LivingSocial Gains on Groupon … but analysts say neither may be a long-term bet.

TakeAway:  Today, LivingSocial — the No. 2 player in the rapidly expanding market for online discounts — is still David battling Goliath (i.e. Groupon).

But the great chasm between the companies is narrowing, as the upstart gains more subscribers and collects more cash.  At the same time, it is trying to differentiate its brand.

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Excerpted from the NYTimes, “In Race With Groupon, LivingSocial Raises $400 Million” By Evelyn Rusli, April 4, 2011

In recent months, LivingSocial, which like its larger competitor serves daily deals to subscribers based on their location, has started to roll out new features. LivingSocial Instant, a mobile application that delivers time-sensitive discounts to users on the go, is a product that is currently only available in the Washington, D.C., area, where the company is based.  It has also introduced Escapes, a dedicated page for travel deals, an area on which Groupon has not focused heavily.

In its marketing campaigns, the company retains a youthful attitude with an “approachable sophistication,” said the company’s vice president for marketing.

Since the beginning of 2011, LivingSocial’s staff has roughly doubled to 1,300 employees, scattered across 250 markets in about a dozen countries. The number of LivingSocial subscribers now exceeds 26 million, about a third of Groupon’s audience.

One deal in January, a national promotion for a discount Amazon gift card for $10, attracted 1.3 million purchases in one day, or about $13 million in sales. Those returns surpassed Groupon’s first national deal with Gap in August, which generated about $11 million.  By the CEO’s estimates, LivingSocial is on track to reach 400 markets in 2011, with a staff of 3,000 people. In the last few weeks, he has also doubled his revenue goal, to $1 billion.

But as LivingSocial’s statistics climb, some analysts warn the industry may not have a big upside over the long term.

Several local vendors have publicly expressed dissatisfaction with daily deal services, which often attract discount-seekers instead of repeat visitors.

Edit by AMW

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Click here if you ‘like’ Google’s ‘plus one’ feature …

TakeAway: Google’s making  another attempt to break into into the social web by creating a “plus one” feature for its search results.

Much like on Facebook, you will be able to share your likes as well as see other people in your network of contacts’ and the things they like. 

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Excerpted from AdAge, “Google Adds Own ‘Like’ Button in Foray Into Social Search” , March 30, 2011

Google‘s take on the “like” button — the “plus-one” —  to make search more social, and to combat the growing dominance of Facebook.

Google will allow users to vote plus-one on search results and to share that preference in Gchat, Gmail, Google Reader, Buzz and, soon, Twitter.

This is the first time Google has added a direct social signal into search results.

Over time, Google will integrate the plus-one into the search algorithm itself so human votes will have an impact search ranking.

“Injecting a social layer into the algorithmic search is key to relevance… 35,000 results in less than 3 milliseconds. It’s meaningless, but if you can sort through those by people who have given a social signal and those rise to the top, it can only enhance the user experience.”

The question is whether Google can keep bad actors from gaming the plus-one system for fun or for profit. Google, to its credit, has a lot of experience filtering out attempts to game its algorithms..

Edit by HH

Buy more of my products and I’ll make a small donation to charity … if I remember.

TakeAway: As many people rally around Japan, companies must walk a fine line when combining a brand message with an expression of sympathy. 

As consumers become increasingly skeptical of cause-related marketing and celebrities, organizations and major marketers have to balance trying to help without appearing to exploit the tragedy for profits. 

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Excerpted from the WSJ, “Cause-Tied Marketing Requires Care” By Emily Steel, March 21, 2011

Microsoft’s Bing learned that lesson early on. The search engine created a backlash when it posted a message on Twitter, offering to donate $1 to Japan’s relief efforts each time someone forwarded its message.  The missive set off a firestorm of complaints from Twitter users, who accused Bing of using the tragedy as a marketing opportunity. Within hours, the company responded. “We apologize the tweet was negatively perceived. Intent was to provide an easy way for people to help Japan. We have donated $100,000.”

Marketers have to be especially careful when they create programs that commit them to donate a portion of their proceeds if someone makes a purchase, some ad executives say. 

Still, several retailers are deploying this strategy.  U.S. sushi chain SushiSamba said that through the end of March it will give 100% of the proceeds of a special $12 sushi roll to relief efforts. 

Other marketers are giving their customers benefits in exchange for making donations. American Airlines and Continental Airlines said they would reward donors with bonus airline miles. 

Many companies have chosen to stick to straight donations, instead. Wal-Mart, P&G, Coca-Cola and Walt Disney are among more than 100 corporations across the globe that have committed to donate a total of more than $151 million in cash and other products or services thus far.

Marketers are promoting the initiatives through public relations, their own websites and social networking. While companies often want consumers to know about their efforts, few are launching ad campaigns to avoid any criticism of their intentions.

As relief efforts continue, companies’ motives are likely to be less altruistic, ad experts say. “The first people that do it probably have their heart and head in the right place,” Mr. Adamson says. “But as you go further along, more people try to jump on the band wagon. Doing good becomes less substantial and more of an attention grab.”

Edited by AMW

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Facebook; “Pssst, I hear you’re yearning for a pizza …”

TakeAway: When you thought Facebook couldn’t get any more stalkerish, it has just rolled out real time ads relating to status updates, posts etc.

In the mood to eat some cupcakes? Immediately cupcake ads should populate the side bar of your Facebook page. 

With real time ad response, Facebook hopes to put advertisers between consumers’ current thoughts and desires and the next step of fulfilling it.

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Excerpted from AdAge, “Facebook Test Mines Real-Time Conversations for Ad Targeting” by Irina Slutsky, March 23, 2011

….Facebook started to mine real-time conversations to target ads.

For example: Users who update their status with “Mmm, I could go for some pizza tonight,” could get an ad or a coupon from Domino’s, Papa John’s or Pizza Hut.

A user may not have liked any soccer pages or indicated that soccer is an interest, but by sharing his trip to the pub for the World Cup, that user is now part of the Adidas target audience

With real-time delivery, the mere mention of having a baby, running a marathon, buying a power drill or wearing high-heeled shoes is transformed into an opportunity to serve immediate ads, expanding the target audience exponentially beyond usual targeting methods such as stated preferences through “likes” or user profiles.

The moment between a potential customer expressing a desire and deciding on how to fulfill that desire is an advertiser sweet spot, and the real-time ad model puts advertisers in front of a user at that very delicate, decisive moment.

“The long-held promise of local is to deliver timely, relevant and measurable ads which drive actions such as commerce, so if Facebook is moving in this direction, it’s brilliant.”

This real-time test could make a huge difference in how Facebook ads perform, as well as how they are perceived by users. …some analytics firms claim that the Facebook display ad click-through rate is abysmally low — 0.051% in 2010, or about half the industry average…

Edit by HH

Pepsi hypes social media … as share slides

There’s a nagging question: how to quantify the ROI of social marketing, and the impact on the bottom line.

Pepsi diverted its Super Bowl ad budget to its “Refresh crowdsourcing initiative” — an ongoing corporate citizenship effort that was cited by Ad Age as a factor in why Pepsi has slipped to third place behind Coke and Diet Coke in the US.

Pepsi’s argument: you’re either on the digital train or you’ll get left behind.

According to PepsiCo’s Director of Digital and Social Media:

• Technology affecting our lives is nothing new. Once clocks were invented, we began living our lives by the clock.
• There have been more apps downloaded since apps began than all the music downloaded from iTunes.
• Kids are “addicted” to the iPad and think all screens are touch screens
• Grandparents now have relationships with their grandchildren on Skype and Facebook.

Excerpted from: BrandChannel, PepsiCo Pumps Up Digital Fitness, March 24, 2011

Brands and Buddies, the new way to Bing

TakeAway: Visual “tiles” that come up with Bing’s search results are part of the Bing’s innovations  to make the search platform more interactive and relevant to its users.

It is also showing the searcher’s Facebook friends’ Likes as another way to for users to validate the results. 

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Excerpted from BrandChannel, “Bing Enhances Search with Brands and Buddies”  by Sheila Shayon, February 25, 2011

… search with Microsoft’s Bing lately, noticed the tiles now included with dynamically rendered visual info from brands in the entertainment, local, travel and auto categories. … enhancing Bing to be more relevant to users.

User queries trigger them to appear on the right side of the screen from one of 45 launch partners including IMDb, Yahoo Movies, Rotten Tomatoes, OpenTable, Yelp, CitySearch, Urban Spoon, Cheap Flights, YouTube, MTV, Last.fm, Rhapsody, Pandora, MSN and dozens more.

The tiles are interactive and click-through on a Pandora or Rhapsody tile brings up a song or checks the number of plays via Last.fm.

… the tiles are “going to be pulling in metadata from those sites. …figure out the results they’re looking for if you append some kind of visual cue onto the page.” … And enable users to “ingest third party content more successfully,” …

… “an innovative move to add images to the organic results. But … innovations must come from the ranking results vs. making adjustments to the aesthetics of searches…

… not so much intrusive as a value add to the search and/or social online experience: …feel Bing as a search engine is more user-friendly, smart and reputable. Consumers are intrinsically drawn to visual references and respect and trust this type of added feature when looking for a product…

… Bing tiles are the latest ingredient in a richer mix evocative of Microsoft’s Windows Phone 7 interface with alerts on homescreen tiles updated real-time.

Add to the mix that Bing also now displays your friends’ Facebook likes in your search results, …

Edit by HH

Is social media losing its edge?

TakeAway: With all the recent social media flops some say the end of using social media is near. 

While the way people get and consume information is different, the idea behind making a product that people need and selling it them stays the same, and CMOs need to do things that matter like actually selling the product.  

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Excerpted from AdAge, “Do Campaign Failures, High-Profile Firings Signal the End of Social Media?” by Jonathan Salem Baskin, March 22, 2011

The latest news involving social-media pioneers isn’t good. Pepsi has fallen to third place behind Diet Coke in spite of its widely heralded switch from Super Bowl ads to a huge social charity program called Refresh Project. Burger King has …fired agency Crispin Porter & Bogusky after producing Facebook campaigns and viral videos that got lots of attention while the business witnessed six consecutive quarters of declining sales. …

Every CMO should use this occasion to pause and reflect …on rolling out a social-media campaign or start giving away content for free. Unfortunately, there are many reasons why you shouldn’t, and may not.

… what good are invented metrics for social campaigns if they don’t evidence any influence on sales? There’s no such thing as a successful brand that doesn’t deliver successful marketing, is there? In fact, the latter builds the former. They can’t be disconnected, and if social marketing can’t be made responsible for tangible behaviors that matter to the business, not just to ideas about branding, then no made-up measures of its importance matter much at all.

… Identifying what the social efforts did, if anything, requires the upfront presumption that they were necessary and therefore accomplished anything at all that mattered (like starting out to claim that cereal is “part of a balanced breakfast”). …

…beginning of the end of social media’s infancy. Maybe it’s time to stop talking unseriously and get serious for real. Technology has utterly changed the ways consumers get and use information, and it has completely disrupted how companies create, share and collect it. …People still need and do the same things they always did, and companies still need to sell to them. Pretending that conversation has any value apart from the meaningful, relevant and useful information within it — fad ideas, like “content” is anything more than a silly buzzword, or that anybody wakes up in the morning hoping to have a conversation with a brand of toothpaste or insurance — is no longer credible in light of the latest news.

Instead, CMOs need to discover new ways to do the old things that still matter: Offer products and services that someone truly needs, admitting that you want to sell stuff to them, and then properly serving them after they’ve given you their business. Sounds so easy as I type it but doing so has gotten so incomprehensibly complicated. Maybe the news coming out of Pepsi and Burger King is a wakeup call that we need to make all of this simpler, not harder. …

 

 

 

Edit by HH

Suburban moms — armed with iPads — spur mobile commerce …

TakeAway: If your company is utilizing ecommerce, you will want to make sure it is iPad user friendly.

More and more shopping is being done on tablet devices and is stealing its share from pc based purchasing especially as women are becoming heavier users than men because of the inability for the manpurse fad to stick.

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Excerpted from AdAge, “How the iPad is Reshaping Ecommerce”  by Patti Ziegler, February 22, 2011

The growing cohort of iPad owners — wealthy, tech savvy, and increasingly female — is emerging as a powerful driver of online retail sales.

… iPad has become a must-have mobile device for many suburban moms, who seem especially fond of shopping (and playing Scrabble) …

…counterpoint to common technology stereotypes, women appear to be gaining on men as the fastest growing segment of early iPad adopters. In fact … the female-to-male ratio of iPad users shifted from 1:2 to 2:3… This finding is particularly significant when one considers that women control between 70% and 85% of household spending in the U.S…

…the iPad has emerged as …the poster child for a new class of mobile commerce. Many retailers report that over 50% of their mobile traffic is now coming from the popular tablet device, …

…rather than creating new incremental sales, tablet-commerce will largely grow by …cannibalizing traditional PC-based retail traffic.

… smartphone-based “m-commerce” also remains highly relevant for retailers. Smartphones are less likely to be used to browse products and make actual purchases, yet mobile devices are increasingly supplementing the in-store shopping experience …to find nearby locations, check hours, and obtain price comparisons. …m-commerce activities are not transactional, they do have the potential to drive incremental sales offline.

… E-commerce is growing at a double-digit pace and many retailers are ramping-up their presences on mobile and online platforms to offset a simultaneous decline of physical store sales. … creating opportunities for retailers that create shopper experiences that seamlessly extend across smartphones, laptops, tablets, in-store kiosks and, yes, the iPad.

The iPad’s nearly 10-inch display is comfortable … for web-surfing and product consideration, overcoming the size restraints frustrating shoppers on mobile phones. … the touch-screen functionality provides a more immediately satisfying and tactile shopping experience. …free from the constraints …they can be comfortably schlepped from commuter trains to airport lounges to kitchen counters, facilitating purchases at every venue.

Little wonder then that tablet sales — as a share of total PC sales — are forecast to nearly quadruple from 2010 to 2015…”To that end, retailers need to ensure that all pages, transaction forms, and form fields render as well from tablet devices as from any other browser,”…

In addition to the iPad, new offerings include the Android-based tablets Samsung Galaxy Tab and T-Mobile G-Slate. …The demographics are particularly attractive … typically affluent and more likely to be spending money online in the first place. Nearly 95% of iPad owners have “solid wealth and strong incomes,” …

Meanwhile, among men with means, there’s been speculation that the iPad will finally make “man purses” an acceptable accessory. …Good luck with that, guys! Perhaps an iPad-equipped woman could help you buy one online.

 

 

 

Edit by HH

 

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Want the impact of Facebook? Then, pay up!

TakeAway: Brands trying to get in front of their customers by utilizing sponsored stories may be surprised to find out where their stories are ending up. 

This latest attempt for brands to utilize free promotions via Facebook prove that there is still a need to pay for the customers’ attention.

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Excerpted from AdAge, “How Brands are Getting Lost on Facebook”  by Brad McCormick, February 22, 2011

… Facebook recently announced the launch of sponsored stories … which allow marketers to insert certain user updates into paid advertisements … another blurring of the line between paid and earned media.

But …brands are stumbling in their quest to be heard on the world’s most popular social network.

… Not all friends are created equal … a principle that social networks have struggled to properly put into practice.

Facebook actually attempted to correct this with…”Top News” featuring the news and updates from your friends that Facebook’s thinks you will be most interested in. … a brand’s presence within a user’s “Top News” is as good as gold because it is the default page.

“Recent News,” is fast becoming the spam folder of Facebook. …with an overflow of updates from “friends” with whom you rarely interact …this is where branded updates are appearing.

… While Facebook’s marketing department may tell Starbucks that another customer’s affinity for a Double Espresso Venti Mocha holds value to its fanbase, Facebook’s Edgerank algorithm may be saying something entirely different. Otherwise, there would be no need to “ensure your fans see the content that your Page publishes” via purchasing sponsor stories ads.

More than anything, Facebook’s announcement shows that is still necessary for brands to pay for a customer’s attention. While that’s not astonishing, for brands to truly leverage the power of Facebook, they need to find better ways to earn it.

Edit by HH

Aunt Jemima wants to friend you … no kidding.

TakeAway: One of America’s oldest brands, Aunt Jemima (established in 1889), launched its first ever social media campaign to show consumers exactly how the pancakes and other menu items from its frozen breakfasts division are made. 

The company plans to have the social campaign “in perpetuity.”  In addition to the Facebook page, there will be a Twitter handle to engage with fans and have a two-way conversation.

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Excerpted from Brandweek, “Aunt Jemima Deconstructs the Pancake (and More)” By Steve McClellan, February 17, 2011

Aunt Jemima purposefully wants consumers to see that the way the company makes flapjacks and waffles is just like they do at home. 

The core of the campaign is a series of videos appearing on the brand’s new Facebook page, featuring veteran Aunt Jemima employees who describe the “just like homemade process” and the people behind it.

The company held a contest to determine which employees would be featured in the videos and they’ll be appearing at numerous events throughout the coming year.

The campaign will also have an extensive online ad component to drive people to the page, where they can access the videos. Coupons and recipes are also available at the page.

The core target: families with harried weekday mornings, or pretty much everybody.

Edit by AMW

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