I spoke last week at Interact 2011, a Responsys-sponsored event attended by about 600 of its current clients and prospects. The theme of this year's event was "The New School of Marketing," a framework Responsys has developed to help marketers better connect with empowered consumers. The fundamental principles of New School Marketing are that it is: permission-based, automated, cross-channel, and focused on engagement. See what Responsys thinks will change from current approaches to those that are part of New School Marketing:
I found the event to be extremely well produced (not just because it featured a fantastic performance by the iconic Cyndi Lauper -- see photos below) and full of some great marketer stories which I'd like to share in my next several posts.
At the risk of someone saying I can’t let this Groupon thing go (I can’t), I saw a fascinating graphic the other day. Groupon has, as its proponents like to tell everyone they meet, the dubious distinction of being the fastest company to get to $1B in sales. Why I say dubious (and what I found fascinating about the graphic) is that the second-fastest ever to achieve the same milestone was none other than Priceline. How apropos because I can’t resist pointing out the similarities:
Both thrive on the thrill of finding an outrageous deal (sales and scarcity go together like a horse and carriage; they’re two of the most effective merchandising tactics that exist).
Both are called disruptive models (Priceline lets travel buyers name their price; whereas, Groupon essentially lets companies split marketing costs directly with customers rather than with media companies).
Both have a “gross merchandise value” model (that basically means a lot of mystery around what customers pay and what the company actually earns).
Once again, I spent a couple of days in Barcelona at Mobile World Congress (MWC).
With 60,000 visitors (10,000 more than last year) — including an amazing 12,000 developers (!), 3,000 CEOs, and 2,900 journalists — MWC is the place to be for anyone wanting to make the most of mobile technologies.
Year after year, it is interesting to see how the show is becoming more global, more open to non-telecom players (advertisers, developers, etc.), and more open to connected devices other than just phones.
While it is difficult to summarize all the news and announcements, here are my key takeaways from MWC 2011:
Android, Android, Android.Google’s Android stand was the hit of MWC this year. Why? Very clever marketing: It was located in the main hall away from all the other players in the App Planet hall; it had a “cool” bar with animations; the Android robot logo was all over the place; and it featured interesting demonstrations from startups and key players. Google’s Android was helped by Apple’s absence and the lack of a serious upgrade to Windows Phone 7, unlike last year. Of course, the Nokia-Microsoft deal came up in most conversations. Forrester has already published its take on the strategic implications of this key announcement (clients can read it here). As my colleague Charles Golvin sums it up: “Nokia hopes to produce its first Windows Phone in 2011, but it will not bring a significant portfolio to the market in volume until 2012 — a lifetime in today’s smartphone market.” With 300,000 Android phone activations per day and 170 Android-based handsets currently available from 27 vendors, Android is definitely getting a lot of traction.
In July 2010, we posted a Data Digest that shows that almost half of US online males and 42% of online females read consumer ratings and reviews at least monthly. Well, what types of decisions are reviews helping these consumers to make?
Our Technographics® data shows that, as most would expect, more than half of the consumers who check ratings and reviews use them to help make more complex decisions such as a car, TV, or refrigerator. However, these are not the only types of decisions consumers are looking to reviews for — in fact, most check reviews to help with a variety of decisions — from entertainment decisions to making purchases for their jobs.
When we look at this data by generation, it is no surprise that Gen Yers are more likely to use online reviews across most of the decision types that we ask about compared to the overall US population. What is interesting is how dependent they are on online reviews when it comes to entertainment choices (44%) and purchasing ongoing services (41%). And although young consumers lead with using ratings and reviews, it is interesting to see that Seniors that are using ratings and reviews show similar behaviors compated to the total US population for most categories -- apart from the job related one.
The most important outcome of this week’s emerging tussle between Apple and Google is that we are about to have an intense and financially difficult conversation about what a fair price is for delivering customers to developers, publishers, and producers. Economically, this is one of the most critical issues that has to be resolved for the future of electronic content. Very soon, a majority of consumer experiences (that which we used to refer to as the media) will be digital. But not until the people who will develop those experiences have unambiguous, market-clearing rules for how they can expect to profit from those experiences.
The question comes down to this: Is 30% a fair price for Apple to charge? I must be clear about my intentions here. I do not employ the word “fair” the way my children often do. I am not whining about Apple’s right to charge whatever it wants. Apple may do whatever is best for shareholders in the short- and long-run. I argued yesterday that Apple’s recent decision does not serve its shareholders in the long run. Google announced One Pass yesterday – hastily, I might add – in order to signal to Apple and its shareholders that monopoly power rarely lasts forever. But none of that questions the ultimate morality of Apple’s decision or its rights.
I use the word “fair” to refer to a state of economic efficiency. A fair price is one that maximizes not just individual revenue, but total revenue across all players. Such revenue maximization cannot be achieved without simultaneously satisfying the largest possible number of consumers with the greatest possible amount of innovation.
This quarter I'll be writing a report on the rise of the digital brand -- focused on how interactive tools have changed the ways in which we convey the meaning of our brand to our customers, and how smart marketers can react to (and even take advantage of) those changes. I'm at the early stages of my research, and I'd love the community's help in shaping the direction of this report.
Next week, on February 28, I will speak at the ESOMAR Insights Conference in Brussels on 'The Evolving Online Consumer' and I'm currently organizing my thoughts around this topic. Looking at the uptake of the Internet globally, the numbers are impressive: In the past five years, the global Internet population has grown from about 1 billion to 1.6 billion, and this growth isn't about to stop any time soon. The Internet population will increase in every country in the world over the next five years, but emerging markets will grow at a faster pace. In 2014, one-third of Internet users will come from Brazil, Russia, India, or China (the so-called BRIC countries).
Companies that want to capture this growing number of online users — and their growing funds spent online — will need to look beyond the markets of North America and Europe and approach their online strategies much more globally. But emerging markets don’t just offer a lot of opportunities; there are also many challenges to consider. On top of the needs and wants of the consumers in the different countries, their online behaviors, and the way they are being influenced (and are influencing others) in their purchase decisions, companies need to understand the social and economic business environments.
Most wealth management firms have gotten a pass on mobile, because the people with the most money – older Boomers and Seniors – are the ones least likely to use the mobile Web or mobile apps.
But that pass is expiring. Mobile is exploding, and even the older investors are part of the surge. As we show in the just-published The State of Mobile Investing, 11% of online adults with investment accounts are now mobile investors, up from 8% six months ago (see Figure 1). Two thirds of these mobile investors use their mobile devices to check investment account balances. Half get stock quotes or other market information via mobile. A quarter are mobile traders.
Figure 1: More Than One In 10 Investors Is A Mobile Investor
As channel managers at investment firms scramble to map out a mobile strategy, they face one particular dilemma: mobile apps or Mobile Web sites? While downloadable apps command lots of attention today, we believes that the mobile Web will remain a critical delivery method for the foreseeable future. The simple answer to the app versus mobile Web debate is: both. We recommend that firms develop a high-quality dedicated mobile Web to get the broadest possible reach, and choose a single platform on which to pilot downloadable apps. Then buckle your seat belts! The pace of mobile market innovation won’t slow down for the next few years.
Yesterday Apple announced its intention to tighten its hold on the payment for and the delivery of content through its successful iTunes platform. (I’ll leave off the I-told-you-so; oops, too late.) Apple will require that all content experiences that can be paid for in an Apple app must be purchasable inside the app, with Apple collecting its 30% fee. The app can no longer direct you to a browser or some other means for completing a transaction. Crucially, the in-app purchase offer must be extended at the same price as the same offer made elsewhere. Though the announcement of the subscription model was the triggering event, the policy extends to all paid content.
I do not believe this is where Apple will stop – I personally expect them to eventually deny the delivery of content paid for outside of the app without some kind of convenience charge. But my personal expectations are irrelevant here, because what Apple has done already is sufficient to make providers of content aggressively invest in alternative means to reach the market.
Subscription content services are the lifeblood of the content economy. A full 63% of the money consumers spend on content of all types comes through a renewable subscription (I’ll be publishing this data from a survey of 4,000 US online adults as part of a bigger analysis next month, hang tight). Most of that subscription revenue goes to pay-TV providers, but 17% of it goes to newspaper and magazine publishers, including their online or app content experiences.
The consumer appetite for smartphones shows no signs of slowing in 2011 and neither does the growth of the mobile channel at leading retailers. eBusiness leaders, who have been focused on replicating the online store experience on mobile are now turning their attention to new mobile innovations that will not only drive revenue growth for the mobile channel but create an immersive multichannel consumer experience that bridges the gap between online and in-store shopping.
Location-based commerce is one such innovation that is gaining interest among eBusiness leaders responsible for mobile strategy. Some retailers have experimented with third-party location-based services including foursquare and Shopkick to roll out location-aware mobile coupons. A few retailers have innovated further and are developing location services into their own mobile shopping apps beyond the basic "store finder" feature to create new ways to interact with shoppers via their smartphones. With my latest research, Location-Based Commerce: An Evolution In Mobile Shopping, we look at how consumers' mobile shopping habits, location technology available in newer generation smartphones, and mobile push notifications have matured sufficiently to empower a new set of location aware multichannel experiences. Retailers are using geo-fences defined in the vicinity of their brick-and-mortar stores to attract nearby consumers by sending relevant, timely, and location-aware messages to customers' phones.