Another big brand is jumping in the Free is good for our marketing syndrome. Time Warner (TWX) just announced yesterday that AOL will offer its e-mail and web services for free. The goal is to move heavily to a pure advertising revenue and stop the subscribers churn: they’ve been loosing 30% of their 26.7 million U.S. customers from Sept 2002, now down to 18.6 million. AOL expects to save more than $1B in marketing costs by the end of 2007 in doing so, placing their bet on the recent surge of advertising revenue – 40% up in one year to $449M. AOL is also risking its dial-up subscribers business, representing 80% of their income, which was $2B in the last quarter alone.
What are they doing to retain these customers?
Given the impressive churn rate AOL is suffering, I asked myself if AOL was not getting Dell’d as well. Not to mention of course that dial-up Internet access is not geared to expand in the future but they offer high-speed access.
Well, you know me by now, me writing this post is a strong indication that the answer is probably close to a YES. Here is an interesting experience of Vinny trying to cancel his AOL dial-up account. Do yourself a favor and have a good smile on your face, listen to Vinny’s recorded phone conversation with the AOL representative when trying to cancel. It is just amazing. The Consumerist then posted the apparently real AOL retention manual, a strong indication that what Vinnie recorded is not at all isolated. And of course bloggers started to buzz about it.
What is AOL answer to this negative buzz: FREE. We will give you more for free so you don’t go away or even better, you’ll subscribe to AOL as your boradband ISP.
Once the Internet king and now stumbling, AOL is to me a very good candidate to get Dell’d. I’d be curious to read about your Get Dell’d brand candidate list and stories about it. Feel free to post it here.
Fellow marketers this is serious news. We need to react strongly and bring back CEOs and their staff confidence in marketing – especially in marketing 2.0- up again. According to Blackfriars recent announcement, US Companies did spend 54% less in Q1 than budgeted. Their Q1 index was the lowest in two years and the spending categories reflect traditional marketing mindset. What strikes me again is that on-line marketing spend totals 26% of all marketing spend, and uses mainly Internet advertising (nearly 58%). PR suffers (5% actuals vs 9% budgeted) when advertising gets the bells and whistles (34% actuals vs 22% budgeted). When all marketing 2.0 professionals are highlighting why embarking customers as co-marketers a.k.a. focus on customer centric marketing, is a must, when CEOs are complaining about marketing ROI, why in the world would we reinforce traditional advertising? Do we want to get Dell’d?
We also should be aware by now that isolated advertising does not lead to more sales. Advertising needs synchronous PR and on-line relevance/positive resonance to get a chance for our message to be well accepted, especially nowadays where an average individual is exposed to several thousands messages a day. We know best tactics for quality demand creation are Free trial demos, Webcast/Webinars, White papers and blogs. We know Integrated Marketing is the only effective way to execute – if you still wonder, I guess the shortest way to success left for you would be faith. We know a concise marketing dashboard with ROI driven metrics is the only possible way to articulate marketing value to our CEOs.
Knowing all of this we should never ever see such numbers and CEOs complaints again. Let’s make sure we put our money where our mouth is: focus our marketing spend on appropriate tactics. And let’s use our communication skills to demonstrate to our CEOs that marketing in its latest development a.k.a. marketing 2.0 is the way to accelerate companies growth.
So what if you thought you did a wonderful job as a professional marketer at building your brand – Interbrand numbers published in Business Week would show, right ? And what if you suddenly discover this is not so true on-line, especially with the advent of Web 2.0? I can see this look in your eyes telling me “this frenchy is just trying to drive more traffic to his blog”.
Well, it might be worth asking this question to your favorite marketing gurus if you’re starting to have faith in Marketing 2.0. Meanwhile, here is a very interesting initiative that addresses it for mega brands. Future Labs, referred by the MIT Advertising Lab, did an extensive research to compare online brand relevance for the 100 brands listed in the 2005 Business Week/Interbrand report.
Some of the leading indicators for this new index are : the number times a brand is mentioned in Google, the number of Technorati blogposts about the brand, the relative reach of the brand’s website as per Alexa ranking and more – read details in the research document. While Future Labs is open about receiving contributions from marketers around the world to help them track other Web 2.0 centric leading indicators, this is already demonstrative enough to include it in our Marketing 2.0 arsenal.
I encourage you to take a look at the entire list, but let’s just reflect here how the 5 leading Future Labs rated Brands are ranking in the Interbrand index:
| Future Labs
By the way I could not resist to mention Dell ranking #15 vs #21 respectively.
Have a look at the one year compared stock performance for these 5 brands as well and compare it to this one about the 5 Interbrand index leading brands (Coca-Cola, Microsoft, IBM, GE, and Intel). Even if you didn’t take a look because you’re already tracking these companies stock, the answer is obvious: Future labs leading brands are performing better.
My recommendation: have on line relevance as part of your corporate branding team measurement. If you didn’t have your next team meeting agenda nailed down yet, add this one topic. But do not just brainstorm about it, Marketing 2.0 is already here, take action.
We discussed here how ignoring voice of customers (VOC), especially nowadays with blogs and other users generated media, could influence a company’s stock value. I focused part of the discussion about Dell’s experience in suffering negative hype from the blogosphere, a good example being Jeff Jarvis blog’s Dell category. I ended suggesting to CEOs to appoint a Marketing 2.0 minded Chief VOC Officer as Marketing 2.0 is about co-marketing with our customers.
Well, here is chapter 2 fellow marketers. Dell launched its corporate blog a.k.a. Dell one2one, this very month. But as Steve Rubel points out, they missed the point again. The intent is right, the goal seems to be well oriented, but execution is not aligned. Starting a corporate blog without making sure your company can engage the customer community in a genuine, transparent and honest 2 way conversation with your brand will just get you Dell’d. Make sure you start to engage with the most outspoken and spoiled ones. Be open minded an candid and take action up front on a rising negative buzz — not as the one started off this Dell laptop exploding in a Japan conference that was not cooled down (the buzz I mean, the laptop finally stopped burning).
By the way, I’m a Dell customer, and a happy one for now. So don’t take me wrong, I’m not trying to complain about this brand to get a freebie, a refund or even a free computer (though if they want to send anything my way I might think about it twice 😉 ).
The moral of this story, at least for chapter 2, is that Michael Dell might be this Chief VOC officer I was describing. Dell needs Michael back as points BL Ochman, outlining as I did that Dell stock is headed south big time so it would be about time to enter Marketing 2.0 era. Stay tuned for Chapter 3…
Generating buzz seems to be the holy grail quest for marketers nowadays. But when comes the time to report to your management “how did it go?”, we’re expected to show some business opportunities, leads, and influencers logged into our tracking systems The number of seminar attendees won’t make it anymore. ROI, dashboards and key success metrics have been populating our marketing plan increasingly over the last 5 years.
So, what would be the most effective lead generation offer you could leverage in High-Tech ? This should pop-up as an on-going question from your staff each time you plan for a new campaign. Here are some numbers coming from a MarketingSherpa survey, issued in June ’06 that I wanted to share with you (see chart).
Surprise, surprise, blogs have joined for the first year the top rated marketing tactics when it gets down to prospects entering their details in your database. At the same time, sweepstakes — the beloved T-shirt and iPods — are still getting high response rates but unfortunately doesn’t translate into quality demand creation. So your transformation rate, or to put it differently the effort to result ratio doesn’t look good for marketers in our industry using sweepstakes as the main tactic. Webinars, on the other hand, seems to get a good performance review which reinforce the on-line effectiveness of marketing compared to traditional tactics. Finally, especially of you’re selling software technologies, free trial demos is the #1 tactic for qualitative results.
All in all, these numbers, coming from our peers being surveyed, are supporting the major claims we’ve been expressing in Marketing 2.0: Free is a good offer and on-line customer co-marketing is the way to go.
Aren’t you blasé in front of the constant coined terms alluvion attached to marketers discovering new ideas. So here is a new one: User-Generated Marketing a.k.a. UGM – it even has its own acronym! iMedia Connection reports on what advertisers say about UGM. I get the impression, when reading these lines, that most of them are still with this posture of considering that the brand manages consumers.
I got rid of this view of the world many years ago, when the Internet was in its early days – mid nineties – and we started to see reverse auction taking place in some B2C areas, used cars sales being one example. Whether or not the new way to acquire a used car was going to evolve 100% toward reverse auction is not the point here, but it was rather a sign that the major consumer-brand relationship shift lied in the advent of empowered consumers. Suddenly it was here, right in our face: consumers were driving the business, not the brand.
By the way, take a look at this business 2.0 survey, it is very clear: the #1 individual who matters is YOU, the consumer as creator, before Sergey Brin and Larry Page, Google Co-founders, Steve Jobs Apple Computer CEO and co-founder, or Bill Gates now benefactor.
Marketing 2.0 is not about understanding or even mastering this blog, Flickr, del.icio.us, or YouTube phenomena. It’s rather to take action upon consumers and customers driving our initiatives. And to me, it’s above all for us to establish and maintain a transparent and empathic dialog with them. Because the way they express their thoughts, experiences, desires and complaints are not done in a vacuum, just when you dare have focus group research organized. It happens publicly, everywhere, especially in places and at times where you don’t expect it and when you’re not prepared at all. Are advertisers and marketers in control ? What a joke!
Marketing 2.0 is one of the consequences of mass market individualization business models and low barriers to entry to ubiquitous personal communication to the masses. We have to embrace it, emphasize and facilitate the emerging trends originating from customers that are congruent to our strategy. Then what if our strategy is never coming across these trends ? Well, I guess it’s about time to reconsider our strategy and our core competencies, don’t you think Mr CEO ?
||A short clip from the 2006 Creative Commons iSummit in Rio de Janeiro. Watch Minister of Culture and musical legend Gilberto Gil toast to Creative Commons with the specially brewed, Danish “Free Beer.”
Some Rights Reserved. Available under the Creative Commons Attribution License (Brazil) 2.5.
We discussed here about the open source in software as a new economics driving force in Information Technology industry, how giving away its product and services could lead to the best European profitability for Airlines – see Free is good for our business Mr CEO. Well, what would you say about beer going open source and free? Yes you read beer, like in a pub, watching a world cup final – ooops not the final, not the final, I’m French.
“Danish Vores Øl (‘Our Beer’) claims to be the world’s first open-source beer. The recipe and the entire brand is published under a Creative Commons license, meaning that anyone can use Vores Øl’s recipe to brew the beer or to create a derivative. As long as home brewers publish the recipe under the same license, they’re free to make money from their efforts, which includes free access to Vores Øl’s design and branding elements.” reports TrendWatching.
As the recipe embed Guarana, a fruit used in Brazil for very popular soft drinks, Gilberto Gil was caught up in a video – now distributed through YouTube, a fast growing Web 2.0 brand all about video sharing – tasting it and promoting it probably without knowing it. Isn’t it an interesting gimmick of viral marketing? The story does not tell if Gilberto Gil asked for a compensation out of it, nor complained about his brand image being exploited beyond his control. Welcome to the world of Marketing 2.0!
Fellow marketers, do you have such a marketing tactic in your next campaign ? Is creative thinking part of your Web 2.0 arsenal ? Are you able to share through open source the very core of your craft to generate volume adoption of it, driving to more business opportunities ? Will you consider “Free” as one of the element of your next media planning ? These are questions that we’d never asked even 2 years ago.
The Free Beer story is true and real, but originated from a group of students at the IT-University in Copenhagen. They created “Our Beer” in collaboration with Superflex as an experiment in applying modern open source ideas and methods on a traditional real-world product (beer).
When is the coming real corporation experience going to happen ? Or did it already happen ?
Well done “Our Beer” fellows !
Coming back on how Dell is managing its customer service and the negative buzz happening in the U.S.- see Don’t you ever get Dell’d – , marketers should consider these emerging opinion bloggers as a clear indication of a brand perception shift and act upon it. As Business Week is reporting, Dell strategy is shifting from cost efficiency and constrained DSO, as outlined in this finance report, to improving customer satisfaction as “In 2005, Dell’s customer satisfaction rating fell 6.3% to a score of 74 in the Michigan ranking, the steepest decline in the industry” reports Business Week.
But this week has signaled analyst concerns over the PC industry in the U.S., and especially pointed out Dell (DELL) and Apple (AAPL) which respective shares fell more than 4% and less than 5% respectively. Apple is suffering iPod new version tech delays, as Microsoft (MSFT) for its long awaited Windows Vista, but Dell “continues to be impacted by competition and adverse mix shifts within the PC market.” says UBS investment research and is loosing shares to its competitors. Check here for a one year stock performance comparison.
The question is what is the best positioning dimension for a brand operating in such a mass market environment: operational excellence, product leadership, or customer intimacy ? – coming back on the Value Disciplines Model highlighted by Michael Treacy & Fred Wiersema in The Discipline of Market Leaders. If we’re only looking at stock performance over 5 years of DELL, Microsoft and Intuit (INTU) clearly representing the 3 dimensions, the answer seems obvious : customer intimacy wins in the long term.
Then you would object, to put it more nicely than “I tend to object”, take a look at Apple stock compared to this and you’ll get a different perspective. I know some would even say Microsoft is not positioned as a product leader but I don’t want to get into this discussion being too much biased myself. Apple has been surfing on innovation and design to significantly go beyond customers expectations with iPod. But what Apple added to that Steve Jobs special cocktail of his is an excellent way of managing positive buzz in the market, especially on the web.
These thoughts would benefit from a longer debate here or in a longer post, but for now I’d like to just strongly believe that the social implications of Web 2.0 technologies didn’t change Treacy and Wieserma analysis. Whatever the market you’re into, whatever the nature of your business, you need to find out for your brand what is the best positioning dimension among these three: operational excellence, product leadership, or customer intimacy. Marketers subscribing to Marketing 2.0 need to incorporate new ways of sensing the market pulses and their customers brand perception in order to make that decision and leverage Web 2.0 technologies to embed new marketing tactics for buzz management in their marketing plans. The most difficult thing I believe will not be to harness these new techniques, but to do it with transparency and honesty in their corporate communication. Not doing it, will get you Dell’d.
Today is Bastille day in Paris. I’m lucky enough to enjoy the beauty of this city at night, especially yesterday night when fireworks gave the Eiffel Tower a special touch. So let’s take a break and enjoy Flickr, one of the most remarkable Web 2.0 killer app not only because of the contributions volume it enjoys and its reach, but also because it’s a brilliant demonstration of how a web service can morph into unexpected new applications. It did strike me when France was under the pressure of major social movements back last year. A huge number of demonstration participants used their digital cameras and mobile phones to upload Flickr with insiders views of what was going on. Suddenly, Flickr transitioned from a shared tagged photo feed to a trusted information source.
As debate was going on in the news about the protest nature and the footprint, visual individual contributions – not only photos but videos as well by the way- became voice of the people.
Allons enfants … Let’s share
As I was highlighting in Web 2.0 goes world wide, the hype and laser speed explosion of Web 2.0 in the US is now widely making it in Europe. Here is an interesting first edition of The Next Web conference that took place in Amsterdam last week – July 7 – reinforcing my claim. No big names in the list of sponsors and the conference is not free. A good indication of quality content ? Bingo, they had Kevin Kelly – the founding executive editor of Wired magazine – as a keynote speaker. He was apparently very inspirational to the audience as Ed Yourdon reports in his long post about the keynote. They had six European startups explaining their business model to the 250 people or so attending: eSnips, Widsets, Allpeers, Netvibes, Plazes, and Hyves.
Communities were really at the very heart of everything, as expected, and Kevin’s keynote emphasized the “give it for free” business model which is a key issue for all “legacy” software companies. It’s very funny to attest these heavy weight software corporations trying to deal with the paradigm shift: Oracle, Microsoft and the lots. As I did spend all of my IT career in software, I’ve been watching the rise of open source and now entered its bells and whistles with Sun Microsystems when we decided, back in early 2005, to move our flagship operating system Solaris in the open source world with OpenSolaris. The massive reaction from our sales force at that point was: but how are we going to make any revenue out of a free stuff ? It did, and it still does, take a lot of energy to show that the more we push our intellectual property in the open source community, the more we grow our software revenue stream. The major mindset change here for a sales rep is that revenue is coming from all services surrounding the technology deployment within the enterprise rather than selling a software license itself.
Another take at it – which is very core to Web 2.0 – is advertising based business models, Google being the most visible of them. The dynamics relies on sharing free stuff to attract millions of consumers. Finally, after more than 10 years preaching about the Internet emerging business models that eye balls can drive to revenue, this has become a solid reality even in Wall Street. Volume turns into asset that can be monetized.
I’m not going to demonstrate at length here how fighting the open source business model is like fighting gravity for all software firms, but I was stunned with this free stuff concept moving to the brick and mortar world. I do not know if you went through this exercise of convincing CEOs and CFOs that “free is good”, but this could be the ultimate test for motivational speech specialists. For us, fellow marketers, the question is : how will we react when our competitors will give their products and services for free ? KLM was offered that crazy idea but turned it down. But now RyanAir is making big bets on Make Fying free. and becoming the most profitable European airline. This is not a prediction but it’s happening now: they already offers free fares to a quarter of its customers i.e. a total of 3 Million free seats last year !
Yet another dimension to Marketing 2.0. To be continued …