Archive: Advertising & Communication

Rezession die beste Zeit für Social Media? [German]

Peter Turi hat ein Video – Interview geposted, dass er mit mir auf dem DLD 09 geführt haben. Darin stellt er solche spannenden Fragen wie:

1) Ist Rezession eine schlechte Zeit für Startups?

2) Wird sich bei den Startups die Spreu vom Weizen trennen?

3) Wird YouTube sevenload verdrängen?

4) Was ist das “nächste große Ding?”

Hier sind meine Antworten:

Interview Turi2 (2009): Interview with Axel Schmiegelow about his entrepreneurship (German) from curtis newton gmbh on Vimeo.

The Future of (web) TV

Reflecting on the current discussions, last at the Delphi Executive conference in Bonn, and at CeBIT which I both attended as a speaker, I recalled the very lively panel at DLD 09 around online video and social media. If you are interested in the topic, the video gives you insights with Brightcove, Endemol, sevenload and Termor Media and a great moderator, David Kirkpatrick from Fortune Magazine.

About the specifics of how we perceive the value of recurring WebTV Content, please check my Interview at ETRE in Stockholm:

ETRE 2008: Axel Schmiegelow describes the sevenload community and “The Future of TV” from curtis newton gmbh on Vimeo.

TV still the lead medium?

In a recent post, emarketer quoted a study by Deloitte stating that TV was still the lead influencer of purchasing decisions by consumers, even in the US.

I beg to differ.

Studies on the share of TV in media consumption do not differentiate enough as to the level of attention that the medium is consumed with. So many households have TV running virtually all day with a minimum of attention as opposed to an online usage that is still predominantly active, targeted (in the sense of the user pursuing a search or e-commerce activity), or socially interactive, that the two types of consumption cannot be equated – it’s comparing apples and pears.

The is all the more true if we consider the demographics, with a larger portion of low-income households letting the TV running indiscriminately. Besides, if you discount the number of TVs running 12 hours a day in Bars and Restaurants, I would wager that in terms of full attention media consumption, online has already overtaken TV.

We lack a study that compares – from the vantage point of an advertiser – conversion rates on campaigns running on TV and non-display-ads online.

The trend will increase with the further roll-out of online video.

Marketing on a tight budget during a recession

The “Gretchenfrage” most discussed in the advertising industry right now is whether we will have a full-fledged downturn in advertising spending across all media, or whether there are niches and segments of the advertising /media industry that could even benefit from the recession. This being the 2nd downturn that I have experienced in my career, I am firmly convinced that the latter will happen.

I make this assumption based on several factors:

  1. A new generation of marketing decision makers now has control over most large budgets. This generation understands the power of digital communication- even though in the past years it has underestimated the potential impact of Web 2.0 and has continued allocating a disproportionate amount of money to traditional media without measuring that performance.
  2. Cutbacks in marketing and sales budgets are rather absurd when the real problem is crumbling sales, but this happens in every recession and it will happen this time around again. Since at the same time marketing performance will be measured more and more in terms of contribution to sales, marketing decision makers will focus on campaign tools and media that either directly or indirectly increase sales performance. Gone are the expensive TV commercials with bikini clad, young beauties on a tropical island, and in comes unsexy sales-driven below the line marketing. The past 2 ½ years have proven, however, that marketing in a Web 2.0 world need not be dreary at all even while contributing directly to sales lead generation.
  3. Web 2.0 advertising formats and communication models have reached a level of maturity and a critical mass among users that allow them to have a measurable impact on brand communication and sales lead generation.

The coming year will see providers of Web 2.0 campaign solutions and media ad placements achieving disproportionate success considering the downturn and cutbacks of media budgets. This will happen for precisely the reason that in the past 1 ½ years many showcases of Social Marketing have been started that have proven or will prove to have been successful to an unexpected degree. After the Beacon disaster these showcases will turn the tide, much in the way keyword advertising established itself in 2002 – 2004.

Our best reference is http://bmw-web.tv, which generated considerable brand awareness for our client BMW. BMW itself doubled that success by creating, at the same time, a national web TV project that was equally successful called BMW TV which greatly enhanced traction to its own site. For confidentiality reasons I cannot give you figures, but trust me the impact was measurable.

Advertisers of the old school often argue that performance marketing or traditional lead generation marketing does not help the brand gain emotional traction and awareness. That dichotomy is of the past. Social relevance, rich media and video formats allow the digital sphere to create a branding experience that is as emotionally compelling as television and as measurably successful as search engine marketing. That has always been the holy grail of advertising, and we seem to have found it.

If you want more information or need help achieving that success, contact me.

Viral Social Commerce for Companies

In my previous post, I tried to describe what I call viral social commerce as the commercial dimension to Web 2.0. This Blog entry will focus on the opportunities and strategic demands that viral social commerce presents to existing companies- especially such companies that have a dominant position in their market. If viral social commerce describes an increasingly commercial nature to the interaction presented by users on the web, then this has deep implications for a relationship between companies and their customers.

On the communication level, much has already been written about the need for companies to go from a broadcast model to an interactive/interaction model, and many companies have already experimented with blogging, viral marketing and other forms of “Web 2.0 marketing”. So far, these endeavors have been met with mixed success. This has a number of reasons- which I will try to sum up in 3 axioms:

1) A day still has only 24 hrs, and our wallets have not gotten fatter.

What this means, is that for all the novelty and increased value in communication that Web 2.0 methods can create in their relationship between customers and companies, engaging in these for more than a fleeting moment of curiosity will require any customer to make a sacrifice of both time and effort to the detriment of something else they’d rather be doing. What this means is that you need axiom number 2.

2) Real people seek real value.

Axiom number 2 is probably the central answer to any strategic or implementation question connected to any type of new technology. Technologies do not usually fail because of technical questions, in fact, the success of technologies is often independent of the quality of the technology involved or its implementation- in other words, abject products are sometimes more successful than perfect technologies (the old, if not entirely true, Microsoft – Apple adage).

Technologies do fail however, when they do not meet a market in a way that creates significant value for a significant value for a significant segment of potential customers. This is the Holy Grail of start-up and business success and it has often been described and is easily worded, but hard to execute.

So cutting back on Web 2.0 technology by seeking not a mash-up of all the functionalities that happen to be the talk of the town and instead looking for ways to create real value with Web 2.0 technologies requires, first, an analysis not of Web 2.0, of these technologies or even of the Web 2.0 early adopter crowd. Much rather, it requires a thorough analysis of the existing market, existing distribution communication channels in those markets and existing or potential customer segments. Then and only then, but then with the strongest impact, can the potential, use and value of a specific Web 2.0 technology be found. This is where competitive advantages are born. This leads me to axiom number 3.

3) Innovation begins with a thorough understanding of the existing weaknesses of the existing market.

This attitude best summarized and methodized in the book Blue Ocean Strategy by Chan Kim and Renee Mauborgne. This approach is at the core of most technological successes and I am more than certain that in the existing wave of new start-ups, those start-ups will succeed which have best understood this lesson.

For companies in existing markets, this means that hunting for the weaknesses of their own methods of communication, of production and sourcing, and of other interaction (for example, service interaction with their customers) and then hunting for solutions to these weaknesses which were before impossible, but can now be enabled by Web 2.0 technologies, is the key to success.

You may find that direct communication with customers or sourcing in of product or feature feedback from customers was, until now, on a snail mail or even E-mail or call center paradigm, impossible to manage efficiently and to link back to the production and design process for some products. In the environment of a web 2.0 community and / or user to user communication interface, this sourcing process, suddenly becomes manageable because of the combination of ratings, feedback and systematic analysis in a technology-enabled low-cost framework. At the very least, such a platform will bind your most active customers.

The task of sifting through all the feedback and identifying the most valuable feedback from customers now does not have to be preformed by the organization alone, but can be delegated at least in part to the community- and this can apply to almost any market.

In the following model, I’ve tried to sum up the paradigm shift that this entails for companies in existing markets. Until now, you had the classic paradigm of production and product identification followed by (retail) marketing and distribution, and the cherry on the top was communicating to customers through combined PR and advertising.

Viral Social Commerce Model

On all levels of that process, a redefinition can now take place by including interaction with customers. At the very least, the communication/advertising end of the classic model of value creation within the business organization can undergo a paradigm shift from communication to interaction that links back into the organization. This is exemplified in the drawing below- and creates a whole new set of requirements for the company including, for example, new tracking tools, new analysis tools and a new mindset in marketing. Marketing then becomes not just a communication task but becomes much more a framework for the company’s role as the

host of a community of customers.

These are the concepts that we’ve been working on for years now at denkwerk and which we try to reflect in our everyday work for our clients, such as Nokia, Obi and other retail giants. This paradigm shift leads to surprising successes each time the department of the company we are working with and we are mandated to not only think, but also act in a radically different way.

“Quo diata Diferenta”??- as Guy Kawasaki puts it.

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