Google, Internet Marketing, Permission Marketing Seth Godin, Viral Marketing

Permission Marketing

I always thought that Seth Godin, the well known Internet Marketing pioneer, was great writer. He coined the term a revolutionary concept called “Permission Marketing”. The concept severely criticises the traditional advertising method- whether it is TV ads that breaks into the favourite programme, or the telemarketing phone call, it is very intrusive. The goal is to snatch that piece of attention from whatever we are doing, and deliver the message. It might happen when you are watching your favourite movie or even while watching television, interruption is the approach. With the medium becoming increasingly fragmented and limited time, the only way to get through your TG is the noise factor.

The power of Internet as a medium is that extend the onus of decision making to the browser. The medium lets the consumer choose his options. He chooses the sites that he wants to go to, he chooses the content he wants to sample. He chooses the application he wants to downloads. More importantly he interacts and forms a perception. Instead of the interruption marketing, Seth Godin advocates PERMISSION MARKETING, which means that offer consumers incentives to accept advertising voluntarily. The marketer develops relationship, by getting the consent from his consumer and thereby building long term relationship and trust. Here the consumer is the advocate and the medium and advertising is done through the word of mouth, excellent experience and repeated interaction.

I came across the presentation sent by my one of my dear friends and discovered another facet of Mr Godin. This presentation is about Google and how it utilised permission marketing, spent $0 advertising monies, but still is the fastest growing company. Seth analyses the DNA, and goes through few more viral marketing concept of his. Please go through this in your leisure time, though it says 45 minutes, but once you start, you won’t realise the time 🙂 The presentation has an interesting subject- ALL MARKETERS ARE LIARS


Digg!

Add to Technorati Favorites

Advertisements
Accenture, Digital Marketing, Internet Industry, Internet Marketing

Accenture Global Digital Advertising Study 2007

My friend Anuj Anand shared a very interesting report with me last week and as usual i was about to junk it ;). A better sense prevailed and I didn’t regret a bit going through the report.

Though it is called “Accenture Global Digital Advertising Study 2007″and you might think that it pertains only to US (no wonder their local baseball competition is also called World Cup), it does have something for all of us. Coming back to the report, the key takeaways were…

– 79 percent of our survey participants agree that advertising will become more performance-based, as the industry moves towards precise measurement of results, rapidly delivered. This will impose a performance discipline on an industry that has rarely felt this kind of pressure.

– 87 percent agree that analytics will become more accurate and more critical to the business. This shift will drive a decline in the use of traditional success measures — total audience per advertisement — but will enable advertisers to gain increased return
on investment through more accurate targeting of audiences.

– 97 percent agree that advertising relationships with customers will become more interactive, and the other 3 percent say they don’t know, meaning that not a single respondent disagrees. As a result of this greater interactivity, capabilities such as clickthrough buttons on TV will enable a two-way dialogue with the consumer all the way to purchase. These capabilities will also create a more meaningful feedback loop on advertising effectiveness.

– 43 percent of the respondents believe that digital media will become the primary form of programming and advertising content within the next five years, and a further 33 percent say this will happen in between seven and 10 years. The impact of this transition may be
accelerated by the typical pattern that early adaptors tend to be from higher income
demographic groups that are more attractive to advertisers. Traditional advertisers are largely unprepared for the wave of digitally driven change about to engulf them.

– Only 29 percent of executives believe the industry is technologically prepared for the resulting changes in performance measurement. The proportions are even lower in terms
of customer analytics (25 percent), targeted advertising (21 percent) and customer interactivity (13 percent).

– Largely as a result, the highest proportion of respondents (43 percent) believe advertising agencies have the most to lose in the transition to digital advertising, followed by broadcasters with 33 percent.

– Correspondingly, 46 percent believe that online search companies have the most to gain, followed by digital advertising specialists with 19 percent.

– 77 percent agree that advertising will be viewed in an integrated way on three screens — television, computer and wireless handset.

Indian scenario can’t be more rosier. Digital agency Zenith Optimedia expects Internet ad spend to double, from 210 crores 2006 to 450 crores in 2007 and can potentially rise to 2,250 crores mark in 2009 (a 10 times increase). As a share of advertising pie, the share will rise to 6.8%, which was 1% last year. There is another interesting report on digital industry.

It just certifies a fact that we already know, that the advertising industry is facing a radical transformation — in terms of its technological and cultural impact. We need to focus strongly on the use technology to offer advanced customer interactivity. Targeting and analytics are gaining real competitive differentiation.

Therefore the implications for us are…

– If you are a new media company — build, partner or buy systems (sales, reporting, delivery) to support products across three screens and to deliver targeted advertising in privacy-compliant ways.
– If you are a marketer — escalate your integrated marketing and advertising initiatives across three screens, keeping a critical eye on performance metrics.
– If you are a technology company — focus on developing front-end and back-end systems specific to each medium’s unique needs.

If you can’t locate PDF on the net, do write to me and I’ll send you a copy 🙂

Cheers!

Digg!

brands, David Aaker, eBay, Google, Internet Marketing, Orkut, Philip Kotler, RIA, ROI Marketing, SEM, Television, Time spent on internet, Webisodes

Internet- A Sales Channel or a Branding Medium?

A food for thought, it didn’t strike me even when Google was making a presentation on Branding strategy. Spends more on building brands, as the cost of conversions on a brand keyword would be the least (roughly 5-10 times more than your average conversion). So invest in brand and reap benefits, increase your ROI and lower the cost of conversion. Perfect theory, instantly buyable. Another large part of their presentation was on how the brands will be built online- Content, display ads, RIAs video ads. You name it and it is on the internet. As a marketer and a category leader what would you do? Where would you
put the money and how much.

Lets go a little deeper, and recall the definition of brands (a difficult one and to my mind one of the very misued terms). A brand is a sum total of Product’s Physical attributes and its experience and has a name. A strong brand should be able to conjure images and experience (good/bad) in your mind. It is the holy grail of marketing, and in an ideal state, if your brand is big enough, you don’t need to advertise and waste monies (but you do that till you get there). All our B-school course, our strategy is around how to build great brands (Mr Arker has written 4 books on this theme and Mr Kotler tome must be in its 11th edition by now). However, we marketers are still pondering over on how to do it. More so, how to do it online. Or should we not?

Lets consider this small example, TV has 70 million households, and more than 500 channels. The black box has been the greatest invention for marketing so far (in my opinion and have no hard feeling with my other online loving folk). Experiments have proven that a communication has a greater impact and lasting impression when sound and Vision are in tandem. And then came the other inventions Computers and Mobiles (also with screens). And so it happened that someone (and followed by a number of whitepapers) announced the birth of second and third screen (please note that the first screen was television). And marketing was to be dominated by this genre.

In US it started about 20 years back and now they have 50% internet penetration, Singapore is 60% and Taiwan is 90%. For India, I only know the number of users and it also varries greatly, 25 Mln as per comScore, 35Mln as per IAMAI and 45 Mln as per NASSCOM. In short, though our sheer number is high, our penetration is very poor (i’ll update the penetration figures as soon I get it). In India, internet is still not a mass medium. Please consider the time spend by today’s youth on each medium (Source Business World Youth Report 2006, IAMAI 2006)

TV: 124 minutes/day
Newspaper: 30 Minutes/day
Radio: 84 minutes/day
Internet:61 Minutes/day

People do spend time online, where does the communication stick and occupy that little space, which creates a brand. Video ads, Social community, RIA, Viral, Flash Movies and webisodes are the answers. Huge engagement, huge interaction and best of all it is by choice and recommendation (by search engine). But is this good enough to create brands? Good enough to create recall and not to use the search engine to come to the website? Will it be a talking point?

Lot of brands have done it, and have been hugely successful. Google didn’t do any advertising (and maximised PR to its advantage). eBay utilised the online community and so did YouTube and MySpace. Orkut is very popular in India and they did it with 0 advertising.

And the most differentiating factor of our medium is the measurability. Internet is one of the few mediums that can define ROI (Direct Marketing is the other). So now we can use it to define goals and plan backwards to derive the ROI. The campaign have set goals and marketers can now be smarter and more accountable. However, this brings us back again to our moot point, can it create brands. At least in India can it replace TV. And will an emarketer choose Internet whole heatedly to drive the strategy to build brands?


Digg!

Email Marketing, Internet Marketing, ROI Marketing, Web Analytics

First Step (Part 4): Email Marketing

Email Marketing is not CRM; treat this as the most precise communication weapon that you have in your arsenal. EMails are personal and if used using “Recency” concept can deliver fantastic results. This is a bit of cliche, but studies have shown that personalized attention and getting to know when to connect with the consumer increases attachment and relationship (Marketingsherpa). And therefore EMail Marketing.

The conversion of an EMail campaign to a established base can be as high as 4-5% (and more) depending on the product category, which makes it even better than Search Engine Marketing. There are few other advantages…

1. The media spend spend is 0, you will spend only in technology to maintain the Email Platform and maintaining the response and conversion data.

2. EMail Marketing is also insulated from the bid fluctuation due to competition, and therefore the inconsistencies of the response and expected conversion.

3. The targeting is more precise, as the data is completely yours. Ideally you should have all the information- right from age to location and his buying pattern. Targeting coupled with right product mix would work wonders for the business.

4. Faster turnaround and results. SEM campaign will take 2-3 days to kick off, whereas Email can start getting your responses and conversion from the next day itself.

However, before an eMarketeer would reach this ideal stage (where he exactly knows who is he targeting), there’s lot of groundwork to be done. An Email infrastructure requires an immense Technology backbone, coupled with data mining & history of communication plan. The goal should be to create identifiable and profitable clusters. These clusters are the cornerstone of this internet marketing tool, and needs to be studied continuously to determine how much focus should be given to a particular cluster. One of my friends who worked for Citibank direct marketing told me that they had 120 such groups (and is growing everyday). This segmentation is the foundation on which Email marketing works. Though initially traditional parameter like age, education, location, income level etc might dominate, but gradually one should move towards non demographic traits like preferences, tastes, which are more likely to influence the purchase.

The decision on which EMail platforms to go for will torment you for days. Better idea will be to get test account from two-three vendors, before you finally decide one. At MakeMyTrip, we used CATAPULTMAIL, which is the homegrown product of erstwhile Webshatra and now Position2. This is a very basic emailing platform, which helps to broadcast email with nice performance dashboard (# Broadcasted, # Opened, # Links Clicked). There are few advanced ones, notably Dartmail, which has a good relation with all the ISPs and inboxes. The precision and analytics are of very high standard. There are also specialised agencies which deliver this solution, solution integrated. Another late entrant is Epsilon International, which uses Dartmail. They have started an Indian office headquatered in Mumbai.

Before you start sending EMails, you should have a very clear idea of your database profile- total numbers, active base, targeting information like age, location, sex and transaction history (if possible). This should help you to divide the database into few groups and hence target communication. Every campaign that you execute should make you more intelligent about the base, about their preference and about their buying capacity. Here again, I would want to emphasise the need to integrate Web Analytics with the EMail platform, which would help you to measure the response down to the level of conversion. Again, when you use this data to enrich the profile information (in the database) it will make you next campaign stronger.

Though all the above points were in favor of technology and Emailing platform, one shouldn’t ever neglect the power of content, the creative and the subject line. Like all the other form of internet marketing, these too should be optimised. An average open rates is 20% (30% in case of super efficient database) and click through rate (on open) is 15%.

Through EMail Marketing, marketing and organisation overall will not only save valuable marketing monies, which it would have spent to acquire the same users and increase conversion, but also make the brand stronger through a relevant interaction. The method encourages the marketeer to segment and thereby gain valuable and psychographic insights about his consumers and business. What could be a better competitive edge?


Digg!

Affiliate Marketing, Amazon, DGM, emarketing, Internet Marketing

The First Step (Part 3): Invest time in building an Affiliate network

The best part about an affiliate is that they work on remuneration. This is a boon for for an ecommerce site, where the ROI is always under pressure and every quarter, the CMO has to justify the spends.

This model started well before SEM, the pioneers were Amazon; where they rewarded every click responsible for a transaction (read the interesting article here). In Europe, Affiliate Network is a very popular Internet Marketing strategy and even preferred over SEM.

Affiliates use a variety of methods to get the clicks- SEO, SEM, Email Marketing, Display banners to send traffic to your site; but the best part is that you pay only for a purchase. Review and recommendations are other few ways to get relevant traffic which converts. The remuneration can be basis Pay per Action (read conversion) or revenue sharing (% of profits).

There are a number of advantages in starting your own affiliate network Vs joining an existing one. These are…

1. The relationship with the affiliate is stronger and can work in favour of the merchant (the entity which pays for a conversion)

2. The affiliate can work as a partner and not just as a publisher in the network (where he can switch to another merchant the next day)

3. The payment rules (last click/first click/distribution of revenues as over last three clicks) is
more flexible and hence few performing affiliates can be nurtured and honed.

4. The payment process is smoother and faster (and hence the affiliates will be happier)

5. They can be used for a variety of techniques that will help SEO (link sharing etc).

However, developing an affiliate network require a lot of investment in technology and manpower. You will realise over a period of time that it is the relationship that matters and hence the “Affiliate manager” plays a key role in developing the network and maintaining it.

There are also existing affiliate network that you can join (both as a merchant and as a publisher), if you cannot build your own affiliate platform. In India, DGM is the most promising one. They started about a year back, but the superior technology platform, DC Strom, gives them an edge over the others. They are also quite big in Europe.

Which ever route you choose, start you Affiliate Network asap- the sooner, the better ;).

Happy New Year!!


Digg!

Clicktracks, DGM, Digital Marketing, GroupM, Hitbox, Internet Marketing, Omniture, Optimisation, Pay Per Click, Quasar, SEM, SEO, Webchutney, Websidestory, Webtrends

The First Step

What is the first prerogative of an eMarketeer? (Part 1)

A. Online: which includes SEM (which now includes SEO & PPC), Display/Banner advertising, E-Mail Marketing, Affiliate Marketing & Social Media

B. Offline: which includes TV, Print, PR Outdoor and BTL activities.

I belong to a small world of e-commerce, where the business survives on a website. The distribution is through the internet, which is also the first source for reach. Our first point of contact is our website and also it is the final consummation point. The consumers are also limited- a high ticket item, which can be bought only through a credit card (estimated to be 15 Mln in India). We have limited budgets (unlike FMCG/Consumer Durables), and being a start up ROI, every quarter is very important.

So what is the first step toward establishing that revenue generating website? Where should we put the monies, how should we measure the mediums? Please note that this is not a research paper with theta & Deltas, and might not have substantial data points for “Hence proved” formula. These are observations, which can act as handy reference points.

Step 0: Select a good Webanalytic tool
Before you proceed on strategy and define number that you will measure and which will define your ROI, select a measuring tool. You can better your website/campaign only if you can measure it. There are a number of tools available- Websidestory (now takenover by Omniture) is a great tool for eCommerce platforms and offer a wide range of products, right from Site Measurement to marketing performance (to measure SEM, Affiliate and other marketing campaigns). Omniture is a much superior platform, which allows you to measure the Social Media activities (RSS & Blogs) and has very simple dashbaords. They too offer suites for marketing campaigns & SEM, however the price is very steep. One good platform for content platform is Webtrends (we had the trial version of this software and was a good way to start appreciating Web Analytics). All these are real time softwares. There are a number of free tools also available- Google urchin is the most popular (You can use this too and evaluate it against the other platforms). However, the only hindrance is the privacy of data (and more so because I feel Google representatives can access the information. Now that they have vertical specialisation, it becomes even more scary. Clicktracs is another one. DGM also has its analytic tool and claims it to be good called DC Storm. Their affiliate and PPC is through this dashboard, and can be used for site Analytics as well.

Webanalytics will help to…
1. Estimate the daily traffic (and hence the popularity of the site) and the time spent (quite critical parameter for a content site)
2. Estimate the sources of traffic (where are they coming from, which websites) and hence the quality (basis what they do on the site, like on an ecommerce site, conversion is paramount)
3. Understand the navigation (and hence do website optimization)
4. Measure conversion and hence define goals for marketing campaign and site ROIs.

There is tons of data and webanalytics needs to sync in with the business goals if it has to make sense. The implementation of the platform is critical, as before we start relying on its results, we need to be very sure about the numbers that we see on the dashboard. More importantly pick and choose Key Performance Indicators (KPI) which will drive the business. This is not a one time affair, it needs to accessed daily and refined to suit business needs. You might want to check out Avinash Kaushik’s “Web Analytics- An Hour a day”

If you want to know how is your website performance ( and need a second reference point) you can look at audience measurement tools like comScore and Nielson Netrating (not available in India as yet). These are panel based data and works on similar logic as TAM (television Audience Measurement). It will you to corroborate WebAnalytic data for your traffic sources and navigation beyond your site. Hitwise is another superior tool, but like other has no services for India.

Step 1: Search Engine Marketing (SEM)

SEM might have been confused with Pay Per Click about a year back, but now for all practical purposes includes SEO (Search Engine Optimisation). The above is the image from Eye tracking study which reemphasizes, the focus on natural listing (The first image is for Google, second for Yahoo and last one is MSN’s).

SEO is the cornerstone of internet marketing. If your company’s ROI depends on your website, this is the first step towards making it a revenue churning machine. For new to this term, SEO relates to left hand side section (minus the top highlighted portion) on Google and other Search Engine interface. The click on this link is free, and there is not one rule to get to the top. Experiment and try, learn and experiment again. Writing Metatags, having site maps and building links through link exchange is not enough, as Google algorithmis never consistent. You would have to consistently look at numbers and take action accordingly.

You would need to invest in resources and have a special team, comprising of content writers, tech, website designs and a SEO specialist. There is no shortcut, and no blackhat SEO technique (read as spam) that will give you results. Best way is to learn this trick yourself, even the result itself take a long time to come (in some cases more than 3 months). One great resource is John Bettelle’s book “The Search” and his blog http://battellemedia.com


SEO is basis a simple funda- your (read as site) is worth basis how many recommendations (read as backlinks) that you get. In the sphere of social media, getting the site recommendations will gain precedence over the work done by “Google Bots”. Hence if you are looking at SEO, start dirtying you hands with Social Media as well. Gain and nurture well wishers and advocates for your site who will get you that relevant ranking on search engines.

Pay Per Click, is what made Google what it is and changed the way we look at internet marketing. It is measurable, it is very instant and very powerful. Here you can bid the price that you want to pay if a guy clicks on the Google ad, arriving at this price is very scientific and a combination of the part of net return that you can put on table vs your competition and the demand for that product. Invest in identifying these keywords, the moment you start your business. These would almost be like a portfolio of keywords that can act as drivers for your business. If you are regular at this game, you will soon realise how to target the mindset of your TG (by looking at the keyword). But mind you, this is only 20% of the clicks (traffic) rest 80% is free as SEO.

There are good number of agencies which help in Pay Per click campaigns- Webchutney (highly recommended), Quasar and also GroupM (more for brand campaign). If you have crossed 15 lacs as the total spends on Google SEM, you should be looking at an automated solution- Efficient Frontier (highly recommended) and DGM work on these lines. I had also come across on other agency called Net Elixer, which had a similar model. All these platforms have unique optimisation algorithms, which optimise towards a goal. For an ecommerce platform, it is easy, as we are only looking at conversions/products sold. However for a brand advertiser, the goal will be different.

SEO and SEM should work in tandem. Though initially you will have to focus on SEM, as the results come faster and it is fun to see the numbers increase every day. SEO on the other hand will pick up slowly, but very high on conversions (double of what you will get through SEM). SEO and SEM combination works the best. For High conversion keywords, one needs to be present on both natural as well as paid listing. As your SEO campaign starts picking up, you would have to move lower converting SEM keywords into SEO. Over a period of time you will get the best mix which gives the best ROI.


Digg!