Archive for November, 2009

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iPhone Users More Willing to Pay for Content

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An interesting story in today’s Guardian. According to the Media Convergence Survey 2009 conducted by media law firm Olswang, iPhone owners show greater willingness to pay for content than the average Internet user:

The research … adds weight to the growing sense within the media industry that the explosion in popularity of downloadable applications for the Apple device has created a way of monetising digital content. Crucially, it may represent a more lucrative proposition than the current reliance on online advertising.

There is a catch, though, for content owners such as Rupert Murdoch, for whom factual journalism is a major product. Both iPhone owners and other Web users said they would be much happier paying for films, catch-up TV, e-books, travel guides and magazines than for news.

Posted: November 25, 2009. Filed under: Consumers & E-Commerce,Mobile,Online Video,Usage  
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My Coke Rewards: Combining Mobile and Social Media to Drive Brand Loyalty

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We recently chatted with Michael La Kier of Coca-Cola about how the company ties social media and mobile marketing into its My Coke Rewards program to drive brand loyalty. From the interview on eMarketer Total Access:

eMarketer: Does the program enable consumers to enter codes via mobile phone?

Mr. La Kier: We offered mobile from day one—it is a big component of My Coke Rewards. People drink our brands on the go and don’t want to carry a bottle cap all day long. They can enter a code via mobile phone and SMS texting. Mobile has always been a pretty big part of our program from a participation standpoint and from a mobile messaging and marketing perspective. We also have a desktop widget so people can enter codes directly from their desktop computer.

We have a variety of ways for people to participate in the program—via SMS, the site and the widget. When they become members, we can look at what brands they’re drinking, which packs they’re buying, promotions they’ve participated in and rewards they’ve redeemed. We look at how people want to interact with us, what information do we want to know, how do we provide value and get value. We invite them to take surveys. We have a lot of information about what consumers are doing and their passions so that we can serve up rewards, offers and sweepstakes based on that information.

eMarketer: How are you using social media platforms to guide strategy on My Coke Rewards?

Mr. La Kier: About 12 to 18 months ago, we created a private social community. We offer the people in this network first looks at new program features and get feedback in the form of discussion boards, activities and interviews.

From a consumer-facing perspective, a lot of the promotion we do on the site has a social element. For example, this summer for Coke Classic we had a design-a-can promotion. People could submit their design, vote and the finalists received prizes.

eMarketer: How have you deployed social media tools to engage My Coke Rewards members?

Mr. La Kier: We already have a base of 13.5 million members. We wanted to provide something fun and unique to highlight the special moments of summer that people share with Coca-Cola. That’s the reason for the collectible can series—to let people interact and create their own summer moments.

Once you created the cans, you could share the designs on Facebook and elsewhere. We created an integrated online and offline program around sharing special moments with Coke in summer. We used social and viral aspects to broaden the likelihood that people would participate in the program. Social media is just another way for us to get the word out and turn our advocates into brand champions.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs. We also recently interviewed Coca-Cola’s Carol Kruse about the company’s use of digital media and marketing and the evolution of social media. Those stories are here:

Posted: November 25, 2009. Filed under: Advertising,Brands,Case Studies,Interviews,Mobile,Social Media,Social Media Marketing  
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The Prospects Look Bright for Retail E-Commerce Sales

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In my just published Online Holiday Shopping Preview report (available to eMarketer Total Access subscribers), I forecast that e-commerce holiday season sales will grow 5.4% over last year, reaching $30 billion. Although this is tepid growth compared with the double-digit rates seen for most of this decade, it is a strong improvement over last season’s 5.7% decline. It also compares favorably with retail experts’ predictions of flat holiday store sales.

My online holiday sales forecast incorporates last week’s US Census Bureau report showing that after three consecutive quarters of sales declines retail e-commerce sales turned a corner in Q3 2009 by growing 2.1%. I expect that the recovery will gain momentum in Q4, spurred by holiday spending in November and December.

E-commerce is ideally suited for holiday shopping. The convenience of 24-hour shopping, the ability to compare prices, the opportunity to avoid crowded malls and the ease of finding items that run out of stock in nearby stores are all reasons why holiday shoppers will buy online in greater numbers and shift a bigger share of their total gift spending to the Internet this holiday season.

I am optimistic about the future of e-commerce. Over the next couple of years, unleashed pent-up demand should push e-commerce sales growth back to pre-recession double-digit levels. Mobile commerce, which is on the verge of taking off, will add new vigor to e-commerce. Further on the horizon is the intriguing potential of distributed e-commerce. Retailers will no longer wait for customers to come to their Websites. Instead they will bring their virtual stores to the sites where consumers congregate.

Posted: November 24, 2009. Filed under: Consumers & E-Commerce,Mobile,Social Media  
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News Corp. & Microsoft: Pros/Cons

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So, will News Corp. take money from Microsoft, confining links to its content — such as FOX News and the Wall Street Journal — to Bing rather than across all search engines (that is, not on Google)?

From the BusinessWeek perspective, it might be a “flawed deal”.

As the eMarketer quote from that BW article puts it:

To the extent that [News Corp.] finds reduced traffic, it would be reducing their revenue and they would become more dependent on Microsoft. Being dependent on a large giant company for a large share of your revenue is very shortsighted.

But as an article in Advertising Age notes, “Murdoch can afford to leave Google for Bing.”

Or as Mr. Murdoch said recently:

What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?

As traditional media companies scramble to make up for lost advertising dollars, it’s tempting to make deals that give them payback for their online content. Their fear focuses on how online news is increasingly a mere commodity. However, the thinking goes, if the media companies can make their news content exclusive, that would make it more valuable.

One wonders, though, how much Microsoft cares about getting a news exclusive, even it includes the Wall Street Journal. Perhaps, just by undercutting Google even a little bit, Microsoft might see a News Corp. deal as a winning move.

Is that too cynical? Are Rupert Murdoch and Steve Ballmer simply playing some kind of chess game?

This potential deal reminds me of the old joke about how fast do you need to be to outrun a bear in the woods? The answer is: Just a bit faster than your companions.

In this case, is Google the bear?

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UPDATE

As Andrew Leonard describes the intent of the News Corp.-Microsoft alliance in his excellent How The World Works column on Salon.com:

Fundamentally, what Microsoft and all the other newspapers looking to retreat from the free Web are banking on is that they can profit by reducing our access to information. Good luck with that.

Swimming against the tide of the Internet has not often proved profitable.

Posted: November 24, 2009. Filed under: Advertising  
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“Why The American Consumer Will Keep on Buying”

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We recently chatted with author/blogger Lee Eisenberg about his new book, “Shoptimism: Why the American Consumer Will Keep On Buying No Matter What,” which explores shopping behavior from both the consumer and retailer sides, social media, academic and marketing research, and Mr. Eisenberg’s own experiences. Interesting stuff. A clip from the full interview on eMarketer Total Access:

eMarketer: How has the recession changed the way we shop?

Lee Eisenberg: My book’s subtitle is “Why the American Consumer Will Keep On Buying No Matter What.” Now that’s not to say that the American consumer will keep on buying the same way, or the same things in the same stores. But where there’s a will to shop, we will find a way to shop. We’ll never stop shopping and the sales side will never stop selling.

I think the recession has rebalanced our mindset. Most of us are now more mindful about what we buy than we were a couple of years ago. It’s not to say we won’t be spending money on big-ticket things or designer labels and so on. But I do think we’re placing a much bigger premium on value, and by that, I don’t mean absolute price. You read a lot these days about cost per wear, which is to say you take the price and you divide it by the number of times you wear it, or the amount of use you’ll get out of it, and that equals value. Value proposition is far, far more important today than it was a couple of years ago.

The other thing is social media. Every survey says 85% of us would trust what the rest of us say about a product or a retailer more than what an advertising agency says about its client. That’s a big change that’s not going to go away as the economy improves. These retailers have to learn that they don’t have the power to regulate or project their brands the way they used to.

eMarketer: How should multichannel retailers approach online versus offline shoppers? Are they one and the same? Is one more valuable?

Mr. Eisenberg: The brand values, voice and principles must be the same whether you’re delivering those in a store or online. That said, I think you’d be hard pressed to find any retailer that won’t tell you that the best customers are the cross-channel ones. It isn’t an “either/or.” It’s an “and/both.” A customer who shops two or three ways is going to spend more than a customer who only shops one, even if that customer is a heavy shopper in that one platform.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs. Some other interesting interviews/case studies on retail:

Posted: November 24, 2009. Filed under: Brands,Case Studies,Consumers & E-Commerce,Social Media,The Economy  
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