyday-vital – almost like email. And even though for online and “everything internet” skeptics it =(being online 24/7) might seem too over the board or a sign of no life (remember, second life – no life cartoon?) – Online lifestyle is a norm. On the contrary, the majority of people on social networks are the most extraverted –social folks that stay in touch with far more people at a time than one could imagine long time ago before internet. It is also a great opportunity for the introverted to express more, to share more and to be surrounded with the personalized attention without the overbearing voice of extraverts! And thus, with the increase of time we spend in our networks, with the ease we express our wishes, share the knowledge – we bring our lives online and plant very obvious patterns of our daily consumption. What are the greatest opportunities are those for online advertisers! They can cater to us personally – with all the data that has been collected about our daily habitual interactions.

Rich media would be the third favorite of mine – acquiring hearts, eyeballs and attention span of millions of people. Sharing videos, audio files and such became so easy and fun. You can become a TV star, a radio star and an international celebrity thanks to all the rich media capabilities internet offers.

With that, I wish you all Happy Holidays (be that Christmas, New Year, Kwanzaa, Hanukkah or Eid-al-Adha) and more fulfilling online experiences in your digital lives!

From In-Game Adverts (-ising) To Expanding Your Emotional Experience, Identity and Behavior

In-game advertising (a.k.a. IGA) is not new in the gaming industry. However, it still has its challenges and victories. It is considered to be a very effective channel as you as an advertiser are inserting your messages into the experiential process – “when the user is in the process of consuming the pleasurable experience of the game”, thus more predisposed to react positively to your communications. It goes without saying that you should avoid being too overt in your pitch to make your offer make a smooth transition into the consideration set of your user. The message needs to fit seamlessly into the experience to be acceptable by the users. This is the advantage of the channel. The challenges vary from the decisions being made on how to make the communication process “seamless’, how to get the best conversion rate and still keep the user loyal and very engaged in the game.

With the idea to brush up on the latest trends, I went onto my search in the latest articles on the topic, which led me to a number of even more amusing discoveries that I would like to capture and share.

To visualize the structure and evolution of in-game advertising, it helps to list the types of the adverts you can see in the games. According to the Wikipedia, there are 4 types of in-game advertising:
1. Static adverts (billboards, dashboards, static “banners”, and product placement) – that prominently display the message on the user’s dashboard. I call them “the pre-evolution stage ads.”
2. Dynamic adverts follow next -(tailored ads to the geographical location, time of the day and time-sensitive offers (a new movie launch as an example)) that advertising agencies produce outside the development process. Very effective feedback can be collected due to the ad-tracking analytics available that can be re-communicated to the development process to enhance the game design based on the user behavior. Mental note to research more on that!
3. Online communities (like Second Life and other virtual worlds and Massively Multiplayer Online Role-Playing Games ( MMORPGs)are able to display persistent online adverts, with advertisers acquiring the space and providing their brands consistent online presence in-game.
4. Incidental adverts” billboard-like advertisements or blatant product placement for the single purpose of creating a more realistic gaming environment”, which seems to be almost the advertisers “la-la land” – as the gamers request those ads. I wonder how rates differ for this type of ads and who is the decision-maker here – the game developer or the advertiser? What is the compromise dollar-wise and content-wise reached in the transaction?

It is worth mentioning Nick Yee’s extensive research for the past two years on the psychology of gaming. We all heard about the wonders of Second Life and Linden economy , but my immediate fascination includes his study on the emotions and experiences gamers have, how much time they spend on what, etc. In Yee’s research, known to the public as the Daedalus Project, he shares his findings on the psychology and sociology of MMORPGs, (Massively Multiplayer Online Role-Playing Games) that are based on the survey data from over 40,000 game players. Some of the interesting comments from the actual participants can be found on his site.

As an example, the most memorable experiences gamers live through include:

- First were the ones that have high achievement elements in the process of competition (usually in the battle) and collaboration.
Relationships and memorable interactions with another person came second (with acts of occasional kindness, romantic interest and evolving friendship).
– The third was the near-the-death- or death experiences. I can see why! Scary!
– There is a forth aspect as well, that is classified under miscellaneous that included role-playing out of boredom or the initial euphoria of the new game (“stepping into a new world”) , being surprised or taken aback and meeting the guilds.

What entertains me most – is how similar our in-game most memorable experiences with a real life (aside meeting the guilds); we all can see the common trend: we take pride in the challenges that competitive experiences provide; we engage in relationships and we do remember our surprises, scary moments and fun roles we manage to play. If you add the fact that a healthy life is when you take it as a playful game, then the borders merge even closer (both Einstein and Edison played games to give a break to their brilliant minds). Plus, childhood psychology and development scholars proved that play helps develop thinking capabilities. We human beings do need fun to be able to live fully engaging and long lives. I am not saying let’s all start playing video games, as play can be found in various activities. But, what keeps me thinking (all that research sowed more questions!)– What effect gaming activity can have on our minds, let’s get rid of the other role playing to make it simple. Do people who play video games develop more capabilities to expand their roles in real life? Are they more resistant to stress? Do they live longer? How does the behavior change in the process? Do we change our personalities? To the last question, Dr. Yee and his colleagues already wrote a paper that describes well this process, also called as the Proteus Effect (the effect of transformed self-representation on behavior). Here is the link to the respective research paper for your leisurely reading.

Other top three interesting findings suggest:

1. Many people have expanded their emotional range by exploring the many different roles (including gender identities) that MMORPGs allow a person to explore. See the research by clinical psychologist, Sherry Turkle.

2. Gamers spend a considerable amount of time (often a third of their total time investment) doing things that are directly-related to, but outside of, the game itself - which explains the popularity of virtual worlds and online extensions of the games. (from the Daedalus Project)
3.Many players report that the emotions they feel while playing an MMORPG are very strong, to the extent that 8.7% of male and 23.2% of female players in a statistical study have had an online wedding.” (from Nardi, Harris, Strangers and Friends)” Talking about the drama in games!

Talking about the relationship and loyalty they (the gamers) have with the game! The commitment in terms of time, money, emotional and creative energy represents abundant opportunities for loyalty programs, creative content generation throughout the gamers’ lifetime and extensive market research that is applicable to everyday outside the game-human behavior.

Loyalty – Is That What We All Are Striving For? Customer Loyalty is Equivalent To Successful Marriage

What is Customer Loyalty? It is a state of marketing nirvana that all of us are trying to get into, equivalent to a successful marriage where both parties are satisfied with their relations. Our customers develop an emotional bond with our product through a series of repeat purchases that are all positive experiences. All that is due to the fact that we marketers pay attention to every detail and preferences they state each time they come back. And we – evolve and change while catering towards those preferences.

Customer loyalty also implies some sort of solid comfort and knowledge (from the both parties) that at times of conflict or misunderstanding – their interests will get worked out, talked over and resolved. There is trust from both sides – the merchant will not disappear or refuse service and the customer will not run off like crazy to another provider without engaging into the conversation. Now, we are arriving at the true connection between loyalty and database marketing = two-way consistent communication.

Developing the bond between you and your customers is all what the database marketing is about. Loyal customers are more valuable for your business than average because they:
- Have higher retention rates
– Have higher spending rates
– Have higher referral rates
– Higher lifetime value
– Are less expensive to serve
– Buy higher priced options

So which rate listed is more important that others? Of course, the retention rate – once your customers are gone, they are gone and it does not matter how frequently they purchased or how much they have spent.

So what can you do as a database marketer to keep them? – Use the information and data you have and personalize your services accordingly in real time. The industry has a myriad of success stories that illustrate the best known principles of database marketing. One example would be an article by the Chief Marketer’s writer, Bryan Pearson where he views and describes a successful customer loyalty strategy as a dynamic ecosystem. Which makes sense, as the idea is to surround your customers with as many touch points for service/product consumption and positive interaction. We, humans are “hungry for more resources” social beings and respond well to such environments where all our needs are constantly catered in one place at the right time by the same provider as long as the quality and variety aspects are in line with our expectations. And if you add the consistency of touch point interactions – you lock us pretty in a dreamworld of instant gratification that is prolonged!

The top three strategies that are shared in the article include:
1. Understanding your segments, where “extensive market tests definitively prove that customizing content and messages to focus on relevant products and solutions drives dramatically higher response rates and increases the profitability of direct communications to this segment. This model of testing and analysis has demonstrated real-world success in using customer transactions to predict purchase behavior.” Thus, you are able to collect those preferences, track the changes in consumer behavior and predict future purchases for similar customers.
2. Segmenting ahead of the curve, implies taking this analysis a notch up and predicting the future behavior for your customers before they realize that they have new preferences based on marginal deviations from the norm. You can track the info back to some specific event and tailor your communications to test the probability.
3. Enhancing the customer environment, goes without saying into the equation as it manifests your response to the transactional data you receive/the feedback in other words. You make their repeat purchases even more pleasant, more relevant – thus polishing the emotional connection.

All in all, it appears that paying attention pays off in the business world and the laws of evolution are attributable to a successful marketplace. Add an agile human intellect and action in between, and you are likely to follow the lifecycle of a civilization – growing your business. Isn’t it what we – marketers are here for?

The Future of E-Commerce According to the Experts

Day One of the Online Market World Conference was opened up with a starter session that covered the upcoming trends in the e-commerce industry. I thought it was rather “short and sweet” in content and delivered a good overview that is worth sharing. According to Joe Chung (Allurent), Doug Mack (Adobe) and Michael Hines (Jones Apparel Group) there are a number of trends in the evolving e-business:

1) Rich media meets rich applications - the user experience becomes very engaging, interactive and “seamless” thanks to the latest and greatest in the web development apps that leverage the graphic user interface. Examples include Gucci watch and Teamwork Athletic Apparel sites that bring authentic interactive brand experiences right at your computer.
2) Increasing community involvement - plays a major role in creating relationships, brand recognition and promotion from the mere transactions. If they (transactions) were good, easy experiences – they become stories that people pass along and eventually translate into more revenue.
3) Back to the desktop - lots of $$ is invested into the desktop shopping platforms, “browser-free” online shopping – imagine that!
4) Content as the Interface - plays a great role in the new way e-commerce sites get content and “inventory” – see Zillow’s site where users can post their house info (pictures, videos, etc) on sale in 60 seconds and watch the bids come.
5) Online shopping to be successful must be: enticing + engaging + executional + pervasive + mobile.

It is interesting to see how the same principles and concepts are applied throughout various industries and disciplines: I see the basics of the social media concepts, user experience design, permission marketing, branding and CRM – all work in tandem to accomplish a simple goal. You hear all the time the same fundamentals: ease of use, emotion, relevance, experience, engagement = all in various combinations bring you to success, as they are the same needs expressed by the sophisticated consumer, online shopper, primarily the US-based individual. As Joe Chung says, “extensive increases in the software development are very well offset by increasing customer expectations”, – so viva the online shopper – as there will always be plenty of work for all of us in web applications and services development as well as online marketing!

Top Five Ads That Deliver the Message and Entertain Greatly

The key to a good ad is to reach the right audience at the right medium at the right time and deliver the right message with an emotional impact. Entertainment is omnipotent element of advertising that makes it a joy to produce it. Here are the top five favs that I am noticing these days:

1) Career Builder presents a common feeling that office folks experience these days in the corporate America, the ad speaks to the point, makes you laugh and connects to audience’s experience. I think – it is money well spent.

2) Cadbery creates a fun suspense with an always working gorrilla image! Who does not relate to those creatures? We all do. Remember the last time you visited the ZOO and its apes’ section – You always watch them closely, they watch you and the more you watch – the more you see your own reflection! I do. Loved this passionate drummer.

3) Herbal Essence skillfully involves reality and paradox in a fun enjoyable twist.

4) Jack Links Jerky’s campaign “Messing with the Sasquatch” deserves a place in the best ad humor panel. Some of the epizods are a bit crude, some are irresistably funny. My favorite is the one with the fire: loved the stone – it made a Sasquatch a here in my eyes!

5) Geico Caveman pieces are also the best. Always, hits the spot.

Measure Your Marketing with These Handy Metrics

Measuring your marketing expenditures and re-evaluating what you have accomplished can be rather daunting and rewarding at the same time. But the most crucial benefit is how your actions are to be affected based on your findings. It is not the news that measuring your actions is followed by better decisions, however it is so common that most of us (marketers) are mostly 99% focused on just launching our campaigns, accomplishing the laundry lists of the pre-planned roadmap and creating new one before we can catch a breath and take a minute to look back. Metrics can help us maximize our effectiveness and identify our strengths and weaknesses on both strategy and execution. And of course, there are no perfect models to assess our actions. However, when I was reviewing my recent readings on marketing metrics by Paul W. Farris et al, I chose the following top eighteen (because ten is not enough) to adopt into the arsenal.

From the category of shares (hearts, minds and markets)
Loyalty – measures future revenue streams. Usually, includes a combination of share of requirements (a.k.a share of wallet, a given brand’s share of purchases in its category), willingness to pay premium, willingness to search.
Top of Mind – I love this one = The 1st brand that comes into a customer’s mind when he or she is asked about a category. The percentage of the customers who the given brand came out on top can be measured.
Willingness to Search - implies the likelihood that customers will settle for a second-choice product if their first choice is not available. ( I know I do that for my dining experiences).
Willingness to Recommend – includes a percentage of customers surveyed, who indicated that they will recommend a brand to their friends.
Sole Usage Percentage – measures the proportion of a brand’s customers who use only the given brand’s products and do not buy from the competitors in relation to total brand customers.

From the category of margins and profits
Marketing Spending – includes total expenditure on marketing activities (advertising and non-price related promotions, can include sales spending). Very useful metric. It is advised to have 2 formulas for it: fixed and variable marketing spending. Fixed marketing spending includes sales force salaries and support, major advertising campaigns, marketing staff (our salaries!), sales promotion materials and cooperative advertising allowances. Variable marketing costs comprise of sales commissions, sales bonuses, bill -backs for local campaigns, rebates, early payment terms expenses. To calculate the latter, you should use your revenue number multiplied by the percentage of variable selling cost. Total marketing costs is a basic sum of both.

From the category of product and portfolio management
Brand Equity Metrics – helps to monitor health of the brand. This is the hardest metric and has a number of models, true moneymaker for the agencies and consultants. Interbrand and Young & Rubicam are the leaders in evaluating brand monetary values. The Y&R evaluates a given brand based on the perceived differentiation on the market, relevance to consumer lifestyles, the esteem the consumers hold due to the brand and the perceived knowledge about the brand those consumers possess. Strong brands show higher degrees across all four values. Growing brands illustrate high levels of differentiation and relevance. Declining brands show relatively higher degrees of esteem and knowledge. Personally, I like the Brand Equity Methodology (a.k.a Moran), that calculates brand equity based on the multiplication of effective market share, relative price and loyalty index. Loyalty index can be calculated by a percentage of brand customers that will repurchase the brand in the next year.

From the category of customer profitability
Customer Lifetime Value considers the present value of the future cash flows attributed to the customer relationship, allows to budget acquisition and retention initiatives. Very useful metric for contractual customer relationships, where you have a projected timeline, average usage/purchase number, price, retention and frequency values. If margins and retention rates are constant, you can calculate the CLV as follows: multiply margin into the retention rate divided by a difference of (1+ discount rate) and retention rate. Valuable metric to identify the limit on acquisition spending.
Acquisition vs. Retention Spending -the former represents the average cost to acquire a customer and is the total acquisition spending divided by the number of new customers. The latter illustrates the cost of retaining a customer (your retention spending and number of the “saved” customers).

From the category of sales force and channel management
Direct Product Profitability includes the adjusted gross margin of products, less direct product costs.

From the category of the pricing strategy
Price Premium implies the percentage by which the price of a brand exceeds a benchmark price.
Reservation Price means the maximum amount an individual is willing to pay for a product. It is a key metric to predict the demand for your product.

From the category of promotion
Average Deal Depth – comprises of sales via coupons divided by total sales. Quick and easy metric to see brand dependence on promotional efforts.

From the category of advertising media and web metrics
Cost per Thousand Impressions (CPM) Rates is our standard advertising basics- is calculated as cost of advertising divided by impressions generated. My only concern and eternal question – how much is the noise or extra in the total impressions number and how much is the actual working range?
Share of Voice quantifies the advertising presence of a brand, in relation to total advertising in a given market. Helps to evaluate the strength of the advertising program.
Visitors – implies the number of unique web site viewers in a given period. I still trust only this web metric, love it for its ability to measure the reach of the website, identify its loyal visitors and content effectiveness during the time you were testing your messaging.

From the category of marketing and finance
Return on Marketing Investment is different from the common return on investment due to the fact that we take a risk and expense our initiatives in the current period. The formula suggested: (incremental revenue attributed to marketing multiplied by contribution % minus marketing spending) divided by marketing spending. In other words, you have to attempt to identify the revenue piece you brought divided by total invested marketing resources.
Project Metrics: Payback, NPV, IRR are our favorites from the finance departments. I mostly prefer the payback and NPV as applicable models to justify your spending.

To sum it up, various measuring models might evolve over time: some will be rejected, some will be re-established, and some will be invented. However, the more you are aware of various metrics, the better you are in your decision-making process, the more accuracy and tangible benefit you will receive for your marketing programs. It is just a challenge at times not to forget to apply them. However, imagine the benefits of testing various metrics and seeing through practice what makes sense and what does not?

P.S. Forrester Research folks have recently posted a video on marketing metrics. There are more metrics discussed outside the above list, like customer advocacy related to customer-centric marketing. Check it out for your listening pleasure yourself!

Top Ten Interactive Marketing Trends Observed Throughout 2007

I have been thinking about the top ten interactive marketing trends that I can name on the top of my head that are still pursued by the fellow marketers. I came up with a list of those that was not as surprising as I wanted it to be. At the same time, it reminded me how long marketing as a profession has been around. Reading and tracking various industry publications (Brandweek, AdAge and NYT) as well as googling the term “Interactive marketing trends 2007” for value-add opinions in the top marketing blogs, brought me to the following top ten list:

1. Advergaming
2. Online video
3. Consumer generated media
4. Social networking
5. Mobile social networking
6. Interactive TV
7. Relationship marketing
8. Evangelism marketing, or word-of-mouth marketing
9. Paid search marketing
10. Community-powered search

Regardless of the research executed on the topic, this list does represent somewhat subjective professional judgment. Simultaneously, the top ten list is not necessarily prioritized by significance of the item.

Advergaming has been on the market for two years and according to Zodiac Interactive’s EVP-Sales & Marketing Rick Howe noted, “Advergames are compelling, sponsored interactive content that enables leading brands to attract large, targeted audiences and effectively promote their brands across multiple platforms. Custom branded Advergames and contextual in-game advertising are considered to be one of the most effective and stickiest vehicles to engage consumers in deeply engaging online experiences. Similar to product placements or ad placements in movies, in-game advertising is subtly placed throughout the gaming experience in a form of banner ads or fictional placements to make a game more real. It is almost surreal to live without advertising! Internet games are filled with products like Cheetos, Mountain Dew and Laffy Taffy. Advertisers know that tomorrow’s consumers are today’s children and they utilize this knowledge in shaping brand loyalties like gardeners growing an orchard.

Online video is very popular these days thanks to its captivating effect as a medium and a number of easy-to-use online applications that fully support its production, sharing and editing. YouTube, Jib Jab and the rest became so common that everyone knows how to use those and does it on regular basis. Online accessibility provides for wide consumer coverage and the interactive video effect allows for better envisioning for potential customers how the product can be used and what the actual benefits are. One of the best examples would be the animation effect in email marketing that a chocolate provider used. According to Amy Johannes from Chief Marketer, the marketer was able to boost its sales by 49% by utilizing animated images in the promotional emails. They also ran a Valentine’s Day promo. “Clickthroughs on an animated e-mail were 203% higher than those showing just a static picture, the study found.” Consumers are used to rich media applications and they expect messages directed at them to be animated, interactive or some sort of participatory.
Finally, it is almost a fact that every strong marketing team is able to produce or to induce the production by customers of humorous online ads and distribute them virally through social media channels, where YouTube is one of the players. According to the eMarketer article on Online Video: Seeing the Whole Picture, “it projects that the number of online video viewers in the US alone will rise from 114 million in 2006 to 183 million in 2011. “
As B2B April article states the point of view of Matt Ross, president of McCann Worldgroup San Francisco,” Entertainment engages, and entertainment sells. People will grant you a tremendous amount of time if you make it rewarding and worthwhile.”

Consumer generated media, or in other terms user-generated content was a very loud marketing term in 2006. Everyone in the marketing community was thrilled at the opportunities and effects it provided. According to Jeffe Juice, one of the marketing bloggers, “Everyone from Doritos to Mentos, MasterCard to Panasonic, Chevy to Oreos, offered user generated content programmes. And not without good reason. Consumers really responded. The UGC programme that Renegade created for Panasonic was great for engaging the action sports community. Mentos’s effort to ride the wave of consumer interest in watching Coke bottle geysers has created a corresponding explosion in sales (up 17% over the previous year). Looking ahead, however, marketers will need to raise the stakes if they hope to get consumers involved in such campaigns. One way will be to offer cash (or other incentives), not just for the winners as Doritos is doing, but for all UGC that other consumers end up watching. This “pay for play” approach is certainly gaining traction with the emergence of Current TV (which is paying for ads) and Revver.com (which is paying for content). Creative consumers will undoubtedly follow the money.” These days every third American has a blog, or knows how to produce a video and get paid for it. A lot of small businesses and specialty agents started using YouTube channels and blogs for self-promotion and business development due to the interactive intimate touch this medium provides.

Social networking showed its popularity especially with the techies (early adopters) and the young teenage audience that grasps every new online tool at the speed of light. At present one can see the movement goes mobile, when social networking sites get support through mobile applications. “I do not use email any longer; just use Twitter that is incorporated on my Facebook page.” says Jeremiah Owyang, one of the online top web strategy bloggers. eMarketer digested the research on attention measure in social network sites done by Complete and suggested that “the top six social networks all saw increased attention, and the top 20 social networks received over 15% of all attention in June. MySpace consumes an outsized share of Internet user time overall.” There is a potential for marketers to engage the audience and utilize this attention on those sites.
The UK is similar enough in Web usage that it can serve as a directional guide to Internet behavior in the US. In the study, 68% of UK social networkers said they had visited another Web site after seeing something on a friend’s social network page. Just under half used a search engine to learn more and 35% had forwarded the space, ad or link to a friend. Behavior targeted advertising is believed to be a solution for richer engagement of this audience towards products and services that their friends are using or referring to.

Mobile social networking provides a great opportunity for location-based marketing. According to eMarketer and Juniper Research’s “Mobile User-Generated Content: Social Networking, Dating and Personal Content Delivery” report, “Mobile end-user generated revenues worldwide from social networking, dating and personal content delivery services will increase to more than $5.7 billion in 2012 from $572 million in 2007.” Mobile phones become the main means of online access and communication. There is a great potential for integration of location-based marketing and mobile social networking to make it for a rich customer experience. Imagine with what ease decisions could be made by consumers when they socialize and get instant notifications from the social networks sites and simultaneously they are presented with the service/product offerings that can continue the social experience. The best example would be someone who just arrived to a new city and gets a notification from a friend to meet in an hour for a dinner in a certain area. Simultaneously, a listing of context-driven places is displayed to allow the parties agree fast on where to meet. The whole interaction can take 5 minutes, which usually might have taken 20 provided that one of the parties was familiar with the location or was thinking about it in advance.

Interactive TV proves to be much more effective than ads, as the level of audience engagement brings significant results. The audience interacts with the content displayed and gets engaged into purchasing decision-making process. According to the May article in Television Week “DirecTV Hawkeyes Interactive Spots”, “viewers are responding to interactive ads about 11 percent of the time, exponentially higher than the response rate for Internet ads.”

Its effectiveness might be due to the multitasking behavior that expands in all levels of an average user. The most recent example is Nike’s interactive campaign, “Quick Is Deadly” for its Zoom training-shoe line. “It would include more than 20 minutes of interactive content accessible to Dish Network subscribers with DVRs.” This is about 30% of the network’s 13 million subscribers — will be able to click into 30- and 60-second TV spots starring San Diego Chargers running back LaDanian Tomlinson and other fleet-footed Nike athletes. Nike gives them the option to view interview footage of the football star discussing his exhaustive training regimen. The footage of Mr. Tomlinson’s signature spin move in different speeds. The Nike-branded game designed to test viewers’ remote-control reflexes and a three-dimensional demo of the Zoom shoe. Using ZIP-code information in each Dish unit, users will also be able to find stores carrying the shoe at the click of a button. The campaign does not give users the option of buying the shoe from their set, although the technology does enable that function.”

Relationship marketing has it origin from direct marketing and is evidenced to be relevant in the current environment where consumers became sophisticated enough to demand personalized service tailed to the individual needs. Customers today are demanding more in their expectations of how they are serviced and the levels of service they receive. More often than not, a level playing field between many businesses today means the only real differentiation and competitive advantage we can develop and sustain will be the relationships we forge with our customers. Obviously, the more personalized the catering, the more engagement marketers would receive from their customers. Amazon, as one of the leaders in the transparent customization process, illustrates the benefits that relationship marketing can bring in order to retain its existing customers and acquire the new ones. As an online retailer, its audience and markets is very broad and diverse. It is segmented by geo regions, however its demographics is not clearly defined due to the scope of retail industry. However, the total online shopping market comprises over 26 billion people. Clearly, Amazon utilizes behavioristic approach to segmentation, using database marketing. Its acquisition strategy starts with Level 1 (mass marketing), it is not discriminated but slightly targeted based on searching, browsing space and search words, which is an appropriate acquisition strategy for an online retailer. Amazon’s marketing programs follow the pattern of customer differentiation process matrix in its communications and benefits to the users. It comprises of 4 levels:

Level 1: Beginner (Free Super Saver)
Level 2: Purchase patterns captured (Buy 4, Get 1 Free)
Level 3: Heavy user, hooked (Amazon Prime)
Level 4: Heavy user is rewarded by savings (Amazon Visa Card)
Obviously, Amazon’s strategy is reflected through its marketing programs where it moves along the entire quadrant in the full new user transfer into customer circle, while utilizing its mass customization capability that is transparent to the end user. From the standpoint of current customers, most of its programs imply the development of 1:1 marketing, while upgrading services and offering for the loyal customers.

Evangelism marketing or word-of-mouth marketing keeps its relevance in the marketers’ tool kit. Word-of-mouth marketing often targets influencers — people who are passionate about a product category, and who are perceived as credible sources. The theory is that reaching more influencers increases the odds that they will spread the message. The interactivity piece comes into play in the ability of those individuals to build credibility and relationship easily due to expertise or their own investment into the service/product they promote. There is also some sort of role-modeling that those individuals exercise that allows for effective promotion. According to the Bridge Ratings/University of Massachusetts study published in August 2007, getting just about anybody else besides advertisers to convey the message would seem to be more effective. The study also revealed that 93% of respondents said they were moved to take some sort of action by WOM influence. eMarketer estimates that 20% of US adults will be WOM influencers in 2011, up from 17.5% in 2007. Web sites, blogs and other technology are making it easier to spread the word on a favorite topic.


Paid search marketing
is continuously growing according to David Wigder from the FutureLab, Marketing Strategy and Innovation Blog, as a core tool for online marketers. There are several reasons for search’s continued dominance as an interactive online activity. Search allows marketers to:

1) Engage consumers as they actively seek information in market, thus providing them with relevant content during the selection process of the buying behavior when they need it.

2) Connect consumers with relevant content based on self-identified interests.

3) Pay only when consumers click on a sponsored link, no waste in marketing expenditures.

4) Scale spend in the channel (to a point).

5) Enhance the productivity of other channels, while integrating other communication channels.

It is almost a fact of life that prospective buyers receive information from a variety of channels and do engage into online search before they purchase. Paid search provides for easy-access, relevant information based on the messages communicated through TV, radio, print and word of mouth.

Community-powered search finds its relevance in interactive marketing when “consumers are hungry for relevant content, but prefer to trust their peers, friends or expert community. More relevant consumer experience is of value that community-powered search engines provide. Customized search engines such as Eurekster Swicki, Rollyo and Yahoo Search Builder are likely to become more popular as search results are informed by the collective experience of the community.”

In retrospective, there has to be something else, something new in the marketing tool box that is not there yet publicly known. My gut feeling and overall assessment says that all the top ten “trendy” things already reached the masses or to be precise the mature crowd. The early adopters are up to something new and hopefully I am about to run into that in the near future.

Three Useful Models for Web Copywriting

Three Useful Models for Web Copywriting

Writing a web copy? It has been a while since you did any highly visible writing? Or do you simply wish to refresh your copywriting skills and use those for quality check review of your contracted writers? Maria Veloso, a 27-year expert in copywriting and direct marketing, shares her experience in the book “Web Copy That Sells”- a highly recommended reference that is worth taking a place in your marketing library. Here are three useful models to shape up and sharpen the web writing skills:

I. Conceptual Web Copy Blueprint
II. Five Guidelines to Make Your Copy Sell
III. Priceless Techniques to Use While Constructing Web Copy

So, you have a vision for your site and you think that you have the content necessary to deploy for the copy. Well, the truth is that your content is not your web copy. All the information that you compiled while talking to various groups within your company is just information. You still have a job to translate it into a “sellable” web copy – a copy that delivers – empathizes with your customers, persuades them and generates sales. Thus, the initial step for you as a writer would be to step into the shoes of your audience and get their perspective on the user experience that they would have while visiting your site. What would they do and what path would you lead them to? The five key questions to answer while going through this exercise is:

1. What is the Problem?
(Diagnose the problem or pain point for your audience. Sometimes, they do not even know that they have a problem – educate them.)
2. Why Hasn’t the Problem Been Solved?
(Check the history of the solutions that failed or succeeded).
3. What is Possible?
(Use “possibility thinking” and paint a picture for your audience of what is possible for them to do and enjoy while the problem is solved (by your service/product.))
4. What is Different Now?
(Explain how your product can help them and what is different about it.)
5. What Should I Do Now?
(State clearly what you want your prospects to do.)

This is your conceptual blueprint!
What do you do to make your copy live and actionable? Sprinkle your blueprint with the basic design and psychology guidelines:

1. Inject Emotion
2. Add Bullet Points, Bonuses, Guarantee and Close
3. Add Credibility-Building Elements
4. Add Psychological Devices
5. Replace Rational Words with Emotional

This is your five guidelines to follow while writing the copy!

What are the priceless techniques to keep for reference in the process of writing the copy?

• Use AIDA Principle (Capture audience’s attention, get its interest, build desire and induce action).
• State The Unique Selling Proposition (competitive advantage of your product).
• Make the Impression in the First Paragraph
• Write the Offer You Cannot Refuse
• Use Testimonials: “It Can Happen to You”
• Use Your Headline to Sell
• Introduce the Price Through (Daily-Cost Technique and Minor-Purchase Technique)
• Keep On Selling: Craft The Order Form Thoroughly
• Infuse Your Copy with a Money-Back Guarantee: Make a Deal
• Plan the Close For Potential Sale
– Provide a Free Gift
– Use a Time Limit Offer Technique
– Use a Limited Supply Technique
• Spell Out Your Call To Action
• Use an Opt-In Mechanism
• Use Attention-Grabbing Words
• Avoid Jargon and Corporate Speak
• Use Multiple Pricing/Benefits Offers

This is a good checklist to have while crafting the copy.

Another good source of short articles on effective web copy is available at excess voice site.
The third source for web copy intelligence that I would recommend to subscribe to for weekly updates – is Brian Clark’ blog – Copyblogger.

What are your best sources, tips and examples of effective copywriting?

My Lifetime Value (LTV) as a Customer for Amazon


 

Last three weeks of the MBA…cannot wait till I am done and ready to pursue my next adventures! However, I promised to share my recent learning on calculation of lifetime value in the database marketing class. My individual project required the calculation of my LTV to a service I have an extended relationship with. Amazon was my choice.

Relationship and Frequency Data:
– Length of active relationship = 9 months
– Average purchase over 6 months is $ 36.57
– Average frequency: 1.5 per month
– Average order: 3 books
– 99% of orders are books

Assumptions:
– Acquisition costs = $ 25
– Variable costs = 18 %
– Retention rates: 95.9% for first 6 months, 97% for the next 6 months, 98% for the next 24

There are 4 levels of customer engagement:

Level 1: Beginner (Free Super Saver)
Level 2: Purchase Patterns Captured (Buy 4, Get 1 Free)
Level 3: Heavy User, Hooked (Amazon Prime)
Level 4: Heavy User is Rewarded by Savings (Amazon Visa Card)

Each level of marketing programs reinforces continuous purchasing behavior, increases frequency and average purchase value that are paramount for increasing overall LTV.

Presently, I am a consumer on Level 3, as Amazon Prime Buyer. With the assumption of 3 years as my projected life experience with Amazon, the LTV amounts to $634. My switching costs are quite significant at this point and comprise of $79 of annual fee, ease of use, loss of automated purchase process, brand equity, security and trust that the service of the competitor might or might not be delivered.

As far as the effectiveness of this program, it did increase my frequency by eliminating time and quantity restrictions. I purchase twice as much on demand, increasing my total spending by 50 %. Simultaneously, it ensures committed 11-12 orders per year based on the annual fee that is a pre-paid shipping expense, thus increasing overall probability of purchase.

Retrospectively, I made a smooth transition from the prior 2 levels:

- Level 1 (Free Super Savor) made me buy in triplets manner which drove consistent purchase order to be roughly $28. At this stage, my LTV amounted to $348 over 3 year period.
– Level 2 (Buy 3 Get 1 Free) made me buy more books, increasing the level of frequency and ensuring that average order always amounts to $ 49. At that stage, my LTV was $ 507.
– Level 3 (Amazon Prime) increased my LTV to $ 634.
– Level 4 implies getting Amazon credit card. This could be a significant step transferring a heavy user, like me into a lifelong customer, however, the one time savings of $30 and the hassle of having another credit card is not enticing enough.

 


The 4 level approach works well while acquiring new users and transferring them into heavy users and ultimately into loyal customers.

Frequency of purchase, volume and average purchase value play a major role while affecting LTV, thus the following initiatives are advisable to expand into:

- Cross-selling is optimal to generate higher frequencies of purchase. Bundle packaging and offerings could be considered as alternative offerings based on the search data.
– Branding initiatives could help to seed awareness and repeat the message that online you can find it at Amazon: all the goods, ranked, recommended, traded – already pursuing community engagement
– Utilizing referral campaigns to potentially eliminate acquisition costs and carry the branding message (though the latter are quite low)
– Developing an alternative to the level 4 program (Amazon credit card), perhaps just a points card for customers that are not responsive to getting another credit card. It can still provide the same data, but alleviate the commitment factor implied in the financial decision of signing up for a credit card.
– Not sure how I missed it, but Amazon does a good job utilizing social media and web widgets to generate more interaction and customer involvement. Brian Oberkirsh has a great post on it here. I wish the design and usability of Amazon could be better and user friendly..too busy and too much going on for me when I sign up.

P.S. Just ran into a good chart on Bnet brought by iProspect on the Purchasing Power of Web Sites. Clearly, Amazon tops the score. (Added on May 15, 2007)
Purchasing Power of Web Sites (IProspect)

Missed Oscar’s Night Ads? Catch up with the NYT Article

I am catching up on the Oscar night, watching E!, doing research and simply catching up on the Google Reader that simply serves a role of a TiVo for me. No matter if I got busy with the offline = real life, I can always catch stuff later. The most enjoyable item was the article from NYT on the ads shown on Oscar’s night. Go and feed your great ads cravings, especially when the presentation is so appropriate, in Oscar’s style! And of course, cannot get enough of Fergie’s song! Turn it on every morning to start a day with a smile!

Ads that Make a Difference

With the whole Super Bowl fever, which is a greatest time to see all the good work of advertisers, I went to old videos and some of them were funny, some were histerical, and some were truly thought – provoking and awakening. One of those was “Children see. Children do.” Very true, even though I do not have my own kids yet, it made me pause and think. All of us do not choose our parents, but we can choose what kind of parents we can be for our children. Seeing this type of ad is a good exercise to be able to understand other people around us.

  • RFID and Creative Marketing

    Wow, now we are talking about great marketing.  Using RFID, Mini Couper marketers talk to Mini Couper drivers and deliver customized messages. See the whole article by NYT. Can you imagine the first reaction of a driver that has not read this article or somehow forgot to remember what he/she signed on for? Creepy feeling of talking objects! Actually, I see the privacy issue come up, but it is nice to get personalized service from your favorite brands, talking to you, checking in with you and reinforcing your loyalty. Interesting aspect of interactive brand “romancing”.

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