Disscuss Marketing

As Podcast Ad Biz Sees Static, One Firm Shifts Focus

2007-08-26T02:22:00.000-07:00

When it comes to placing ads in video and audio podcasts, how dynamic does the serving need to be? And do marketers care about the exact number of impressions they bought, or is "number of downloads" an adequate metric? A recent move by podcast ad management firm Podbridge suggests the answers to those questions may be "not very" and "downloads will do."

Through a new partnership with Limelight Networks and an ad distribution relationship with MSNBC, Podbridge has reduced its dependence on a dynamic ad insertion and measurement method it pioneered. In doing so, the company may be signaling a belief that marketers don't require the ad management standards from downloadable media that they do from other interactive channels.

Podbridge distinguished itself early on in the area of ad management for downloadable media by going beyond measuring only the download rate for podcasts. It also offered, via a plug-in, knowledge of exactly which podcasts and ads had been heard and which had languished in a user's iTunes library. Perhaps most importantly, Podbridge also supported dynamic insertion, so if someone hits play on a podcast three weeks or three months after downloading it, the ads remain current.

Now, Podbridge is partnering with Limelight to access its content delivery infrastructure and serve online ad campaigns without requiring a server-side installation from publishers or a client-side one from end users. For publishers who choose to go this route, the Podbridge plug-in will not be used, with the result that ads will be neither measurable by impression nor served on the fly.

"Advertisers are willing to pay just for downloads," said Podbridge CEO Murgesh Navar. "For certain types of content, measurement of downloads equals measurement of views."

For instance, when a consumer doesn't watch a podcast they've subscribed to, iTunes eventually stops downloading new episodes. "Downloads becomes a close proxy to views," Navar said. "We do not need the ability to change the advertisement because the content expires as well."

Additionally, he noted it may be superfluous to offer dynamic ad insertion for news programming such as that offered by MSNBC, since "there's hardly any chance someone's going to watch it three months or six months from now." MSNBC offers video and audio downloads of shows like "NBC Nightly News with Brian Williams," "Meet the Press," and "Countdown with Keith Olbermann."

Indeed, NPR and other current events driven podcasters have had success selling sponsorships and ads based on download metrics and hard-coded corporate underwriting announcements.

Podbridge still plans to offer publishers and advertisers a sample-based measurement of actual ad views by tracking subscribers who have already installed its plug-in. It will also continue to provide its plug-in and server-side solution for publishers that want it.

"Podcasting started out being a long-tail behavior," said Navar. "What you're beginning to see here is that this medium is now being embraced by brand name publishers. It's something marketers are extremely comfortable with."

MSNBC will sell its own ads for insertion using Podbridge's system. Podbridge also offers a podcast ad network with partners such as BBC and Clear Channel radio.

Video Game Sector Boosts Online Ad Spending

2007-08-26T02:20:00.000-07:00

Mention video games in a conversation about interactive marketing, and in-game advertising immediately comes to mind. Yet video game publishers are online advertisers in their own right. And while interactive ad spending from this sector was for several years less than what one might have expected from an industry focused on the young and hyper-digitized, its investment in online ads has increased of late.

"Our budget's growth year-on-year has been in the double digits," said Ubisoft Senior Manager of Digital Marketing Paul Caparotta. "Our spends are rivaling print, we're seeing tremendous growth."

Spending on display advertising for Ubisoft increased from $1.6 million in 2004 to $2.6 million in 2005 and $3.2 million last year, according to data from TNS Media Intelligence. In the same time, the publisher's TV buy dwindled from $16.1 million in 2004 to $13.8 million in 2006. Ubisoft did not release figures on actual spending.

The budget shift has been echoed by other publishers. Electronic Arts' online display ad spend topped $5 million last year, according to TNS. TNS tracked video game publisher Capcom's online spend for 2006 at nearly half a million dollars, up from $388,000 in 2004. The TNS data do not include rich media, video or other non-display formats.

"It is a huge priority for EA, and has been a growing priority over the last five years," said Carolyn Feinstein, VP of consumer marketing at Electronic Arts. "We spend close to 20 percent of our media online."

Rich media and video units are common online media placements for many publishers, but building a brand identity often includes microsites, viral marketing, search, and the creation of entire communities. Budget allotments to fuel these campaigns for many companies have come directly from other media.

Each campaign is dynamic, and game publishers see themselves as progressive when it comes to execution. "One of the things I think is great about video game marketing and video gamers in general [is they're] open to ground-breaking media applications," said Ubisoft's Caparotta.

Gaming industry Web sites often serve as the foundation of video game industry ad campaigns, though certain game releases are aimed at a broader audience and include media buys on non-gamer sites.

"It's a balance," said Caparotta. "With the next generation of hardware… we are finding more video games are becoming pervasive, usage is growing, and mainstream sites are becoming more of a target for us."

Microsites are often a focal point of these campaigns, as was the case with a promotion for EA'sMadden Franchise last year. "Advertising took you to that site, and it was a place you wanted to go back to every day. We try to employ that tactic a fair amount," said Feinstein.

Community also plays a key role. Capcom launched a CAPCOMunity channel in the past year to provide a pipeline of early and exclusive information to its fanbase. Visitors get exclusive peeks at new titles and can read blogs authored by Capcom staff. "A lot of our activities are now linking back to CAPCOMunity," said Jack Symon, director of brand marketing at Capcom.

Capcom built its community in addition to individual Web sites for each brand, which the company calls brand worlds. These follow an entire franchise, including various games, licensed goods such as action figures, and TV and movie titles associated with each game series.

For the release of "Rayman: Raving Rabbids," Ubisoft created a hub on MySpace where it put up videos of the game's characters, and accepted user generated content. Work on the campaign was done by AKQA, and Ubisoft said it "fulfilled all the ROI benchmarks we established," Caparotta said.

Online advertising provides a deeper level of communication not easily achieved on other channels. "We use online advertising to tell a high-impact message," said Feinstein. "The online space keeps directing them to deeper and deeper interaction."

Is There a Market for Dynamic Ad Placements in Downloadable Media?

2007-08-26T02:15:00.000-07:00

ClickZ published a story today on a move by Podbridge, a podcast ad management and ad network firm, to expand its offerings beyond a dynamic ad insertion and measurement method it pioneered for downloadable media. By allowing hard-coded ad placements and the measurement of mere downloads (as opposed to actual ad views), the firm seemed to suggest there's a stronger market -- or at least an unignorable one -- for static ad placements versus dynamic ones.

After the article ran, Podbridge CEO Murgesh Navar reached out to me to affirm his belief in the ongoing potential for dynamic ad swapping in downloadable media. Here's what he wrote:

Now that the monetization of the medium is being proven by the front running news/info content it is time for the evergreen content to come into podcasting. But evergreen content has the requirement to swap ads "after" download. The requirement here is "dynamic at play" and measurement of play. Our iTunes plug-in solution addresses this as a complement to our [Limelight Networks] integrated ad serving.

Mobile Advertisers Embrace the iPhone

2007-08-16T11:37:00.000-07:00

Are declarations about the iPhone changing mobile an overstatement? Perhaps. But Omar Hamoui, CEO and founder of mobile ad network AdMob, said the iPhone is definitely opening some exciting doors.

"What's important for mobile advertising is, obviously, to have the eyeballs or user base to consume the advertising," said Hamoui. "The original assumption behind the iPhone was you can browse the entire Web on your iPhone. What a logical person would think, therefore, was that the iPhone was going to have the same advertising you see on the Web. So why would a company design special ads for the iPhone? There is no need."

But Hamoui, whose company just released a special ad unit designed for the iPhone, said the assumption was wrong.

Just because iPhones have browsers capable of rendering the "real" Internet and not just WAP sites doesn't mean there's no need for ad units specially designed for iPhones. "We run a mobile ad network," he said. "We started to see a significant amount of iPhone traffic on those formatted-for-mobile sites," said Hamoui. "On top of that, we started to see a whole bunch of applications for iPhone, Web apps, being created."

He noted Facebook and Netvibes just announced iPhone-enhanced interfaces.

Additionally, companies began asking AdMob about creating ads specially-designed to take advantage of iPhone's unique features. "There are a whole host of consumer sites coming out with iPhone- friendly spaces, plus we were getting requests to our sales force asking, 'How can we engage with iPhone users?'"

Apple's new gadget isn't cheap, so companies can safely assume iPhone owners have money and are willing to spend it. That makes them a demographic worth targeting. "We saw supply from publishers and demand from advertisers," noted Hamoui.

AdMob's new iPhone ad unit allows interactivity that can't be created on other mobile devices. "It's a much more interesting and enriched type of mobile advertising than we could do before," said Hamoui. "Because the iPhone has Javascript, the iPhone ad units are capable of doing sophisticated stuff."

For example, AdMob's new iPhone ad unit for Starbucks includes a Starbucks ad that, when clicked, slides down allowing the user to enter a Zip Code. Doing that opens the iPhone's Google Maps application which directs the owner to the nearest Starbucks.

The key to making iPhone-enhanced mobile ads is to allow them to leverage the Safari browser's functionality without using too much bandwidth, said Hamoui. The AT&T EDGE network being used by iPhones isn't the fastest. "What we're really doing is basically taking advantage of a full-featured browser and just making the interface iPhone-sized, making it lightweight," he said.

Clearly, AdMob is not alone in hopping on the iPhone bandwagon.

Ingenio, which operates a pay-per-call ad network, recently released an application for the iPhone called TouchCall. Company CMO Marc Barach said TouchCall simplifies phone number searching for iPhone owners. "Simply tap on a button that says 'florist' and connect to a florist in a given market," he said, noting the searches are also monetized by Ingenio audio ads.

Then there's HarperCollins, which just announced it is making digital book content available for the iPhone platform in a program called Browse Inside. The company said it will initially offer iPhone-enhanced samples -- the first 10 pages of chapters one and two -- from 14 new books. The books can be purchased or pre-ordered right from the iPhone.

"The Browse Inside feature for the iPhone is part of the ongoing effort to advance technology, and allows mobile consumers to tap into the power and convenience of online book discovery," said HarperCollins in a statement. "We are excited to be a part of it."

Double Fusion Adds Web Properties to In-Game Network

2007-08-16T11:22:00.000-07:00

Video game-centric search engine Wazap enlisted Double Fusion to sell and place advertising on the U.S. version of the site. Inventory on Wazap allows Double Fusion to extend advertiser reach through integrated packages, the companies said.

"Our focus is on delivering the largest gaming audience possible to advertisers, and allowing advertisers to have multiple touch points to gamers, including in-game, around-game, and select Web opportunities," Double Fusion President and CEO Jonathan Epstein told ClickZ News.

Double Fusion's sales force may leverage Wazap to offer sweepstakes and promotions that don't necessarily work well in-game. "A number of our advertisers say they love in-game, but want to collect names," said Epstein. "By providing a platform such as Wazap, we can provide deeper programs, sell better ad buys."

Similar to other in-game ad networks, Double Fusion typically sells to consumer brands, an advertiser group Wazap is eager to court. "Double Fusion has the best footprint for talking to consumer product companies who want to reach gamers directly, not just in the game," said Thom Kozik, president of Wazap U.S. Kozik said Wazap provides a venue for richer interaction not possible for ads running in games.

In-game advertising placement is Double Fusion's focus, though it handles Web-based advertising for a handful of sites, including in-game and Web ads for ijji.com's "Rounders Poker." Advertisers get one unified report. In addition to custom deals like promotions and sweepstakes, ad units include standard IAB formats such as leaderboards and skyscraper units, as well as rich media plcaements. Larger ad opportunities are possible.

"We are looking for opportunities to do roadblocks, where we can do sponsorships of sections or genres on the site for a particular advertiser," said Kozik.

Wazap, a vertical search engine for video gamers, launched in Japan and Germany in 2003 and in the U.S. earlier this year. Double Fusion has an existing international presence, and eventually could expand its representation of Wazap to include its international sites

Microsoft Driving Game Promotes Live Search Maps Service

2007-08-14T18:31:00.000-07:00

When you're driving down the Strip in Las Vegas and you get crunched between a Mad Momma in her green station wagon and a Golden Oldie who laments he "doesn't have any insurance," then adds "there's nothing like the feel of some new support socks and the open road," don't worry. It's all part of Microsoft's latest effort to introduce users to its Live Search Maps Web site.

Microsoft, with its agency EVB, has created Live Derby 2007 as a "Pac-Man" style game where players can drive their car along city streets and pick up points while avoiding other drivers like Mad Momma, Golden Oldie and others. What makes the game different from other maze style games is that the mazes use actual Microsoft Live Search Maps of San Francisco, New York, Seattle, Las Vegas and London, complete with satellite imagery. The "power-boost" locations players can drive through to charge up their cars are actual locations in those cities, and players can click on those destinations to access the real listings using the Live Search Maps interface.

"You have these maps and it's only so exciting, but you add an element of a chase or a maze to it makes it more interesting," said Nick Mitrousis, an associate technical director for EVB who worked on the game. "You're playing with real world data. The links are right out to Live Search."

Microsoft has often sought to get its brand name noticed through more traditional banner and text ads; the company decided to create a game using Live Search Maps to reach out to users in a new way.

"We actually didn't want consumers to think about it as just another marketing initiative being pushed at them, we wanted to give them a great game experience and share it among their community," said Kevin Hagwell, senior product manager for Live Search Maps for Microsoft. "We wanted to show the real information because that's the value of the product."

The challenge of getting people interested in mapping technology led digital agency EVB to consider how to "integrate all the features of the maps but do it in a way that is really fun," said Daniel Stein, CEO of EVB. "It's easy to do advertising that talks about the features of a program like Live Maps, but the truth is with a virtual product like that you really need to show it and draw people in to involve them."

Microsoft Seals aQuantive Deal, Creates New Ad Solutions Group

2007-08-14T18:29:00.000-07:00

Microsoft has completed its acquisition of aQuantive and created a new Advertiser and Publisher Solutions group to focus on its ad platforms and the advertiser and publisher community.

The new division will have responsibility for nearly all of Microsoft's ad platforms and services, including Atlas, DRIVEpm, MSNDR, Microsoft AdCenter and aQuantive's agency arm, Avenue A / Razorfish. The new group will also have control of an Emerging Media Group which includes in-game advertising firmMassive and mobile ad firm ScreenTonic.

The APS group will be run by Brian McAndrews, CEO of aQuantive, who will report directly to Kevin Johnson, president of Microsoft’s Platforms & Services Division (PSD). Also reporting to Johnson is Steve Berkowitz from the Online Services Group, which includes the MSN.com portal, Windows Live services and Live Search, and Satya Nadella from the Search & Advertising Platform Group.

AQuantive co-founder Mike Galgon has been named chief advertising strategist and will report to McAndrews. As part of the Emerging Media Group, the Massive and ScreenTonic divisions will report to Cory Van Arsdale, who in turn will report to Karl Siebrecht, president of Atlas.

Additionally, MSN stalwart Yusuf Mehdi has been named to the newly formed post of senior vice president, Strategic Partnerships in the Platforms & Services Division.

The company also stated that following the completion of its acquisition of AdECN, CEO Bill Urschel and his staff will report to Alex Gounares, corporate vice president, adCenter and Commerce, under Satya Nadella’s Search & Advertising Platform group.

Both aQuantive's and AdECN's employees are expected to maintain their current offices in Seattle and Santa Barbara respectively.

One holdout in the consolidation of advertiser-facing services and technologies in the APS group is Microsoft's Digital Advertising Solutions sales force, which will continue to report to Berkowitz in the Online Services Group.

JCPenney Goes Back-To-School with Reality Webisodes

2007-08-14T18:28:00.000-07:00

As the school year approaches, one of the oldest and most iconic department store brands is reaching out to kids in a new way; it's creating its own online teen reality show.

JCPenney is working with creative agency Saatchi and Saatchi New York to create "Flipped," a reality show hosted on the department store's Web site at www.jcp.com/mixitup. The premise of the show is to follow several teen cliques at a New Jersey high school and watch as students spend time with groups other than their own. Hosted by clothing designers Chip and Pepper Foster, "Flipped" is intended to introduce the idea of mixing up different styles of clothing available from JCPenney.

"That was the idea in creating the series…why don't you mix things up and try something different?" said Matthew Atkatz, interactive creative director for Saatchi and Saatchi New York. "We know that kids are incredibly savvy and sophisticated about marketing messages today, so we were looking to reach to them in a more authentic voice. We also really wanted to communicate in the medium that kids spend the most time, which is the Internet, so melding reality TV and the Web was natural for us."

"Traditional media is still a huge component of our campaign" said Kate Parkhouse, a JCPenney spokesperson. "We're going to have our print and television ads, but every year we look at the landscape and see [what] are the more innovative ways to reach kids."

To promote the site itself, JCPenney is running television commercials, print ads and in-store promotions. It's also running movie trailers combined with a mobile advertising component, and online advertising at sites including Yahoo Music, Seventeen and Cosmogirl.

"Flipped" has an eight episode run, with each episode released weekly, so the site has "a lot of repeat viewers," she said, which brings a "stickiness to the sitelet."

In addition to the Webisodes, the min-site also includes fashion tips, contests, the campaign's TV spots, profiles of the show's participants and an online store.

"Today the younger consumer is more engaged in the digital format. And it allows them to be engaged with the JCPenney brand as a whole. It's more than shopping; it's getting to know the brand though the sitelet," said Parkhouse.

Heavy.com Joins Publisher Network Ranks

2007-08-14T18:26:00.000-07:00

Joining the ranks of media companies forming their own ad networks, New York-based Heavy.com is starting one for video content. Like those others, Heavy hopes to monetize traffic to sites outside its own, and compete with ubiquitous ads served through the Google AdSense network.

The new Husky Network, launched in public beta, will allow publishers and bloggers to make money off their videos by having them supported with national brand advertisements similar to the clickable ads that surround the clips shown at Heavy.com.

Heavy refers to the CPM-based ad unit as the "Video Skin;" videos play in the center of the screen while wrapped in a stationary, billboard-type ad or sequence of ads. New Line Cinema is the first advertiser to sign up with the network, rolling out ad campaigns for the new films "Mr. Woodcock" and "Shoot 'Em Up."

"We've taken the video skin unit and said, `Now we can put it on video players anywhere,'" said Simon Assaad, co-founder and co-CEO of Heavy. "The publishers can make money out of our video skin unit as well." The ad format works with any video player, including YouTube, Revver, Google and others. Advertisers will have access to "specific psychographics" and vertical networks that include music, gossip-entertainment and action sports.

Assaad said Newgrounds.com is one Web site that is taking part in the beta testing of the new network. "We are talking to about 30 other publishers who we expect to sign up and announce over the coming weeks," he added. Heavy will take a 50 percent cut of the ad revenue, according to Assad, who expects the ads to be priced at CPMs of around $10 to $15.

Heavy is aimed primarily at 18- to 34-year old men. Advertisers on its broadband network include Coors, Nissan, Panasonic, Diesel, Axe, Sony and Nike. While the site is popular with its main demographic, Assaad acknowledged there are many other Web sites frequented by young men. "Not all guys are going to spend all their time with Heavy.com," he said. "Some of their time is spent elsewhere." Heavy hopes to earn revenue even when its loyal visitors wander off to other online locales and view videos supported with ads served by the Husky Network.

In creating the network, Heavy is joining other Web companies that recently launched ad networks, including Glam Media, Washington Post.com, NBC Universal-owned iVillage and, just last week, MSNBC.com, through a relationship with Pulse 360. In announcing its new "Publisher's Vertical Network," MSNBC said it aimed to give small sites an option other than ad networks like Google AdSense.

Assaad said there is a big demand for ways to monetize Web content, including video. "What is happening is there's been this explosion of publishers and video makers on the Web with the easy availability of cheap and easy-to-use technology to build sites and make videos," said Assaad. While these publishers can easily set up sites and post videos, they lack the ability to sell ads, he said. "I am selling really premium advertising across a network of smaller sites that just don't have the infrastructure to sell their own advertising," said Assaad.

He said the key to the network's success will be its ability to aggregate. For example, Assaad said a small, independent Web site that publishes action sports videos might be able to attract up to 400,000 unique users monthly, not enough to justify an in-house sales team. "But there are a lot of advertisers who want to be around action sports," he said. "So maybe we have a million people a month that go to our action sports channels on Heavy. But if we can gain another two or three million by aggregating [with sites outside of Heavy], that would make it one-stop shopping."

Unknown Modavox Targets AOL's Tacoda to Cash in on Patent

2007-08-14T18:21:00.000-07:00

Tacoda's pending acquisition by AOL may have been a catalyst for a new patent infringement suit filed against the behavioral targeting firm. Modavox, an online broadcasting media production firm-turned-software provider, has over the past few months sought to identify patent infringement suit targets, of which Tacoda appears to be the first.

Modavox Thursday announced it had filed a suit against Tacoda in US District Court for the Southern District of New York, claiming the behavioral targeting firm has violated its patent on a

"Method and System for Adding Function to a Web Page." The so-called business method patent covers a technology that serves up customized multimedia content and advertising to Web users. Modavox, a public company, was granted the patent in 2003 under its former name, SurfNet Media Group; the patent application was filed in 1999.

"We really were focused on Tacoda a long time ago when they came out with their whole business model," said Modavox CTO and Chief Product Officer Nathaniel Bradley. "Tacoda is one of many potential infringers out there," he added, noting Tacoda competitors such as Revenue Science, AlmondNet and others are also possible lawsuit targets. "It's impossible for us to sue everybody," he said.

Tacoda is reviewing the Modavox complaint, according to Tacoda CEO Curt Viebranz, who said the company does not comment on active litigation.

In May, Modavox hired intellectual property law firm Fox Rothschild, LLP to represent the company in patent enforcement efforts. The tech outfit commissioned the person behind the patent in question, Andrew Burgess, to study potential infringement suit targets in March. Modavox aims to "create revenue around licensing," said Bradley.

Bradley said he believes Tacoda considered Modavox's technology when developing its own behavioral targeting system. "We have a hard time believing…we weren’t part of their due diligence, their thought process, along the way," he said.

Though Bradley stressed Tacoda has been "on our radar" from the "outset," he admitted AOL's recent agreement to purchase Tacoda got the lawsuit ball rolling faster. "With that filing we felt a sense of urgency," he said. AOL agreed to buy Tacoda last month for $275 million to bolster the behavioral targeting capabilities of its Advertising.com ad network and on its own properties. Tacoda launched in 2001 and refers to its technology as patent-pending.

"Industry consolidation gives patent owners larger and deeper pockets to sue…even though financially stronger defendants also increase the odds of better-funded litigation defenses," said marketing tech law pundit Eric Goldman, Assistant Professor at Santa Clara University School of Law.

Last year Modavox was pondering the viability of a patent infringement revenue model, according to a November 2006 SEC filing stating, "We have recently been approached by a third party to discuss whether it is feasible to pursue suspected infringement of our Modavox Central patent. We currently do not know whether infringement has occurred or the conditions, if any, under which we might pursue this suspected infringement."

It appears as though Modavox has been interested in boosting its interactive software industry presence over the past year or so. The company, which opened a new Interactive Media Division facility in Las Vegas in March, purchased Kino Interactive early last year, adding to its rich media delivery capabilities. v"We're a bit of an unknown," Bradley said, adding, "We haven't spent any money on PR or marketing."

The company provides audio and video content and ad delivery services to Gannett's AZCentral.com and Detroit Free Press, among other sites. Coincidentally, Tacoda enabled behavioral ad targeting for Gannett's USAToday site until discontinuing its publisher-side targeting service.

Since the US Patent and Trademark Office began awarding business method patents to the likes of Amazon.com, eBay and Priceline.com, such patent filings have been increasingly subject to controversy. The patents are used for technologies for things like data processing, and even education and training. In 1999, Amazon was awarded a patent for its "1-Click" online transaction system, and soon thereafter it sued Barnesandnoble.com for infringing on the patented system.

Local search site Local.com was awarded a patent last month covering a method for voice and mobile directory assistance. The company said it will look into charging competitors with patent licensing fees.

Expect more efforts to enforce patents, said Goldman. Noting a general increase in patent litigation, he told ClickZ News, "I would anticipate more patent enforcement even without industry consolidation."

Share of Voice in Search

2007-08-13T01:20:00.000-07:00

Advertisers familiar with offline advertising metrics will now find a recognizable metric available in their Google AdWords interface: a share of voice (SOV) proxy called impression share (IS).

According to Google, SOV is "a relative portion of inventory available to a single advertiser within a defined market sector over a specified time period." The search giant defines "inventory" as the impression inventory available against your campaign based on your keyword and campaign settings. In addition to IS, Google has also released two related metrics: Lost IS (Rank) and Lost IS (Budget).

You won't find the new metrics in AdWords' campaign management section at either the ad-group or campaign level, but under the Reporting tab. To see IS data:

1. Select a "Campaign Performance" report.

2. Within the "Advanced Settings" area, select "Add or Remove Columns."

3. Select "Impression Share (IS)," "Lost IS (Rank)," or "Lost IS (Budget)."

SOV's History

SOV has long been used in offline advertising. It was typically calculated as a percentage reflecting your total ad spend against your competitors' total ad spend. A more accurate measure of SOV in offline advertising would be to base the share calculation on the share of ad impressions against the target audience. Alas, this number was far more difficult to calculate, so percentage of total spending within your competitive set became the standard.

No one in the mainstream agency world ever had a satisfactory answer as to why one wouldn't adjust for efficiency. After all, if you were twice as efficient in buying media, your true SOV would be twice that of your competitive set when calculated using media spending. This is an important point to remember when using IS and the other new metrics provided by Google.

Using Google's New Metrics

In Google's case, the IS and lost IS metrics are useful in ways similar to the offline SOV. However, there are limitations in how you might use this data, not the least of which is the dramatic difference in the value of PPC (define) ad impressions within a SERP (define) based on position.

Common sense, CTR (define) data, and the eye-tracking study we did with Enquiro a couple years back all prove top center positions are far more likely to be noticed by searchers, making this impression dramatically more valuable. This goes back to that question to my supervisors years ago: why don't we adjust for efficiency in SOV?

Yet the data can be very useful in identifying poor campaign settings that may be causing low-value impressions while missing more valuable impressions (and clicks). If you have plenty of budget to spare, don't really care about efficiency, and have a high IS, congratulations. You're in the minority. Most advertisers are stretching their limited budgets as far as possible.

If your impression share is low, consider weeding out less valuable or (even better) less relevant impressions from your campaign. These search impressions could be tuned out by dayparting, ad scheduling (days of the week), geotargeting, adjusting match types, or keyword tuning. By eliminating impressions from the bottom (based on click profitability or relevance), you raise your IS without actually spending any more.

A side benefit may be impressions lost due to a low AdRank (based on Quality Score times bid) improve due to enhanced relevance. Google specifically identifies which impressions were lost due to low rank and which were lost due to campaign budget caps. If the lost impressions were due to a poor AdRank, raising the bid would help, but it's always cheaper to look for Quality Score improvements. Of course, you must take into account the value of the time spent tuning the campaign for improved Quality Score, but the benefits of an improved Quality Score are cumulative for as long as any campaign is active. This can be quite significant on high-volume campaigns.

More data is always better, so long as the data are actionable. When looking at Google's new SOV metrics, start on the most material sections of your campaign first and experiment with tuning there, where it matters most. The ad groups in your campaign's tail may be less significant in the overall picture and can probably wait. Those tail ad groups may also be less competitive, meaning your SOV is already higher.

My team and I have been using and will continue to use SOV and share of clicks data we have in a proprietary system that uses both client and comScore data. It's nice to see the engines are finding ways to make this data available as well.

Google vs. Microsoft: Beyond PPC

2007-08-13T01:18:00.000-07:00

Today, we'll look at the broader interactive marketing ecosystem, the competition between Google and Microsoft, and how this competition may affect the future of targeted PPC (define) (and CPM (define) or CPA (define)) advertising. Someday soon, the SERP (define) will be the smallest part of your digitally targeted media buy. That's why the broader battle between Microsoft and Google matters.

Microsoft still leads in productivity software for consumers and information workers, as well as in desktop operating systems. Recently, there's been lots of buzz in the press about Google and its foray into Google Apps, which provides free Web-based apps (they eventually may be ad supported) that compete with the Microsoft Office suite.

While Google's applications are usable, they won't be a significant threat to Microsoft unless Google also starts delivering the functionality in downloadable client-side software, due to the limitations of SAAS (define).

However, Google could decide to emulate the alternative desktop office suite providers, such as Corel, with its Office Suite, or private-label a free version of the open-source OpenOffice. Then it would indeed be going head-to-head with Microsoft's software-plus-services strategy, which envisions a world of software where you can be equally productive running applications and accessing data on desktop software or via Web services and the "cloud" (meaning the Internet).

The software-plus-services program is application and file interoperability and a set of applications that are agnostic as to whether you're working on your desktop or via a Web browser. The name, though, is an unfortunate selection because many sophisticated techies don't assume it describes Web services but professional services. This holds true even within the Microsoft partner community, which I had a chance to interact with at a recent Microsoft Worldwide Partner Conference (WPC). Even some Microsoft employees don't seem to know what the Web services are and are therefore confused as well.

To minimize this confusion, Microsoft should consider coining -- and therefore owning -- a completely new phrase for applications delivered seamlessly, locally, and across networks while being device-agnostic (i.e., working seamlessly with PC, mobile, game console, and set-top box platforms). Trademark and rights issues aside (money solves these), I suggest the following terms (listed in order of personal preference) to communicate Microsoft's flexible vision of the future, along with their current trademark/domain owners:

* Anyware (owned by Secuware in Madrid)

* Flexware (unused domain; the company may be dead)

* Flexiware (owned by a domain speculator)

Microsoft won't likely choose a clearer descriptor to illustrate this evolution in software to a multidevice, multilocation paradigm but will instead spend billions in media to educate the masses and its partners about software plus services.

I found WPC to be quite instructive. It reminded me that while I might be considered geeky in the media world, there's a whole other world of technologists that keep the computers humming, the software stable, and the data flowing behind the scenes in every kind of business you can imagine. Those Microsoft partners help determine what business data is available within their client organizations and how it's stored.

My key takeaway from the conference was there's a massive shift in the way consumers interact with software, content, entertainment, and information, as well as how they communicate with each other. In this new ecosystem, data are the key that enables marketers to target consumers as they use their many devices. With data comes complexity, and success in the marketing arena will be earned by those who best manage complexity and are able to focus on proper execution over the next several years.

Thomas Edison once said, "Vision without execution is hallucination." Microsoft COO Kevin Turner modified this slightly: "Strategy without execution is hallucination" (and not for the first time). This reminder of what might seem obvious is very relevant to search engine marketers, as well as to the portals. There are lots of great ideas, tactics, and strategies out there, but prioritizing the ones that make a difference then executing them is critical for success.

SEM Immaturity Threatens Industry Future

2007-08-13T01:06:00.000-07:00

The search marketing industry is immature. I'm not just referring to the fact that nearly all the companies engaging in search marketing are less than 10 years old. The industry is also immature in the way "partnerships" are created and maintained.

Successful brands and successful marketers, be they manufacturers, retailers or catalog merchants, nearly always manage offline marketing by establishing long-term partnerships with their agencies, suppliers, and even media providers. These relationships don't always work out, of course, but there generally exists a mature understanding that in order for the company to thrive and grow, an investment in success requires both sides of the relationship to work hard to achieve agreed-upon goals and objectives, many of which will not be easy to deliver. Some initiatives take time to bear fruit; others rely on aggregation of experiential data, as well as learning by both organizations.

My hope is as search engine spending becomes more material and as senior management begins to fully understand the true value of attracting search visitors to their sites, an increased level of maturity will manifest itself on both the agency and marketer side of the equation. Unfortunately, strong relationships between SEMs and clients currently seem to be the exception, not the rule. Both marketers and agencies seem to display an alarming degree of immaturity in regard to what it takes to forge a successful partnership.

This malaise can be partially explained by the fact most PPC search spending continues to be managed in-house without the benefit of any kind of partnership at all, according to surveys conducted by both SEMPO and Marketing Sherpa. Of the 3,000 marketers served in Marketing Sherpa's PPC Survey (a larger sample than the SEMPO survey), "73 percent say they're using in-house staff for PPC paid search." The SEMPO study (conducted by Radar Research) broke results down by company size, using number of employees as the gauge. Sixty-three percent of companies with fewer than 500 employees manage paid placement search in-house; for companies with over 500 employees, this number drops to 39 percent.

There's hope in that there's a 24 percent difference in the in-house/agency ratio between small and large advertisers. It may be larger, more mature companies have developed a firmer understanding of what their competencies are, and can therefore better determine the correct share of search tasks that should be outsourced. But the story doesn't end there. While senior management may correctly understand the missed opportunities typically associated with in-house management of a non-core function, those at lower levels of the organization tasked with managing external relationships report they'd prefer to bring SEM (and SEO) in-house. This dichotomy in outlook between strategic thinkers and tactical implementers may explain why there's a high level of SEM provider churn, even among larger advertisers.

The SEMPO survey went on to delve into satisfaction with paid placement SEM services and found "just one-third of respondents said they were happy ("moderately" or "very") with their SEM agencies for paid placement campaigns. More than a quarter of respondents are unhappy ("moderately" or "very") Two out of five advertisers report "mixed results" when asked for their satisfaction level."

Why are so many advertisers unhappy? One could be tempted to blame SEM agencies for providing poor service. Perhaps these agencies are indeed providing service levels insufficient to help their clients compete in an increasingly-competitive marketplace. One cause of this may be that SEM agencies face the same labor shortage issues that plague the marketers attempting to staff qualified in-house search teams. The result is that many agencies simply cannot deliver the level of service required to hold onto an account.

But SEM agencies don't bear all the blame. Like serial daters or serial divorcees, marketers who report being disappointed after trying numerous SEM agencies must own up to their own mistakes, which include:

1. Poor Agency Choice Marketers rarely have a mature decision process capable of truly evaluating SEM agencies based on the underlying business needs of the organization.
2. Unreasonable Expectations Paid placement search is complex, and also hinged to the competitive set and how rational or aggressive the competitors are in the auction marketplace. Battles waged in this environment are both offensive and defensive. "Standing still" may require considerable effort and expertise to defend against competitors seeking to capture market share, ROI, profit, or other success metrics. Unless marketers approach this environment with a thorough understanding of its peculiar features, the result will be disappointment and SEM agency churn.
3. Unwillingness to Pay an Equitable Price Success in paid placement search may take more work that a standard discounted fee structure will support. Sure, marketers naturally seek to keep these fees low, and many agencies go out of their way to secure new businesses by meeting such demands. But low fee structures may preclude the partnership from evolving because they prevent the SEM agency from supporting the strategic needs of the client.
4. "Dating Mentality" and a Short-Term Horizon Depending on the state of an existing campaign, it may take time to lay the foundation of change to extract maximum value from it. Doing this requires a longer-term horizon than many in the industry currently use when evaluating campaign performance. In addition, changing SEMs or moving SEM responsibilities from in-house to an outsourced basis is a process that must be carefully managed.
5. Unwillingness to Communicate The time for marketers and agencies to communicate is when things aren't going well. When marketers give their agencies "the silent treatment" while waiting out the terms of their contracts, valuable opportunities are lost on both sides of the equation.

I hope and expect that as the SEM industry matures, agencies and advertisers will take a deep breath and approach their relationships as partnerships. It may take some healing time to bring this situation about. Many marketers I speak with tell me they consider themselves "burned" by their prior SEM agencies. Relationships between marketers and agencies are like personal relationships: bad experiences and bad memories can poison them and limit one's chances of finding a successful new relationship. But with maturity, one can see good relationships can provide fulfillment, adding up to a sum greater than the constituent parts.

It's taken decades for this level of maturity to evolve in other industries, and paid placement is only now finishing its first 10 years. Much healthier, more productive relationships lie ahead.

Obsessed With the Competition

2007-08-13T00:59:00.001-07:00

If you're like most marketers, you obsess about what your competitors do. The emergence of PPC (define) search, where position directly affects traffic volume and the popularity of position checking in SEO (define) have only strengthened the focus on competitive metrics and benchmarks. More established third-party data sources, such as comScore (which recently went public), Hitwise (recently purchased by Experian for $240 million), and Nielsen, are joined by relative newcomers Compete and Quantcast, as well as specialists such as AdGooroo. All these businesses exist to quench marketers' thirst for competitive data.

Averages and relative data can be helpful, but they often get in the way of the strategic decision-making process marketers must engage in to win in ultra-competitive markets. I often get e-mail from readers and others in the industry that requests benchmark data, such as average CPC (define), average conversion rate, and average ROI (define). This obsession with the competition has both healthy and unhealthy effects on marketers and their campaigns' focus.

The important thing for marketers to focus on is opportunity. Some competitive data may help determine the potential opportunity for efficiency or growth, but beating your own baseline numbers is a requirement to transform a campaign into a profit-driving machine.

Some of the greatest success stories in auction-based online marketing are driven by a balanced approach of watching and learning from the competition while focusing on continuous improvements in value identification and extraction from the media opportunities that exist in the PPC and media exchange markets.

Landing Page and Average Consumer Myths

When you test landing pages, the objective is to improve marketing metrics over the current baseline. Important metrics typically include conversion rate, order size, order profitability, lead quality, and predicted customer profit (lifetime value). Landing page tests are often highly fruitful because they allow you to move the needle on one or more key performance indicators. Yet many landing page tests fail to achieve dramatic improvements.

Solving for the best average landing page by lumping all visitors into the same category results in a user experience that's OK for the average consumer. But there's no average consumer! Each consumer is somewhat different from the average and responds to different messaging, has different price sensitivities, and is in a different stage of the buying cycle. A personalized approach will result in better overall campaign and landing page efficiencies than an attempt to solve for the average consumer.

There are many ways to look at an inbound clickstream and hypothesize whether a segmentation experiment might yield a positive result. Keywords are the segmentation mode we think of first. Chances are that's how your campaign is organized, perhaps based on branded keywords, product keywords, and research keywords. But keywords are just the beginning.

Geography is a great way to segment consumers. For multichannel retailers, consumers' geographic segments may be driven by the concentration of stores within a specific geography. Perhaps those close to a store convert by shopping offline and want to check stock in a store, while those who aren't near a store shop purely online.

In offline marketing, one of commonest ways of segmenting consumers is based on the time of day. Dayparting in search isn't necessarily just about buying the higher-value clicks; it could just as easily be about understanding which consumers visit your site at different times and how the user experience may need to be adjusted to reflect the different consumer preferences, needs, and desires.

At conferences and in discussions with prospective clients, I rarely hear about landing-page testing. I recall only once or twice that a marketer has included any kind of visitor segmentation in the testing model. Everyone uses averages, but when you manage a campaign exclusively based on averages, you doom the campaign to mediocrity (average performance).

The same holds true for your obsession with competitors' CPC prices and conversion rates. Just as you control your conversion rate by being more or less focused on high-converting segments, your competition can adjust its level of aggressiveness when buying early- or late-stage clicks. A better strategy is to use your own campaign as the benchmark: a baseline that you strive to beat.

Put another way, you'll outrun the competition better if you stop looking behind you.

Which Test First?

2007-08-13T00:45:00.000-07:00

Increasing numbers of experienced search marketers are realizing that paid placement search is far from a set-it-and-forget-it channel. The competitive search landscape shifts constantly, searchers change habits, and the search engines' bidding structures, algorithms, and interfaces evolve. To stay on top of the landscape and ahead of the competition and to continually improve ROI (define), a campaign must change as well. You must know which changes to make and what you have to test.

Regardless of whether you manage your own campaigns or have your agency manage campaigns for you, there are always tests you should be running. But since all tests involve the time and costs of planning, executing, and analysis and the to-do list of possible campaign changes, enhancements, and tests is always long, it's an ongoing challenge to decide which campaign features to test first.

Where do you begin?

Start testing the campaign segments that can make a significant difference in profitability. Whatever part of your campaign will make you the most money is the element you should test first.

With that, I'll go through the cost-benefit analysis of different types of testing. I'll start with the engine-side experiments -- experiments that deal with your keywords and how your ads appear in the engines. Then I'll move into experiments that touch on the site itself. Finally, I'll look at testing out new search technologies.

Engine Side Experiments

Keyword expansion. The most commonly recommended engine-side experiment is keyword expansion. Yes, keyword expansion is an experiment. Some keywords will work well, others will fail.

Before you revisit keyword expansion, think about whether you've already hit the point of diminishing marginal returns. At some point, the additional work to generate keywords further down the long tail, and tuning the creative for those new keywords (assuming you aren't using dynamic keyword insertion), isn't worth the costs of the labor and testing involved.

Meanwhile, broad and phrase match (or in Yahoo, Advanced Match) are designed to capture tail keywords you haven't explicitly included. Some engines are better than others in the way their systems implement broad matching, but at a certain point, ads and campaigns are sufficiently relevant for the searcher that keyword experimentation isn't the best use of your time.

Creative testing on power keywords. All engines now reward a high predicted CTR (define). If the engines think your ad will be well clicked, they'll let it appear at a higher position, without a higher bid cost.

That's why power keywords, the keywords with high click-through volumes and rates, are more valuable than ever. Effective creative on a power keyword makes that keyword work even harder, both at bringing more visitors to your site and at getting the better predicted CTR you need. This is why testing creative on power keywords -- an often-overlooked test -- can yield dramatic results.

Start creative testing on ad groups that contain power keywords, because this allows you to capture material gains (assuming the experiments are successful). Then, work your way down your keywords based on total inventory (popularity of the term), keeping in mind your typical conversion rates.

For example, if two keywords are equally popular and one already has a higher conversion rate, test new creative on the highly converting keyword first. Any gains are multiplied by the high conversion rate. That multiplier is almost like compound interest.

Campaign reorganization. Campaign reorganization is another often-overlooked test. It may be as simple as moving keywords out of ad groups that contain too many unrelated words. It could also be something quite complicated, like an entire restructuring of an existing campaign based on data collected about conversion rates or click quality.

Restructuring power keywords is, of course, more likely to achieve a greater positive outcome than restructuring your tail keywords.

Site-Side Experiments

Landing page testing. Landing page testing and tuning is the most popular site-side testing, and with good reason: a poor landing page experience can cause the site visitor to use the dreaded "Back" button.

When a paid-search visitors hit the "Back" button (which happens a lot), you've just paid for visitors who got nothing out of their visit -- and who didn't convert through your site. What's more, they may have clicked the "Back" button because you gave a poor branding experience, which is never something you want. To ensure landing pages are effective, you've got to test them.

The rules for prioritizing landing page testing are the same as for keywords. Start testing on the campaign segments that can make a material difference in profitability, then work your way to the tail.

Offer testing. Offer testing is an offshoot of landing page testing that relates specifically to the offers you provide on the landing page. In some cases, offer testing needs to be done in conjunction with creative testing, because searchers expect to see offers that are relevant to the ad they clicked on.

Technology Enhancements

Every month there are seemingly more technology enhancements you can bolt onto a site or use to handle clicks. Based on tests from my internal teams, some of the latest enhancements show significant promise.

However, use the same top-down rule when evaluating any add-on technology. Ask yourself, will that technology have a material impact on the campaign?

Remember, review your campaign with a top-down perspective, and prioritize experiments based on their likely impact on the campaign.

A final point: In cases where you're working with an agency, many of these tests require coordinating the agency and in-house teams. Make sure everyone brings unique expertise and knowledge to the testing process for the best results.

Presidential Primary Underdogs Send E-mail, Too

2007-08-11T23:57:00.000-07:00

The best-known presidential candidates -- Hillary Clinton, Rudy Giuliani, Barack Obama and John McCain among them -- get most of the attention. But the fact is those who haven't made it to the top of the polls, as well as the popular yet unofficial candidates, are still campaigning. And, of course, they're sending out e-mail to supporters and campaign watchers.

With help from e-mail tracking firm Email Data Source, ClickZ News took a look at some of the Republican and Democratic primary candidate underdogs and the e-mails they've sent since the beginning of the primary campaign cycle this spring. Themes common with the more popular campaigns were evident among the lesser-knowns. They, too, had links to donate, featured or linked to video of recent appearances or events, and petitioned supporters to get their friends involved with their campaigns.

One interesting thing to note: Campaigns for Republican candidates or would-be right-leaning candidates sent out far fewer messages than their Democratic counterparts. For instance, former Tennessee Senator Fred Thompson and Texas Congressman Ron Paul's campaigns sent just two e-mails this year, while ex-U.S. House Speaker Newt Gingrich put out six e-mails to registrants of his Newt.org site. Neither Thompson nor Gingrich have declared themselves officially as primary candidates; however, much speculation abounds about each, particularly Thompson, a star of NBC's "Law & Order."

The underdog Dems on the other hand have been prolific in the e-mail arena. Connecticut Senator Chris Dodd sent 19 messages since April, New Mexico Governor Bill Richardson's campaign distributed 22 e-mails in that time, and Delaware Senator Joe Biden's campaign sent 32 e-mails to campaign observers since May of this year.

Each campaign, like the more prominent candidate efforts, had its own individual approach. Some jammed e-mails with a variety of issue-based ideas and commentary, and others took a more bare bones tack. Perhaps the two polar opposites in the style category were Congressman Ron Paul and Newt Gingrich, both fringe Republicans. Paul's spare messages mimicked press releases; they were nearly all text, and stuck mainly with messages of momentum building. Gingrich's, on the other hand, featured lots of images, and read like dense diatribes on multiple political issues while keeping with the overriding theme of government bureaucracy.

Thompson, yet to officially throw his hat in the ring, wrote of testing the campaign waters. The would-be candidate kept with his typical casual approach, even making mention of baseball and football. Senator Dodd promoted the Democratic CNN/YouTube debate and his participation in the annual liberal blogger grassroots YearlyKos convention. Governor Richardson stuck to issues like troop redeployment in Iraq and global warming. Meanwhile, though issues were a regular focus for Senator Biden, the most recent messages from the perennial Sunday morning political talk show guest featured media alerts touting upcoming TV appearances.

Fashion Industry Gets a Whiff of Web 2.0 Marketing

2007-08-11T23:42:00.000-07:00

The apparel industry has long been a holdout to online advertising as other categories commit ever more dollars to the medium. Now that may be about to change, as several agencies and digital properties have begun courting fashion marketers with digital ad offerings.

A new division of Ketchum, a unit of Omnicom Group, is ramping up a service called Fashion Interactive 2.0. The new initiative will deploy brand evangelism, social networking, word-of-mouth, blogging, podcasts, and mobile communications to reach consumers, and -- the company promises -- deliver measured ROI to marketers. Other current efforts by "paper doll" avatar site Stardoll and, yes, a Second Life agency, aim to snare the attention of fashion brands.

Jeff Danzer, VP and group manager at Ketchum, explained that Fashion Interactive 2.0 will focus on "how to keep a brand fresh in the eyes of consumers, going out where they live and where they play." Without sharing many details, he said the agency's formula includes outreach to brand evangelists, content creators and consumers who frequent social shopping sites like This Next and Kaboodle, which was just acquired by Hearst. The agency is currently in talks with apparel companies, but has not identified any clients yet.

Ketchum is better known for its PR work on behalf of a roster of tech clients than it is for building programs around clothing brands. Fashion Interactive 2.0 practice head Danzer's professional background includes the development of the brand and marketing strategy behind the men's underwear brand 2(x)ist, and the designof iBoxer, a line of men's underwear with a pocket for an iPod. When those projects earned him the nickname "underwear guru," Danzer sought to apply his expertise more broadly to the apparel category, and to interactive campaign development.

Though it's early, that may prove a wise choice. Earlier this week the founder and CEO of Kaboodle, Manish Chandra, told ClickZ News that the fashion category is now the growth leader on e-commerce and comparison shopping sites.

Virtual communities in particular appear ripe for fashion marketing. Clothing manufacturers like American Apparel have created storefronts in Second Life, and H&M is providing its clothing collections to EA's "The Sims 2" though the expansion pack "The Sims 2 H&M Fashion Stuff."

And this week, Stardoll, a virtual community for teen and tween girls, opened StarPlaza, an interactive galleria where girls can spend "Stardollars" to outfit their avatars, called MeDolls, with real-world fashion brands. Stardoll already has celebrity boutiques with promotional merchandise from Hilary Duff, Avril Lavigne, and Swedish pop singer Darin.

Additionally, Second Life-centric marketing firm Dynamedia is seeking brands to help develop what he calls VirtuReal, a shopping mall in Second Life where Founder and President Antonio Collier says visitors will be able to shop for real-world products.

Questions for Ari Paparo, VP of DoubleClick Rich Media

2007-08-11T23:37:00.000-07:00

DoubleClick's rich media and video unit has morphed considerably in the half-decade it's taken for rich media to reach its current adolescence. Its Motif self-serve rich media platform, launched four years ago, initially struggled in a market full of demand for customization and services -- a demand that only increased with the adoption of video advertising. To rectify the shortcoming, the company purchased Klipmart in the U.S. and Tangozebra in the U.K., both of which offered consulting and production services along with their packaged video and rich media ad products.

According to Ari Paparo, VP of DoubleClick Rich Media, the acquisitions brought the firm "a services DNA we may have lacked before."

Paparo leads the charge on all of DoubleClick's rich media, video and mobile initiatives. On the cusp (in theory, anyway) of DoubleClick's acquisition by Google, ClickZ caught up with him this week to discuss the direction of DoubleClick's video efforts, the trend toward large-scale ad production, and the firm's nascent mobile ad management product.

Q. How many video ads does DoubleClick serve in a month?

A. We don't give out volume figures generally. The only source that is consistent is Nielsen, and we don't agree with their reporting. According to all the figures, as far as we can tell, we're the second largest rich media vendor. We claim we do the most video on the Internet. Our primary competitor [PointRoll] claims otherwise.

Q. What's the split of your revenue from ad serving versus consulting and production services?

A. The offering we give to the market is almost always combined. There isn't really a big market for pure technology services. Almost every client wants us to be involved at some level in a consultative fashion.

In addition, post-campaign we get very involved in analyzing the result and recapping what worked and what didn't. It's a very high services model, and it has to be because these are the most expensive ads on the Internet.

Q. Assembling and targeting many versions of an ad on the fly has become something of a theme this year, with the launch of Yahoo's SmartAds product, Digitas restructuring to facilitate offshore digital ad production, and Spot Runner and Visible World offering similar capabilities for TV. Can the principle be applied to online video and rich media ads? How much of this are you doing today?

A. We've participated in a large number of campaigns that have some element of dynamic visuals. We have a partnership with ShopLocal in Chicago. They have a database of local offers. We jointly developed a product for them called SmartMedia to have similar ads that dynamically [serve product offers based on] zip codes according to what's available locally.

Some of our clients on the publisher side who have more context about where the ads are showing are also doing something similar to the Yahoo announcement. We definitely see this as a trend. It's particularly interesting in certain verticals, such as automotive and telecom. We're also working on it with movie showtimes.

Ultimately I don't know if the model is going to be more of a Digitas model, with mass customization, or if it will be data driven.

Q. What else are you incubating now?

A. We're looking at a lot of areas. We're seeing more clients interested in widget advertising. Q. Really? Is there a place for DoubleClick in the widget world?

A. Is there a widget world, or is it just an advertising world? We have a joke that one day we're going to hire a VP of widget technology. It'd be a short-lived career.

Q. In seriousness though.

A. The operational aspects of rich media leave lots of room for improvement. Lastly, we're doing some interesting things with data. Rich media has the capability to offer some interesting metrics. As of yet that data hasn't been used to tell an interesting story. [For instance], you know what percentage of clicks results in a conversion, but to what extent does an interaction or expansion result in a conversion?

Q. I know DoubleClick doesn't comment on the pending acquisition by Google as a matter of policy, but I wonder if you could speculate a little bit on the potential role a video ad division could hypothetically play within a large search-centric organization with an enormous contextual ad network.

A. No comment.

Q. What DoubleClick's doing with mobile ad management?

A. We haven't officially launched our product. We're in beta with an ad serving product for mobile devices.

Q. Is it a publisher-facing or advertiser-facing product?

A. With all these emerging markets, we always start with the publisher side, and then we look to create an advertiser product based on that experience.

Q. So DoubleClick has no interest in mobile media sales?

A. Doubleclick's general position is that it's a technology vendor. We enable people to sell direct. In any channel there are networks. Generally what happens is those media companies, as the volume increases, they want to take the sales direct. That's where we play a role.

The Marketing of Mobile Content

2007-08-11T23:32:00.000-07:00

Mobile phones have a whole life beyond voice. Consumers are after content to personalize their phones, and entertain them when they have a moment to spare. Demand for premium mobile content including ringtones, wallpapers, music, games, graphics, video, and adult content is expected to reach $20 billion in 2007, and surpass $44 billion in 2011, according to a recent report by research firm iSuppli.

Making all that content discoverable via powerful search and ad products is starting to become a big business, and an area of fierce competition.

While pure play companies like JumpTap and Medio have long offered search platforms both on and off the carrier decks, Web search companies are now eyeing the space. The Wall Street Journal reported last month that Google is working with mobile content firms to build and index its mobile content search platform. Google declined to comment on the launch, but ClickZ spoke with several mobile marketers and content sellers -- some close to the project, some not -- about what the new search product will look like, how the marketers of mobile content will likely be able to leverage it, and how the business of marketing mobile content is evolving in general.

At a very macro level, some wireless marketing executives feel a content search play from Google would draw more advertisers to mobile and bolster mobile Web use in general, which until recently has seen only incremental adoption.

"Search is a no-brainer for mobile content companies," said Enpocket CEO Michael Baker. "Google's entering the market is good, both in terms of validating the category and also attracting new advertisers to the medium. What Google will do is bring more reach, bring the Google audience who wasn't using the search bar on AT&T or Verizon. It's good for the market and its incremental unique reach."

Others say not so fast, since Google's going up against competitors who have years experience making such content discoverable and established relationships with mobile operators. "Google is playing catch-up, which is something they aren't used to," Mark Donovan, VP of products and senior analyst at M:Metrics told ClickZ.

Companies like Motricity, a mobile content management company, have worked with Google for as long as 18 months to index and test the new search product. "They are going to be indexing all the mobile content sites," said Motricity CTO and GM Jud Bowman. He added Google is "creating a much more integrated approach; it will work from the PC or the Google browser on the phone."

Google would likely not take a cut of sales based on organic search results. Rather, Bowman expects the integration and behavior of a mobile content search from Google to take a form similar to that of Froogle, which became Google Product Search.

"At least out of the gate, we're going to use our existing payment methods," said Bowman. Motricity connects to carrier's billing systems to charge customers. That means carriers will still get a cut of all revenues generated – even perhaps those sourced with Google. Content purchased through any advertising, however, could still use a different payment method.

Improving the mobile search experience would help solve one of the biggest problems for content owners, as well as any WAP site publisher: driving traffic to the site. But there are other ways of achieving the same goal, including by advertising in other channels. "We are seeing a proliferation of mobile calls-to-action on non-mobile advertisements," said M;Metrics' Donovan. "Everybody's familiar with the dial-this-number to vote for 'American Idol,' but we're seeing some part of those formats in other brands and products."

Companies like "MTV and BET leverage their strength," to market their mobile content across channels, according to Bowman. "Millions of people are watching TV every day. When you watch a music video on MTV, and other channels, they have a pop-up screen to text in to get the ringtone."

Delta Faucet Directs E-Mail Flow

2007-08-11T23:30:00.000-07:00

Getting close to the customer is most marketers' goal.

But for many business-to-business (B2B) marketers, there's often a go-between involved: a distributor, reseller, or advisor who has the closer relationship with the client. This can create an e-marketing challenge since the e-mail's sender line is so important to getting e-mail open.

Should the e-mail come from the larger company with a well-recognized global brand or the intermediary who's actually in touch with the client?

Delta Faucet solved this conundrum by creating what e-mail marketing manager, Kim Biggerstaff, calls "on your behalf" e-mail.

Delta doesn't have a direct sales force. Instead, it has a group of sales managers who work with independent sales agencies who act as manufacturer's reps. These sales agents call on wholesale plumbers, builders, architects, designers, and other wholesalers in their geographic region.

Since the sales agent actually call on clients, Biggerstaff decided the e-mail messages should be sent by them, not Delta.

To preserve the Delta branding and ensure the messages are on strategy, Biggerstaff creates the e-mail messages herself with the help of her agency, Ohio-based Hanson Inc. and her e-mail service provider, ExactTarget.

She works on creating a "really beautiful e-mail that is very much on brand, on strategy" and locks in all the main components, except for an area of personalization for the sales agent. Here's a typical "on your behalf" e-mail.

The sales agencies choose the e-mail messages they want to send out, import their own list of contacts from their local market, then add a custom paragraph or signature. The e-mail messages are sent out under their own names, such as marketing@salesagency.com. The product branding is accomplished in the subject line.

Any responses go directly back to the sales agency itself for follow up. However, Biggerstaff is able to track open and click-through rates, which are both above industry averages, and beyond the results Delta usually achieves. The open rates are one and a half times the industry average, and the CTRs (define) are three times the industry average.

To find out whether the e-mail messages generated revenue, Biggerstaff had to rely on anecdotal feedback from the sales agencies, which was more difficult to pin down.

But the feedback she did receive suggests a very successful campaign. One sales agency reported an e-mail opened the door to a new client and generated a six-figure sale. Two other sales agencies wrote orders from new clients who had never bought Delta products before. In addition, Biggerstaff received many calls from sales agencies that told her they loved the e-mail campaign.

The "on your behalf" e-mail messages were originally sent as a test and proved beyond a doubt to Biggerstaff that her hunch was correct. Customers would rather hear from a sales agent they know on a local level rather than a global manufacturer.

In essence, the message seems to be: "Think globally, sell locally."

Compare and Contrast: SEM and SEO

2007-08-11T23:29:00.000-07:00

Marketers and the media prefer simplicity. Search engine marketing (SEM) is not, of course, simple. If SEM and SEO (define) were simple, traditional marketing agencies could slot SEM into media plans with little thought or effort. SEO consulting wouldn't differ from site design.

Yet SEO and SEM have spawned a multimillion dollar industry, even a trade organization, SEMPO. In their quest to simplify SEM, many members of the media and company executives prefer to look at its challenges as a single problem. In fact, a host of variables influence an SEM campaign's success or failure.

One simplification marketers, the press, analysts, and even some agencies succumb to in an attempt is to drop organic SEO and pay-per-click (PPC) SEM into the same bucket. So let me clarify.

Poor SEO is primarily a problem of several digital hurdles that inadvertently block search engine spiders from doing their job. Spiders are on a mission to:

* Find quality content.

* Identify that content and separate it from extraneous information.

* Grade the content for clarity.

* Extract the essence of a site's content on a page-by-page basis.

* Grade the content for source reputation.

* Understand the content's context in respect to the Internet as a whole (assign communities or explore relationships between content and sites).

* Catalog the content's URL.

* Keep the content cache fresh.

Generally, 90 percent of SEO relates to removing obstacles to the search engines finding and understanding the content's essence. Having an under-optimized Web site is like having a broken window; it can be fixed in a reasonable and finite length of time.

Realistically, if content isn't relevant you can't achieve long-term visibility in organic SERPs (define). Sure, black-hat SEO techniques may work for a while. But, a search engine's mission is to deliver the most relevant results to searchers. You need a plan to remove all obstacles to an engine finding and grading content while understanding its essence.

Once a site is search engine friendly, 90 percent of the site-side SEO work is done. True reputation management, online PR, and content freshness based on seasonal search behavior, as well as trend adjustments, are ongoing processes that will enhance a search engine friendly site.

Paid SEM: High Maintenance

Paid SEM is very high maintenance, not a set-it-and-forget-it business. Skill sets required for planning and executing paid search campaign management are different from those required for SEO, particularly early-stage SEO, where problem areas are identified and roadblocks to search engine friendliness removed. The technology needed to maintain excellence in paid search are also very different from those required in organic SEO.

Commonalities

What, then, are the commonalities between managing and optimizing for both organic and PPC search? They're primarily linguistic, analytic, and behavioral in nature. They include understanding:

* Keyword research and cross-utilization of keyword data for SEM and ongoing SEO

* Buying-cycle factors and how they relate to keywords and sites

* Visitor behavior within sites for organic and paid traffic, particularly conversion behavior

* Seasonal keyword search factors

* Linguistic analysis of query strings

* Conversion factor analysis

The above relate to improved user experience through understanding visitor needs as expressed by search queries.

Paid search's true differentiator is requiring a combination of immediate and reactive action. Immediate action is often based on data that are available for analysis on a real-time basis, such as bidding activity. With our industry's evolution beyond pure search, the number of variables under a marketer's control is growing. These include landing pages, creative presentation and offers, and additional factors that are different for every business, depending on what specifically drives optimal user experience.

Over the next year, I predict continued competition within paid placement search will result in a whole new generation of strategies and tactics. They'll take best practices in paid search further away from organic search.

Organic search is simultaneously centered around both the spider and the visitor, with a preference given to the spider (a non-search-friendly site means no visitors). Paid search is all about maximizing efficiency by applying direct marketing principles. Each variable is considered and tested.

What are the chances the same page built for Google, Yahoo, and MSN spiders is the absolute best page for a paid-search landing page? Pretty slim. Spiders and humans have different needs, wants, and desires. Likely areas of divergence include copy length, format, flow, and tone; navigational diversity and priority; and graphic richness.

Organic and PPC search teams will undoubtedly work together. In smaller companies, they'll be the same person, in the same way marketing directors in smaller companies handle PR, marketing, advertising, and promotion. In larger companies, where both types of search are mission-critical, specialized professionals will be hired, as either an outside agency or in-house staff.

Jupiter Research (a Jupitermedia Corp. division) data seem to validate part of the trend toward outsourcing mission-critical paid search. ClickZ News reported on the recent Search Engine Marketing Agency Constellation report. Analyst Nate Elliot confirms this trend toward professional agencies managing larger spends: "Agencies account for 51 percent of the total spending on paid search -- a significant increase over the past 18 months."

Will the same agencies that manage PPC budgets also assist in organic SEO efforts, or will the specialties diverge due to SEO's front-heavy workload requirements? Time will tell.

More Information on Google Maps for Local Business Listings

2007-08-10T20:11:00.000-07:00

I just updated my Google Maps information and if small businesses are not using this free service (especially in situations where local/regional relevance matters), than they are missing out on a great opportunity. I wrote a post documenting the general process for business owners to submit information to Google Maps before, so I’m writing this post as a logical extension, highlighting the process of updating business information.

Updating Your Google Maps Submission
For whatever reason, Google has decided that my business name is “untitled“, which probably is an issue when it pertains to click-thru rates and the overall brand awareness of my company. Since I changed my mailing address the other day as well, it made sense to go into my account and make some edits.

When the user logs into their Google Maps account, they need to click the link (at the lower left-hand side) which states “Add or Edit your business - Learn More” (see screenshot below). I personally found that to be a poor user experience, but that is probably because they figure the majority of Google Maps users will use the service for other reasons. There are a couple of key features that I briefly want to list, which add further value to the business listings service:
It’s possible to bulk upload business listings, which can be especially valuable for businesses with multiple locations or storefronts.
Google also provides high level impression data, showcasing how many impressions your business listing had in the last 30 days.

Screenshot of Google Maps login screen

I needed to edit my business mailing information, so I proceeded to edit my listing. Google offers two options for verifying your changes: a standard postcard mailing or a quick phone call. I chose the phone verification and here is a quick synopsis of the ease of use with the system.

Phone Verification
The user states whether they want to be called now or 5 minutes from now (I chose “Now”)
Be wary that Now really means NOW and that means that you have to have immediate access to the business listings number that have for your company information. If the phone connected to that number is not immediately available, I recommend “waiting 5 minutes”.
The web page displays a verification code, which is needed for submission via an automated system (that is calling).
Once the verification code is entered, the web page refreshes and confirms your submission. Google states that there is a 4 week delay in business listings updates, but the business listing information indicates that the submission is “awaiting updates”.

The entire process of updating information took less than 5 minutes of time and the phone verification was instantaneous (like I said above, there is approximately a four week waiting process for approvals. I highly recommend that small businesses (especially those that are closely correlated to regional/local search habits) spend the time to get their business listed with Google Maps, it’s a free service that is easy to use and takes little time away from everyday business operations (and it’s free, in case you missed that).

Google’s Matt Cutts Talks About Web Address Management

2007-08-10T20:06:00.000-07:00

Stephan Spencer reveals some key insights from Matt Cutts’ presentation at WordCamp 2007 last week in San Francisco on the CNET News Blog. One of the major points is that Google will begin to recognize underscores as word separators, which had not always been the case. That means that the usage of the term “search_engine_optimization” in a web address historically would not have been read by Google as “search engine optimization” (it would have been read as “searchengineoptimization”). Traditionally, incorporating hyphens in keyword specific terms is the SEO best practice for creating keyword sensitive web addresses. That being said, it’s unclear if Google is actually incorporating this functionality now, or in the near future, so I would still recommend using hyphens in the short term (if you are currently implementing keyword specific web addresses).

Web Address Management
A couple weeks ago I wrote a post on best practices for search engine friendly websites, which included web address management. Echoing some of my thoughts related to SEO best practices for web addresses, Stephan (and Matt Cutts) also reveals:
Query strings can be read by Google, but Matt cautions against more than 2 or 3 parameters.
The number of slashes in a web address are not an issue with Google, but it may be an issue with Yahoo and MSN.
File extensions are not an issue with search engine crawling and indexing.

My recommendation with all of these things is to invest the time in making your site as accessible as possible for search engines to crawl and index your content. That means that if you are currently using dynamic URL’s or excessive folder directories, invest the time to fix these issues as soon as possible. The goal here is to get search engines like Google to understand and index your material as fast as possible, with as few kinks and potential roadblocks as possible.

Getting It Straight From the Horse’s Mouth
If you are attending conferences or seminars with actual members of Google (or Yahoo, MSN or anyone with documented expertise for that matter), it’s incredibly valuable to receive confirmation of these types of issues straight from the source. I recently was having dinner with a few colleagues and we were discussing a Google presentation we attended and this key point really hit home with me that night. As search engine marketers, we often learn and educate ourselves about ranking and search engine related factors through reading, testing and experimenting (not on client’s sites of course) and our conclusions often get drawn from the results, building on the years of experience and knowledge overall. Getting confirmation from the people behind the scenes (or for that matter, trusted people with more experience than you or I) is incredibly valuable as an ongoing best practice for quality search engine optimization and search engine marketing.

A Quick Notification to Readers of Cape Cod SEO

2007-08-10T20:05:00.000-07:00

I just wanted to write to let readers know that my goal for regular postings on Cape Cod SEO will be weekly at best for (more than likely) the duration of the year. It’s not that I do not have ideas for posts but several other obligations have arisen that need attending to.
I’m actively writing and managing the KoMarketing Associates Search Marketing Blog, which I recommend checking out and providing feedback, thoughts and comments - I’d love to hear what you think. The blog focuses on SEO, PPC and online marketing, with at least two or three of us contributing on a regular basis.
The current client workload has been hectic and (fortunately) it should remain as such, but that by itself would not really prevent me from writing regularly.
A couple personal web development projects have arisen, which are a priority for a decent amount of free time. However, a lot of the learning and development going into these projects are certain to lead to quality content for this blog in the near future.
Finally, a new house and a baby daughter on the way towards the end of this year seem to take up some time as well. Living at 100mph is the only way to live

Two Points of Reference Related to Search Engine Marketing

2007-08-10T20:03:00.000-07:00

Search Engine Glossaries

Search Engine Land recently published a quick post highlighting SEO and SEM Related Glossaries for marketers, website owners and anyone else interested in the world of search engines and search engine marketing.

-A Complete Glossary of Essential SEO Jargon, SEOmoz
-Search Engine Marketing Glossary of Terms, SEMPO
-SEO Glossary, WebmasterBrain
-SEO Terms Glossary - SEO Acronyms - SEO Abbreviations, SEO Consultants
-The Search Engine Marketing Glossary, SEO Book
-Search Glossary, Search Industry News (Seth is only 4 letters in as of the writing of this post, but he’ll get there soon - and he’s building a pretty nice reference list here)

Top 25 SEO Related Blogs
In addition, Daily Blog Tips recently published an article highlighting the Top 25 SEO Related Blogs in the industry, based on the following factors: Google PageRank, Alexa Rank, Bloglines Subscribers and Technorati Authority. Not an exact science but I think it would be hard to argue against any of the ones on the list. Here are the top 5:

1.Search Engine Land
2.SEOBook
3.SEOmoz
4.Matt Cutts’ Blog
5.Search Engine Watch

I don’t usually like to simply re-hash existing content, but there’s just really nothing more to say and I feel that both sources of information are valuable. I would recommend bookmarking at least a couple of the links, at least for a point of reference in the future.

5 SEO-Related Blogs & Resources To Read and Why I Would Recommend Them

2007-08-10T19:55:00.000-07:00

I had the opportunity to stop into the monthly meeting for the Cambridge SEO Meetup Group the other night and had an excellent time talking to other search engine marketing professionals, small business owners and folks generally interested in how SEO can become a component of their online marketing strategy. Among the questions and discussions brought up was the question on “what websites do you go to obtain search engine related information and resources?“. We ran out of time last night to really open that question up for discussion, so I thought I would provide my answer through this post.

For people interested in search engine optimization, or working with SEO in their everyday online endeavors, there are 5 SEO-related blogs that I consider “Must Reads” on a regular basis (at least weekly check-ins). The reason I chose these blogs was because of the depth of information that they provide and the influence they have in relation to other blogs and resources in the industry. In addition, Lee Odden’s Big List of Search Marketing Blogs lists nearly 400 search engine related blogs out there that discuss search engine optimization, marketing, technology and other Internet related topics. That is more information than most people would ever need, let alone on a weekly basis (which is one of the requirements for being listed), but aside from the 5 below, that is another excellent option for finding SEO related resources.

Search Engine Land
http://searchengineland.com/
Why I Read and Recommend It:
Danny Sullivan is one of the leaders in the search engine marketing industry and Search Engine Land provides some of the most up to date coverage on events, news and information related to the space. Not only are people like Barry Schwartz, Bill Slawski and Jennifer Slegg regular writers (Barry Schwartz is the News Editor) but the site also features regular contributions from some of the most respected and successful SEO/SEM individuals out there, sharing their own personal knowledge of what is happening in the industry

What Else To Consider:
On any given day there could be 5 to 10 to more articles written, which can be cumbersome to keep up with in a regular RSS feed subscription. At the least, I recommend subscribing to the SearchCap posts, which summarize the daily post information as well as point to articles and information of note on other blogs and websites.

Aside from the main articles and posts section, there are different “Lands” of information, which provide readers specific resources for search engines, topical discussions and business-specific situations. There are also a ton of tutorials, articles and resources available for review in each section. Finally, Search Engine Land recently released Sphinn, which is an social community designed to showcase and discuss interesting and potentially valuable content found from around the web, related to all things search. This is a nice way to find out what people in the industry like and find of interest as well.

SEOmoz.org
http://www.seomoz.org/
Why I Read and Recommend It:
The key difference I find between SEOmoz and Search Engine Land - as a source for daily information - is that SEOmoz addresses more specific questions that people working in search marketing deal with, whereas Search Engine Land brings you industry news and overarching recommendations (although there are a ton of specific resources available in Search Engine Land in each “Land” section). The team at SEOmoz consistently find a way to identify an issue in search, provide a recommendation and then provide clear detail as it pertains to solving or addressing the issue. The fact that they can do this, with such effectiveness, on a regular basis is what makes this a regular read for me.

What Else To Consider:
Since I’ve been a reader of SEOmoz (which seems like since nearly the inception), they have launched two features that can add significant value, particularly to people new in the industry: A Premium Content Section and YOUmoz. The premium content section offers users access to potentially valuable SEO tools unavailable to non-paying subscribers, as well as 3 eBooks (two more in the works) and exclusive access to ask questions to members of the SEOmoz team*.

YOUmoz offers registered users (registration is free) the ability to write their own articles and blog posts, which (if approved) are published on the YOUmoz blog. In addition, the most popular posts can be often make their way onto the SEOmoz home page. Having your writing published is a nice way to connect with the growing subscriber base found in the SEOmoz community.

(*imo, that would seem like something they would end/limit at some point if their premium subscriber base significantly increased, so if you’re on the fence in regards to purchasing a premium membership, now may be the best time to do it).

Matt Cutts’ Blog
http://www.mattcutts.com/blog/
Why I Read and Recommend It:
Aside from the fact that Matt Cutts seems like a generally nice person he’s also the Head of Google’s Webspam Team and therefore gets to deal with those entities looking to impact Google search rankings using “not-so-nice” tactics related to SEO (not that that would ever happen). In addition to providing insight on what technical (and non-technical) issues the webspam team confronts on a regular basis, Matt Cutts has historically been a spokesperson relaying the “how” and “why” Google does this or that with their search algorithm.

What To Consider:
I don’t tend to read as much of Matt Cutts’ blog as I used to, as there seems to be much more material outside of the subject of Google Technology, but failing to check in on a regular basis would be neglecting my responsibility as an effective SEO consultant. That being said, in addition to insight into Google’s search technology - and how they deal with spam, “black hat SEO” and other issues with search - readers can get a glimpse of what’s going on at Google in terms of company culture and information on upcoming releases and beta projects at Google.

The Google Webmaster Central Blog
http://googlewebmastercentral.blogspot.com/
Why I Read and Recommend It:
There are two reasons I read and recommend Google Webmaster Central:

The Google Webmaster Central Blog is utilized to announce new features, functionality and information related to Google search technology.
Google search represents over 50% of the search engine industry.

Until one or both of those two factors change for the worse, there is very little reason why you would not want to keep track of what is being said and written over there.
What To Consider:
As with any of the blogs I read regularly, it’s important to consider how something being said may or may not impact your own search engine optimization strategy and (perhaps more importantly) what the motivation is for someone to say it in the first place.

TechCrunch
http://www.techcrunch.com/
Why I Read and Recommend It:
Obviously TechCrunch is not an SEO Blog or SEO Resource, but it is a tremendously valuable source of information on what is “new” in the world of Internet technology - specifically: “Web 2.0″ technology. If SEO is really a popularity contest, understanding what is new and important in web technology has to be a critical part of the strategic process, because these are the tools and resources that factor into the growth and development of your website, either outside of the confines of your web pages (social communities, networks, link opportunities) or as a component of your website offerings (functionality like video and website interactivity).

What To Consider:
As with Search Engine Land, the occasional reader can simply get overwhelmed with the amount of new information and content that can pile up in an RSS reader if neglected for a week and unlike Search Engine Land, there is really no way to segment out information that will be delivered (there are no recap posts or posts by categories to organize or highlight). As a result, it’s important to assess how valuable each piece of information is to you and your business, as not all of them will be - at least that is what I would imagine. Fortunately, the site does have a company/product index, which can be helpful if you are looking back in the TechCrunch archives for specific information.

Final Thoughts and Considerations
As I stated above, the main reasons I chose the blogs above was in relation to the depth of information that they provide and the influence they have in relation to other blogs and resources in the industry. Search Engine Land and SEOmoz clearly are related to the SEO/SEM Industry and The Google Webmaster Central Blog and Matt Cutts’ Blog are specific to Google. While TechCrunch is not directly related to SEO, it is related to innovation online, which is a key ingredient to any online business’s success over the long run.

There are well over 100 “other” SEO-related blogs I currently subscribe to, many of those I read regularly and would consider “better” than these 5 above, but that is because of my own personal preferences in writing style, subject matter and relationship. The Cape Cod SEO “Blogs I Read” highlight some of them, and you can also view my Bloglines and del.icio.us accounts to see other blogs and websites I have found of interest. That being said, for webmasters and site owners that want to get a good look at the industry overall, still have access to detailed and well written information, but really cannot invest the time and energy to sift through a diverse range of information, writing styles, points of view and/or complexity, these 5 resources are at the top of my list.

Reality Catches Up With Pat Fallon

2007-08-07T03:58:00.000-07:00

The name Fallon still sits over the door of an ad agency, but as the shop fights to avoid the fate that befell such storied names as Bates and D'Arcy, its founder has been reduced to being little more than the third initial in a new mini-holding company.
Pat Fallon was shifted into an emeritus role last week in a restructuring by parent Publicis Groupe that leaves his namesake shop reporting to Saatchi & Saatchi Worldwide CEO Kevin Roberts.
Pat Fallon was shifted into an emeritus role last week in a restructuring by parent Publicis Groupe that leaves his namesake shop reporting to Saatchi & Saatchi Worldwide CEO Kevin Roberts.

Pat Fallon, the larger-than-life creative who sparked an ad revolution in the 1980s with groundbreaking campaigns such as Rolling Stone's "Perception/Reality," was shifted into an emeritus role last week in a restructuring by parent Publicis Groupe that leaves his namesake shop reporting to Saatchi & Saatchi Worldwide CEO Kevin Roberts. While Fallon remains independent of Saatchi & Saatchi, the two will sit together in a mini-holding company run by Mr. Roberts and called SSF.

Effective in January, the famously combative Mr. Fallon departs from a day-to-day role (he insists his presence will still be felt in the building) at the Minneapolis shop, which is struggling to survive. Two of its highest-profile accounts -- Citibank and United Airlines -- departed this year, the agency's new-business trends are woeful, and the leadership of its vaunted creative department has been in and out of flux for years.

"This is certainly not how I would script it," 62-year-old Mr. Fallon said in an interview last week, during which he explained that, as a single parent, he wants to spend more time with his children. "I'd like it to be with the trajectory going wild, but it isn't doing that."

Expected move
The trajectory is, of course, doing quite the opposite, which is why a major move at Fallon was expected by many in the industry. After losing those two signature clients, it's still looking for a successor car account to BMW, which departed in 2005 after a decade of mostly acclaimed work. Fallon's largest remaining accounts are Nestlé/Purina, Travelers Insurance, Sony and Holiday Inn.

Publicis' move groups the struggling shop with the Paris holding company's hottest commodities, Saatchi and Mr. Roberts, whose "Lovemarks" approach to brand building has helped that agency snare accounts such as JC Penney and Wendy's without reviews in recent months.

It wasn't long ago, of course, that Mr. Fallon's "Juicing the Orange" mantra was winning over would-be clients with its promise of smart, innovative and well-produced advertising, such as the widely hailed BMW Films, the elegant, long-running "Live Richly" campaign for Citi and the adventures of durable denim shiller Buddy Lee -- all widely hailed work done earlier this decade for clients Fallon no longer has.

That comparison isn't lost on Mr. Fallon. "Kevin has 'Lovemarked' his way into clients," he said. "We've been saying that we'd rather outsmart the competition than outspend them for 26 years, but we've never taken the time and energy to promote it the way Kevin has. He's turned it into a new-business machine, and you have to tip your hat to that."

Admiration
Creatives around the industry said the occasion of Mr. Fallon stepping out of a day-to-day role at Fallon was worth commemorating.

"Anybody who ever wanted to do anything good creatively ought to care about Fallon," said Marty Orzio, chief creative officer at BBDO Energy, Chicago. "Fallon has been a creative beacon, and you just hope that, with Pat stepping aside, that doesn't change."

Mr. Roberts indicates it won't. "Pat is one of those iconoclastic figures in advertising they don't make any more," he said. "We want to continue to work with Pat so we can stay true to Fallon's principles as we take the agency into the future."

Mr. Fallon said he blames himself for a series of unsuccessful hires in the creative department. Following the surprise departure of his onetime protégé, David Lubars, to BBDO in 2004, Mr. Fallon hired Paul Silburn as creative chief, and then fired him a year later. Kerry Feuerman replaced Mr. Silburn and left after 13 months.

Creative leadership
Earlier this summer, Mr. Fallon tapped Strawberry Frog's Al Kelly for the top creative post. "I finally got something right," he said. "We haven't had the right creative leadership, and that has an effect on a creative agency like this."

The next challenge is reversing a brutal new-business drought that has somehow seen an agency that did some of the most lauded auto work ever on BMW go two years without a U.S. auto account. One of the freshest disappointments there was a loss in the final round in the battle for creative chores on Volvo.

"We will get a car, we will get a major financial [account], and we would get an airline except that we're in it to make a profit, and you can't do that with airlines anymore," he said, sounding less and less like an "emeritus" anything. "I'm not going to be on the sidelines. I'm there if they need me."

His new title, of course, seems to suggest otherwise.

"I don't care what the organizational chart says," said Chuck Porter of Crispin Porter & Bogusky, a lifelong friend of Mr. Fallon and the founder of the agency many see as having dethroned Fallon as the boundary-pushing creative boutique of the moment. "Pat doesn't report to anyone."

Why Unilever Lost the Laundry War

2007-08-07T03:55:00.000-07:00

In a 1999 interview with Advertising Age, then-P&G President A.G. Lafley shook his head at an admission by then-Unilever Co-Chairman Niall FitzGerald in a magazine article that at one point he and other Unilever executives hadn't been in a laundry room for years.
P&G's domination of the laundry business can be traced all the way back to the launch of Tide in the 1940s.
P&G's domination of the laundry business can be traced all the way back to the launch of Tide in the 1940s.

"That would never happen here," Mr. Lafley said.

In the end, that was the story of how one of the most fabled marketing battles of the past century was won -- and lost. P&G had its head, literally and figuratively, in the laundry room. Unilever didn't.

For sale
Unilever put its $1.1 billion North American laundry business up for sale last week, ending nearly seven decades of struggle between the two global soap behemoths for the $7 billion U.S. laundry business.

Some marketing executives trace the beginning of the end all the way back to the late 1940s, when P&G decided to roll out its synthetic Tide detergent nationally -- while Lever Brothers was still cautiously test-marketing its own synthetic offering under the long-ago discontinued Rinso brand.

But the bottom line is that P&G won the laundry war because it was bigger, better, more focused and more aggressive in a business that's become much more important and profitable to it than to competitors.

Scale is important in many categories, but particularly in laundry, which is relatively costly to produce and ship. P&G's laundry business is widely seen as a cash cow that has fueled other ventures for years, while still having plenty of margin to outspend the competition. Last year, P&G outgunned Unilever on media spending for laundry brands $218 million to $25 million, according to TNS Media Intelligence.

Domination
Entering a new millennium, even though its U.S. market share was well over 50% in laundry detergent, P&G kept raining blows on Unilever and all other comers with stepped-up product launches. Such products as Tide with Downy, Tide Coldwater and the scent-focused Simple Pleasures lineup for Tide and Downy helped P&G steadily gain a share point or two per year in recent years, so that it owns a 62.5% share of the $3.6 billion laundry-detergent market as measured by Information Resources Inc. to Unilever's 12.9%. It has an even bigger lead in fabric softeners -- 66% to 8.4% for Unilever.

Unilever's sale plan ends a major and storied marketing war where hundreds of laundry players bludgeoned one another over decades.
With liquid Wisk and its classic 'ring around the collar' advertising of the 1960s, Unilever made steady inroads as leader in a new segment until P&G launched liquid Tide in 1985.
With liquid Wisk and its classic 'ring around the collar' advertising of the 1960s, Unilever made steady inroads as leader in a new segment until P&G launched liquid Tide in 1985.

With liquid Wisk and its classic "ring around the collar" advertising of the 1960s, Unilever made steady inroads as leader in a new segment until P&G launched liquid Tide in 1985. There were fireworks, literally, as Unilever spent lavishly with promotions such as a 22-city Grucci display for Wisk, then the leading liquid detergent, as part of a $10 million push in 1987.

But ultimately, the defense fizzled. People familiar with the laundry wars from both sides believe that when P&G, after two decades of contemplation, put the Tide brand name on a liquid detergent, the handwriting was on the wall for Unilever in liquids, too.

Top guns
Working on that liquid Tide launch in the mid 1980s was Mr. Lafley himself -- then an advertising manager -- and Bob McDonald, then Tide brand manager. If you need further convincing that P&G put its top guns on laundry, consider this: Not only did Mr. Lafley become P&G's chairman-CEO, Mr. McDonald is chief operating officer, and widely seen as a leading candidate to succeed him.

On P&G's earnings conference call Aug. 3, Mr. Lafley was clearly heartened by P&G's victory, noting that it was the No. 2 player in laundry globally even in the early 1990s but today leads Unilever 34% to 17% in global share.

Unilever isn't admitting defeat, but said it prefers to invest in faster-growing and more profitable businesses, such as personal care, where, at least for the past two quarters, it's been outgrowing P&G globally. Unilever remains the leading laundry player in emerging markets overall.

Top candidates to buy the business are Church & Dwight, Henkel and Vestar, owner of private-label manufacturer Huish. Any of the three could be a bigger and potentially more effective No. 2 in the business than Unilever was. But even at that, P&G will remain at least three times bigger than its nearest competitor in laundry.

Stand-Alone News Brands Are Doomed

2007-08-07T03:51:00.000-07:00

Near the top of his blog, journalism critic and NYU professor Jay Rosen keeps a mission statement that's as useful as any for guiding today's pack of weary newshounds. "We need," he writes, "to keep the press from being absorbed into The Media." It's a lofty goal and definitely worth pursuing if you're a believer in a role of the reporter in maintaining democracy and checking the power of business. It's also doomed to failure, as evidenced by Rupert Murdoch's purchase of Dow Jones last week.
images
Photo illustration by John Kuczala

Mr. Murdoch's victory is a black day for premium news brands, the sort of outlets that could stand on their own. Not because the Aussie will befoul the Journal's pages with celebrity gossip, scantily clad models or crass headlines, but as an urgent reminder that high-brow notions of news are rapidly losing whatever power they still have in a culture that prizes brevity, speed and, above all, entertainment.

A News Corp.-owned Wall Street Journal begs a question: In a world where the attention of consumers and hence advertisers is divided among video games, "American Idol" and LOLCats, can a business built solely to deliver news -- especially long, serious articles about complicated topics -- remain independent and successful?

Destination paper
Time was, there would be no better destination for an advertiser -- or, for that matter, an ambitious reporter -- than The Wall Street Journal, a fact that made it the natural center of the Dow Jones world.

But take some bad business decisions, plus the decline of newspaper advertising, plus the proliferation of cheaper, more exciting places to put ads, plus the erosion of trust in the media and, voilá, you've got a remodeling of the media world that would have been unthinkable a few years ago. The nation's leading purveyor of business information, still an agenda-setter for the planet's biggest economy, becomes a cog in a vertically integrated, multinational creator and distributor of entertainment, a machine engineered to pump out synergies such as "The Simpsons" movie or, more scarily, that aborted O.J. Simpson extravaganza, rather than Pulitzers.

Until now, Mr. Murdoch's newspaper holdings have been isolated within the News Corp. empire, contributing less and less to a whole dominated by possessions such as the 20th Century Fox film studio, the Fox broadcast and cable networks, and, increasingly, MySpace. But the Journal, to be sure, will not be kept in such isolation. Sure, Mr. Murdoch will pump capital into the paper, allowing it to build out its international operation, but some are predicting that one effect of that bulking up could be to further his business goals, especially in China. And Journal reportage, now a means to the purist end of watchdogging the business community, will be called upon also to add more grist to that massive multimedia content mill, in the form of the Fox Business Network -- which is already being positioned as more pro-business than CNBC, absurd as that sounds.

The assembly line
What a repurposed corporate ontology means for Dow Jones, the Journal brand, the people who work there and the news business at large remains to be seen. The expense of producing hard news combined with the dilution of mass audiences and now a desiccated ad landscape for serious journalism has already forced a gutting of venerable operations such as CBS News and its network rivals, putting them on the infotainment assembly line. Was it only ever a matter of time before some even more prestigious outlets were forced to man a post?

Former Dow Jones CEO Peter Kann was anti-sale and worried about how a relatively small company would fit into Mr. Murdoch's behemoth, telling The New Yorker's Ken Auletta, "As a public trust, [the Journal] sits in the center of Dow Jones. And I'm not sure where it would sit in Gannett or Google or News Corp."

Here's another quote, from Mr. Kann's successor, Richard Zannino, in a memo following the sale announcement: "We can't have great journalism without a great business to support it. And without the journalism, there is no business. This combination with News Corp. acknowledges as much."

So yawning is the intellectual gulf that separates these statements, you can almost feel history rumble through it. Perhaps giving a glimpse of his roots as a reporter and editor, Mr. Kann holds out a role for the Journal that transcends any business struggles, even using the phrase "public trust," which sounds almost quaint given popular attitudes toward the news media. Mr. Zannino, on the other hand, is all about business, and that is the approach that carried the day.

25 Tips for Marketing Your Blog

2007-08-02T20:58:00.000-07:00

With so many blogs being created every day, it’s a mystery to many bloggers how to make their blog stand out. There are many types of blogs or purposes for blogs and a certain number of tactics are applicable to just about all of them.

Some companies choose to hire a blog consultant, but others like to try things internally. For those “DIY” companies and individuals interested in practical tips for marketing and optimizing a business blog, try out the following list of blog marketing and optimization tips:

1. Decide on a stand alone domain name www.myblog.com or directory of existing site www.mysite.com/blog. Sub domain is also an option blog.mysite.com. Avoid hosted services that do not allow you to use your own domain name!
2. Obtain and install customizable blog software - WordPress and Moveable Type are my favorites.
3. Customize blog look and feel templates - aka design.
4. Research keywords and develop a glossary - Keyword Discovery, WordTracker, SitePoint, SEOBook Keyword Research.
5. Optimize the blog:
* Template optimization - RSS subscription options, social bookmark links, HTML code, Unique title tags, URLs, Sitemap
* Add helper plugins specific to WordPress or MT
* Create keyword rich categories (reference your keyword glossary)
6. Enable automatic trackback and ping functionality.
7. Create Feedburner Pro account and enable feed tracking.
8. Setup a Google account for Sitemap, validate and prep for future submission.
9. Identify authoritative blogs, web sites and hubs for outbound resource links and blogroll.
10. Format archived posts, related posts.
11. Enable statistics for tracking - Google Analytics, ClickTracks.
12. Submit RSS feed and Blog URL to prominent RSS and Blog directories / search engines.
13. Engage in an ongoing link building campaign.
14. If podcast or video content are available, submit to Podcast and Vlog directories.
15. Submit blog url to paid directories with categories for blogs - Yahoo, BOTW, bCentral, WOW, JoeAnt.
16. Optimize and distribute a press release announcing blog.
17. Request feedback or reviews of your blog in relevant forums, discussion threads. If you have a resourceful post that will help others, point to it.
18. Research and comment on relevant industry related blogs and blogs with significant centers of influence.
19. Post regularly. If it’s a news oriented blog, 3-5 times per day. If it’s an authoritative blog, 3-5 times per week, but each post must be unique and high value.
20. Monitor inbound links, traffic, comments and mentions of your blog - Google Alerts, Technorati, Blogpulse, Yahoo News, Ask Blogs and Feeds.
21. Always respond to comments on your blog and when you detect a mention of your blog on another blog, thank that blogger in the comments of the post.
22. Make contact with related bloggers on AND offline if possible.
23. When making blog posts always cite the source with a link and don’t be afraid to mention popular bloggers by name. Use keywords in the blog post title, in the body of the post and use anchor text when you link to previous posts you’ve made.
24. Use social networking services, forums and discussion threads to connect with other bloggers. If they like your stuff, they will link to you.
25. Remember when web sites were a new concept and the sage advice to print your web address everywhere you print your phone number? The same advice applies for your blog.
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26. If your blog’s goal is to promote you as an authority, interview other prominent bloggers in your industry. Your own credibility will improve by association.
27. Build out your online networks through services such as MyBlogLog, Twitter and Facebook and leverage them to promote particularly useful content on your blog.
28. Once your blog has 1000 or more subscribers, show your Feedburner badge
29. Host images with Flickr making sure to include an anchor text link in the image description back to the post where the image is used.
30. Use your blog to gain press/media credentials at relevant industry conferences and use the event to create content, connections and increase your knowledge.

Marketing Tips

2007-08-02T20:55:00.000-07:00

1. Learn how search engines and directories work and get listed. Of course we think this is the most important marketing tip of all. That's why we created Searchengines.com. Stay up to date on search engine information and do what you can for a better ranking. This is how people find your site, so it's critical.

2. Write a targeted Press Release. Send press releases to editors/writers and publications that are likely to be interested in your pitch. Write a newsworthy article, not an advertisement. Tailor your material for different audiences and increase your chances of publication. Above all, be short and to the point, and avoid factual, spelling or grammatical errors.

3. Use your website as a 24 hour image machine. Make sure that your site's content puts forth the image you want to present. A nicely designed website with useful, informative content is a great promotional ambassador.

4. Keep your domain name simple. Try to use a short domain name that relates to the site's purpose. Make it memorable and unique… after all… there are a lot of sites out there.

5. Stay fresh. You don't have to update by the second but you should refresh your site's content as often as possible. Updating shows customers you are on top of things and helps your business appear current.

6. Network to boost your site traffic. Ask other webmasters to link to you. This will help your search engine rankings and create a strong company image as well as some traffic. Send emails only to webmasters with related content and personalize the message. If it appears that you are sending mass emails to random sites, this will be considered spam. You may need to offer a reciprocal link. Make sure the websites linking to you represent your company's ethics. You don't want to be associated with a site containing objectionable material. Don't forget to find out who's linking to your competition.

7. Put your URL everywhere. Use your usual (and maybe some unusual) methods of communication including stationary, business cards, invoices, faxes, etc.

8. Register variations of your domain name. Try to register common misspellllings of your domain as well as other top level domain extensions such as: .net. You may also want to register your domain for using national top level domains such as .co.uk.

9. Show your good side. Find out if your company donates money to a charity or participates in volunteer services. Involvement with education or the environment is an example. If so, describe this on your site. Don't make anything up.

10. Always respect your customers. It pays off, whether you're doing marketing research or responding to a complaint. Honest and clear communication builds a strong reputation and good customer retention.

11. Nominate your website for web awards today! It doesn't have to be a big name website. If you win, (or even if you win 'runner-up,') post the news on your website. Aside from the promotion, chances are you'll gain an external link from the site that awarded you. Kill two birds with one stone; increase web traffic and gain recognition for your outstanding website!

12. Talk to people in their native language. When you are deciding whether or not to make your site multilingual, first consider who your audience is.

13. Logos and Slogans. They aren't set it stone but make some good ones the first time. Spend a lot of time on both, and if you can afford professional advice, it's not a bad idea. In general, your logo and slogan should be on every page of your site. Consistency is everything.

14. Email market but don't lose your good name. Send emails only to those that opt-in.

15. E-newsletters benefit you and the customer if they are done right. Keep it short and sweet. Send the newsletters at consistent increments and make your material easy to understand. Try to make it viral by asking recipients to invite others to sign up.

16. Have a little fun with a contest or game. Simple is best. Whether you choose company trivia or host a writing contest, make sure you set guidelines and post them on your site. Contests give customers another reason to return to your site.

17. Make your error messages less scary. If possible (depending on your web host,) change 'file not found' messages to a friendly response that re-directs visitors to your home page.

18. Email services are free advertising among other things. Not only can you attach your extension to customer email addresses (such as Matt @searchengines.com) but you also give customers another reason to come back to your site to check their email.

19. Everyone needs their privacy. At a time when online security is the main concern, show customers you care. Privacy statements let customers know what happens to the personal information they give to you. Make your privacy statement clear and concise, and then offer contact information should any confusion or disagreements arise. Employees should be made aware of the information in your company's privacy statement.

20. Frequently Asked Questions don't have to be a nuisance. Creating an FAQ section will save you time and energy and give your web users a quick response.

21. Register freebies at a "Free stuff" site. Look around on the Net for sites that promote free stuff. Contact these sites and offer some of your own promotional goodies.

22. Use a signature in emails and newsgroups: Include your name and contact information. This will reinforce your company identity. It should be between four to six lines and provide basic information and your company's primary focus.

23. Write right. Clear and concise writing is paramount to effective communication in your web content, press releases and newsletters. If needed…get help.

INTRODUCTION TO MARKETING

2007-08-02T20:47:00.000-07:00

Background

What is marketing? Almost every marketing textbook has a different definition of the term “marketing.” The American Marketing Association (AMA) uses the following: “The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” From this definition, we see that:

* Marketing involves an ongoing process. The environment is “dynamic.” This means that the market tends to change—what customers want today is not necessarily what they want tomorrow. For example, sales of beef are declining in the United States because consumers have become health oriented. Similarly, Tupperware parties are less popular today than they once were because there are fewer housewives who do not work outside the home.
* This process involves both planning and implementing (executing) the plan.
* Some of the main issues involved include:
o Marketers help design products, finding out what customers want and what can practically be made available given technology and price constraints.
o Marketers distribute products—there must be some efficient way to get the products from the factory to the end-consumer.
o Marketers also promote products, and this is perhaps what we tend to think of first when we think of marketing. Promotion involves advertising—and much more. Other tools to promote products include trade promotion (store sales, coupons, and rebates), obtaining favorable and visible shelf-space, and obtaining favorable press coverage.
o Marketers also price products to “move” them. We know from economics that, in most cases, sales correlate negatively with price—the higher the price, the lower the quantity demanded. In some cases, however, price may provide the customer with a “signal” of quality. Thus, the marketer needs to price the product to (1) maximize profit and (2) communicate a desired image of the product.
o Marketing is applicable to services and ideas as well as to tangible products. For example, accountants may need to market their tax preparation services to consumers.

Reasons for studying marketing. There are several good reasons for studying marketing. First of all, marketing issues are important in all areas of the organization—customers are the reasons why businesses exist! In fact, marketing efforts (including such services as promotion and distribution) often account for more than half of the price of a product. As an added benefit, studying marketing often helps us become more savvy consumers. We will learn, for instance, that the per unit price of a bigger package is frequently higher than that of a smaller one, and that more expensive products are frequently not better in quality.

Criteria that must be met for marketing to occur. Several criteria must be met for marketing to occur:

* There must be two parties, each with unsatisfied needs or wants. This want, of course, could be money for the seller.
* Each must have something to offer. Marketing involves voluntary “exchange” relationships where both sides must be willing parties. Thus, a consumer who buys a soft drink in a vending machine for 60¢ must value the soft drink, available at that time and place, more than the money. Conversely, the vendor must value the money more. (It is interesting to note that money is, strictly speaking, not necessary for this exchange to take place. It is possible, albeit a bit cumbersome, to exchange two ducks for a pair of shoes.)
* The parties must be able to communicate. This could be through a display in a store, an infomercial, or a posting on eBay.

The marketing vs. the selling concept. Two approaches to marketing exist. The traditional selling concept emphasizes selling existing products. The philosophy here is that if a product is not selling, more aggressive measures must be taken to sell it—e.g., cutting price, advertising more, or hiring more aggressive (and obnoxious) sales-people. When the railroads started to lose business due to the advent of more effective trucks that could deliver goods right to the customer’s door, the railroads cut prices instead of recognizing that the customers ultimately wanted transportation of goods, not necessarily railroad transportation. Smith Corona, a manufacturer of typewriters, was too slow to realize that consumers wanted the ability to process documents and not typewriters per se. The marketing concept, in contrast, focuses on getting consumers what they seek, regardless of whether this entails coming up with entirely new products.

The 4 Ps—product, place (distribution), promotion, and price—represent the variables that are within the control of the firm (at least in the medium to long run). In contrast, the firm is faced with uncertainty from the environment.

The Marketing Environment

Elements of the environment. The marketing environment involves factors that, for the most part, are beyond the control of the company. Thus, the company must adapt to these factors. It is important to observe how the environment changes so that a firm can adapt its strategies appropriately. Consider these environmental forces:

* Competition: Competitors often “creep” in and threaten to take away markets from firms. For example, Japanese auto manufacturers became a serious threat to American car makers in the late 1970s and early 1980s. Similarly, the Lotus Corporation, maker of one of the first commercially successful spreadsheets, soon faced competition from other software firms. Note that while competition may be frustrating for the firm, it is good for consumers. (In fact, we will come back to this point when we consider the legal environment). Note that competition today is increasingly global in scope.
* Economics. Some firms in particular are extremely vulnerable to changes in the economy. Consumers tend to put off buying a new car, going out to eat, or building new homes in bad times. In contrast, in good times, firms serving those needs may have difficulty keeping up with demand.
* Political. Businesses are very vulnerable to changes in the political situation. For example, because consumer groups lobbied Congress, more stringent rules were made on the terms of car leases. The tobacco industry is currently the target of much negative attention from government and public interest groups. Currently, the desire to avoid aiding the enemy may result in laws that make it more difficult for American firms to export goods to other countries.
* Legal: Firms are very vulnerable to changing laws and changing interpretations by the courts. Firms in the U.S. are very vulnerable to lawsuits. McDonald’s, for example, is currently being sued by people who claim that eating the chain’s hamburgers caused them to get fat. Some impacts of the legal environment:
* Firms are significantly limited in what they can do by various laws—some laws, for example, require that disclosures be made to consumers on the effective interest rates they pay on products bought on installment. A particularly interesting group of laws relate to antitrust. These laws basically exist to promote fair competition among firms. Some principles involved here include:
o Collusion: Firms may not “conspire” to fix prices (agree that they will not sell below an agreed upon price) or reduce services.
o Predation: Firms may not sell their products below their cost of production for the purpose of driving competitors out of business so that they, themselves, can raise prices when competition is reduced.
o Market share: Firms which have an unacceptably large market share may be “broken” up by court order so that many smaller firms will be around to compete. (This is what happened to AT&T, and at times, IBM has been worried about this prospect). • Tying: A firm that controls a valuable product may not require the consumer to buy a more commonplace one to get the scarce product. For example, Intel controls many of the newest microprocessors (e.g., Pentium IV). Intel also makes motherboards for computers; however, motherboards are made by a lot of firms. Intel would be thought to abuse its effective monopoly power if it required consumers to buy a motherboard in order to get its newest chips.
* Technological. Changes in technology may significantly influence the demand for a product. For example, the advent of the fax machine was bad news for Federal Express. The Internet is a major threat to travel agents.
* Social: Changes in customs or demographics greatly influence firms. Fewer babies today are being born, resulting in a decreased demand for baby foods. More women work outside the home today, so there is a greater demand for prepared foods. There are more unmarried singles today. This provides opportunities for some firms (e.g., fast food restaurants) but creates problems for others (e.g., manufacturers of high quality furniture that many people put off buying until marriage). Today, there are more “blended” families that result as parents remarry after divorce. These families are often strapped for money but may require “duplicate” items for children at each parent’s residence.

Environmental scanning helps the firm understand developments in the market. Such developments may involve changes in the market place due to social trends (e.g., Gerber, a manufacturer of baby products, faces a serious challenge with declining U.S. birth rates), technology (e.g., VCR makers are threatened by DVD players), or new or potential competitors (e.g., Internet service providers are being threatened by increasing marketing efforts from MSN). Note that environmental scanning must be performed continuously, since environmental change does not cease.

Economic cycles. The economy goes through cycles. In the late 1990s, the U.S. economy was quite strong, and many luxury goods were sold. Currently, the economy is somewhat weak, and many firms are facing the results. Car makers, for example, have seen declining profit margins (and even losses) as they have had to cut prices and offer low interest rates on financing. Generally, in good economic times, there is a great deal of demand, but this introduces a fear of possible inflation. In the U.S., the Federal Reserve will then try to prevent the economy from “overheating.” This is usually done by raising interest rates. This makes businesses less willing to invest, and as a result, people tend to make less money. During a recession, unemployment tends to rise, causing consumers to spend less. This may result in a “bad circle,” with more people losing their jobs due to lowered demands. Some businesses, however, may take this opportunity to invest in growth now that things can be bought more cheaply.

Strategic Planning and the Marketing Process

Plans and planning. Plans are needed to clarify what kinds of strategic objectives an organization would like to achieve and how this is to be done. Such plans must consider the amount of resources available. One critical resource is capital. Microsoft keeps a great deal of cash on hand to be able to “jump” on opportunities that come about. Small startup software firms, on the other hand, may have limited cash on hand. This means that they may have to forego what would have been a good investment because they do not have the cash to invest and cannot find a way to raise the capital. Other resources that affect what a firm may be able to achieve include factors such as:  Trademarks/brand names: It would be very difficult to compete against Coke and Pepsi in the cola market.  Patents: It would be difficult to compete against Intel and AMD in the microprocessor market since both these firms have a number of patents that it is difficult to get around.  People: Even with all of Microsoft’s money available, it could not immediately hire the people needed to manufacture computer chips.  Distribution: Stores have space for only a fraction of the products they are offered, so they must turn many away. A firm that does not have an established relationship with stores will be at a disadvantage in trying to introduce a new product.

Plans are subject to the choices and policies that the organization has made. Some firms have goals of social responsibility, for example. Some firms are willing to take a greater risk, which may result in a very large payoff but also involve the risk of a large loss, than others.

Strategic marketing is best seen as an ongoing and never-ending process. Typically:

* The organization will identify the objectives it wishes to achieve. This could involve profitability directly, but often profitability is a long term goal that may require some intermediate steps. The firm may seek to increase market share, achieve distribution in more outlets, have sales grow by a certain percentage, or have consumers evaluate the product more favorably. Some organizations have objectives that are not focused on monetary profit—e.g., promoting literacy or preventing breast cancer.
* An analysis is made, taking into consideration issues such as organizational resources, competitors, the competitors’ strengths, different types of customers, changes in the market, or the impact of new technology.
* Based on this analysis, a plan is made based on tradeoffs between the advantages and disadvantages of different options available.
* This strategy is then carried out. The firm may design new products, revamp its advertising strategy, invest in getting more stores to carry the product, or decide to focus on a new customer segment.
* After implementation, the results or outcome are evaluated. If results are not as desired, a change may have to be made to the strategy. Even if results are satisfactory, the firm still needs to monitor the environment for changes.

Levels of planning and strategies. Plans for a firm can be made at several different levels. At the corporate level, the management considers the objectives of the firm as a whole. For example, Microsoft may want seek to grow by providing high quality software, hardware, and services to consumers. To achieve this goal, the firm may be willing to invest aggressively.

Plans can also be made at the business unit level. For example, although Microsoft is best known for its operating systems and applications software, the firm also provides Internet access and makes video games. Different managers will have responsibilities for different areas, and goals may best be made by those closest to the business area being considered. It is also more practical to hold managers accountable for performance if the plan is being made at a more specific level. Boeing has both commercial aircraft and defense divisions. Each is run by different managers, although there is some overlap in technology between the two. Therefore, plans are needed both at the corporate and at the business levels.

Occasionally, plans will be made at the functional level, to allow managers to specialize and to increase managerial accountability. Marketing, for example, may be charged with increasing awareness of Microsoft game consoles to 55% of the U.S. population or to increase the number of units of Microsoft Office sold. Finance may be charged with raising a given amount of capital at a given cost. Manufacturing may be charged with decreasing production costs by 5%.

The firm needs to identify the business it is in. Here, a balance must be made so that the firm’s scope is not defined too narrowly or too broadly. A firm may define its goal very narrowly and then miss opportunities in the market place. For example, if Dell were to define itself only as a computer company, it might miss an opportunity to branch into PDAs or Internet service. Thus, they might instead define themselves as a provider of “information solutions.” A company should not define itself too broadly, however, since this may result in loss of focus. For example, a manufacturer of baking soda should probably not see itself as a manufacturer of all types of chemicals. Sometimes, companies can define themselves in terms of a customer need. For example, 3M sees itself as being in the business of making products whose surfaces are bonded together. This accounts for both Post-It notes and computer disks.

A firm’s mission should generally include a discussion of the customers served (e.g., Wal-Mart and Nordstrom’s serve different groups), the kind of technology involved, and the markets served.

Several issues are involved in selecting target customers. We will consider these in more detail within the context of segmentation, but for now, the firm needs to consider issues such as:

* The size of various market segments;
* How well these segments are being served by existing firms;
* Changes in the market—e.g., growth of segments or change in technology;
* How the firm should be positioned, or seen by customers. For example, Wal-Mart positions itself as providing value in retailing, while Nordstrom’s defines itself more in terms of high levels of customer service.

The Boston Consulting Group (BCG) matrix provides a firm an opportunity to assess how well its business units work together. Each business unit is evaluated in terms of two factors: market share and the growth prospects in the market. Generally, the larger a firm’s share, the stronger its position, and the greater the growth in a market, the better future possibilities. Four combinations emerge:

* A star represents a business unit that has a high share in a growing market. For example, Motorola has a large share in the rapidly growing market for cellular phones.
* A question mark results when a unit has a small share in a rapidly growing market. The firm’s position, then, is not as strong as it would have been had its market share been greater, but there is an opportunity to grow. For example, Hewlett-Packard has a small share of the digital camera market, but this is a very rapidly growing market.
* A cash cow results when a firm has a large share in a market that is not growing, and may even be shrinking. Brother has a large share of the typewriter market.
* A dog results when a business unit has a small share in a market that is not growing. This is generally a somewhat unattractive situation, although dogs can still be profitable in the short run. For example, Smith Corona how has a small share of the typewriter market.

Firms are usually best of with a portfolio that has a balance of firms in each category. The cash cows tend to generate cash but require little future investment. On the other hand, stars generate some cash, but even more cash is needed to invest in the future—for research and development, marketing campaigns, and building new manufacturing facilities. Therefore, a firm may take excess cash from the cash cow and divert it to the star. For example, Brother could “harvest” its profits from typewriters and invest this in the unit making color laser printers, which will need the cash to grow. If a firm has cash cows that generate a lot of cash, this may be used to try to improve the market share of a question mark. A firm that has a number of promising stars in its portfolio may be in serious trouble if it does not have any cash cows to support it. If it is about to run out of cash—regardless of how profitable it is—is becomes vulnerable as a takeover target from a firm that has the cash to continue running it.

A SWOT (“Strengths, Opportunities, Weaknesses, and Threats”) analysis is used to help the firm identify effective strategies. Successful firms such as Microsoft have certain strengths. Microsoft, for example, has a great deal of technology, a huge staff of very talented engineers, a great deal of experience in designing software, a very large market share, a well respected brand name, and a great deal of cash. Microsoft also has some weaknesses, however: The game console and MSN units are currently running at a loss, and MSN has been unable to achieve desired levels of growth. Firms may face opportunities in the current market. Microsoft, for example, may have the opportunity to take advantage of its brand name to enter into the hardware market. Microsoft may also become a trusted source of consumer services. Microsoft currently faces several threats, including the weak economy. Because fewer new computers are bough during a recession, fewer operating systems and software packages.

Rather than merely listing strengths, weaknesses, opportunities, and threats, a SWOT analysis should suggest how the firm may use its strengths and opportunities to overcome weaknesses and threats. Decisions should also be made as to how resources should be allocated. For example, Microsoft could either decide to put more resources into MSN or to abandon this unit entirely. Microsoft has a great deal of cash ready to spend, so the option to put resources toward MSN is available. Microsoft will also need to see how threats can be addressed. The firm can earn political good will by engaging in charitable acts, which it has money available to fund. For example, Microsoft has donated software and computers to schools. It can forego temporary profits by reducing prices temporarily to increase demand, or can “hold out” by maintaining current prices while not selling as many units.

Criteria for effective marketing plans. Marketing plans should meet several criteria:

* The plan must be specific enough so that it can be implemented and communicated to people in the firm. “Improving profitability” is usually too vague, but increasing net profits by 5%, increasing market share by 10%, gaining distribution in 2,000 more stores, and reducing manufacturing costs by 2% are all specific.
* The plan must be measurable so that one can see if it has been achieved. The above plans involve specific numbers.
* The goal must be achievable or realistic. Plans that are unrealistic may result in poor use of resources or lowered morale within the firm.
* The goals must be consistent. For example, a firm cannot ordinarily simultaneously plan improve product features, increase profits, and reduce prices.

Consumer Behavior

Consumer behavior involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

Sources of influence on the consumer. The consumer faces numerous sources of influence. Often, we take cultural influences for granted, but they are significant. An American will usually not bargain with a store owner. This, however, is a common practice in much of the World. Physical factors also influence our behavior. We are more likely to buy a soft drink when we are thirsty, for example, and food manufacturers have found that it is more effective to advertise their products on the radio in the late afternoon when people are getting hungry. A person’s self-image will also tend to influence what he or she will buy—an upwardly mobile manager may buy a flashy car to project an image of success. Social factors also influence what the consumers buy—often, consumers seek to imitate others whom they admire, and may buy the same brands. The social environment can include both the mainstream culture (e.g., Americans are more likely to have corn flakes or ham and eggs for breakfast than to have rice, which is preferred in many Asian countries) and a subculture (e.g., rap music often appeals to a segment within the population that seeks to distinguish itself from the mainstream population). Thus, sneaker manufacturers are eager to have their products worn by admired athletes. Finally, consumer behavior is influenced by learning—you try a hamburger and learn that it satisfies your hunger and tastes good, and the next time you are hungry, you may consider another hamburger.

Consumer choices are often influenced dramatically by values. Some consumers, for example, seek to “fit in with the crowd” and would like to own a car as similar as possible to that of the neighbor. Others, on the other hand, want to stand out. In the consumption context, then, a consumer may choose to spend a great deal of money on buying and maintaining neat and professional attire, not because he or she is particularly interested in that appearance for its own sake, but rather because this will help the consumer be successful in his or her career.

Subculture often significantly influences the consumer. There are several potential ways that a society can be divided up. Some consumers are highly influenced by their ethnic origin. In some areas in Los Angeles, shopkeepers may transact all their business in a language of the predominant immigration patterns into the neighborhood—e.g., Spanish or Korean in some parts of downtown and Chinese in parts of the San Gabriel Valley. Virtual pets at first spread in the U.S. through Asian-American teenagers. Only after a while did the product diffuse into other ethnic groups. Occasionally, religious groups will influence consumers’ behavior, usually because a religion may set certain standards—e.g., some religions do not allow the consumption of alcohol, while others may disapprove of charging interest. The fact that many Americans spend a great deal of time with members of their religious groups in churches, synagogues, and mosques implies that members have a great deal of influence on each other. People in similar age groups also tend to have more influence on each other. This is particularly evident in the spread of fashion. Social status may also have some influence, as people may tend to emulate others in similar occupations or neighborhoods.

One way to look at social influence is though “reference groups”—people against which one compares oneself. Thus, a consumer may notice that all his friends are wearing a special kind of jeans and may expect to be ostracized if he or she chooses to wear a different brand. Interestingly, however, one may also hold dissociative reference groups—people that one would not want to be compared to. For example, Cadillac has an image problem in being associated with older consumers, who are not considered “hip” enough by younger, upwardly mobile consumers that the firm would like to target. Thus, Cadillac ran the campaign “It’s not your father’s car.”

Family may influence the consumer’s choices a great deal. Research has shown, for example, that there is a tendency for adult children to use the same brands that their parents used over time. In many cases, these brand choices are made without much conscious thought.

In marketing jargon, a consumer problem refers to a “discrepancy” between the “ideal” situation and reality. Thus, problems can range greatly in severity. One problem, for example, is that you are hungry. The problem is easily solved by eating. Other problems can be significantly more severe—for example, a consumer is scared that he will be rejected by his wife because he is growing bald. Note that problems can be solved in more than one way. Baldness could be addressed by obtaining a wig, medical treatment, buying a fancy car (as an alternative way to achieve attractiveness), or some other creative way.

One model of consumer decision making involves several steps. The first one is problem recognition—you realize that something is not as it should be. Perhaps, for example, your car is getting more difficult to start and is not accelerating well. The second step is information search—what are some alternative ways of solving the problem? You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days. Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory). In reality, people may go back and forth between the stages. For example, a person may resume alternative identification during while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product. In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing program or acne medication).

It is important to consider the consumer’s motivation for buying products. To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer’s self-esteem. A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer’s family, which achieves the desired end-state of security. In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.

Information search and decision making. Consumers engage in both internal and external information search. Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example, the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships. Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need—e.g., through brochures, web sites, or news coverage.

A compensatory decision involves the consumer “trading off” good and bad attributes of a product. For example, a car may have a low price and good gas mileage but slow acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas. Occasionally, a decision will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.

The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed).

Two interesting issues in decisions are:

* Variety seeking (where consumers seek to try new brands not because these brands are expected to be “better” in any way, but rather because the consumer wants a “change of pace,” and
* “Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group. For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn. Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.

A number of factors involve consumer choices. In some cases, consumers will be more motivated. For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self. Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented. Personality impacts decisions. Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers offer a money back guarantee. Consumers will tend to change their behavior through learning—e.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes. Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle). We will consider the issue of lifestyle under segmentation.

Attitudes. Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some “object”—within the context of marketing, usually a brand, product category, or retail store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object.

Beliefs. The first component is beliefs. A consumer may hold both positive beliefs toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In addition, some beliefs may be neutral (coffee is black), and some may be differ in valance depending on the person or the situation (e.g., coffee is hot and stimulates--good on a cold morning, but not good on a hot summer evening when one wants to sleep). Note also that the beliefs that consumers hold need not be accurate (e.g., that pork contains little fat), and some beliefs may, upon closer examination, be contradictory.

Affect. Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because of the tremendous amount of fat it contains), but there may also be feelings which are relatively independent of beliefs. For example, an extreme environmentalist may believe that cutting down trees is morally wrong, but may have positive affect toward Christmas trees because he or she unconsciously associates these trees with the experience that he or she had at Christmas as a child.

Behavioral intention. The behavioral intention is what the consumer plans to do with respect to the object (e.g., buy or not buy the brand). As with affect, this is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect other circumstances--e.g., although a consumer does not really like a restaurant, he or she will go there because it is a hangout for his or her friends.

Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self-serving “agenda” in bringing about this change (e.g., to get the consumer to buy more or to switch brands). Here are some possible methods:

* Changing affect. One approach is to try to change affect, which may or may not involve getting consumers to change their beliefs. One strategy uses the approach of classical conditioning try to “pair” the product with a liked stimulus. For example, we “pair” a car with a beautiful woman. Alternatively, we can try to get people to like the advertisement and hope that this liking will “spill over” into the purchase of a product. For example, the Pillsbury Doughboy does not really emphasize the conveyance of much information to the consumer; instead, it attempts to create a warm, “fuzzy” image. Although Energizer Bunny ads try to get people to believe that their batteries last longer, the main emphasis is on the likeable bunny. Finally, products which are better known, through the mere exposure effect, tend to be better liked—that is, the more a product is advertised and seen in stores, the more it will generally be liked, even if consumers to do not develop any specific beliefs about the product.
* Changing behavior. People like to believe that their behavior is rational; thus, once they use our products, chances are that they will continue unless someone is able to get them to switch. One way to get people to switch to our brand is to use temporary price discounts and coupons; however, when consumers buy a product on deal, they may justify the purchase based on that deal (i.e., the low price) and may then switch to other brands on deal later. A better way to get people to switch to our brand is to at least temporarily obtain better shelf space so that the product is more convenient. Consumers are less likely to use this availability as a rationale for their purchase and may continue to buy the product even when the product is less conveniently located.
* Changing beliefs. Although attempting to change beliefs is the obvious way to attempt attitude change, particularly when consumers hold unfavorable or inaccurate ones, this is often difficult to achieve because consumers tend to resist. Several approaches to belief change exist:
o Change currently held beliefs. It is generally very difficult to attempt to change beliefs that people hold, particularly those that are strongly held, even if they are inaccurate. For example, the petroleum industry advertised for a long time that its profits were lower than were commonly believed, and provided extensive factual evidence in its advertising to support this reality. Consumers were suspicious and rejected this information, however.
o Change the importance of beliefs. Although the sugar manufacturers would undoubtedly like to decrease the importance of healthy teeth, it is usually not feasible to make beliefs less important--consumers are likely to reason, why, then, would you bother bringing them up in the first place? However, it may be possible to strengthen beliefs that favor us--e.g., a vitamin supplement manufacturer may advertise that it is extremely important for women to replace iron lost through menstruation. Most consumers already agree with this, but the belief can be made stronger.  Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they do not conflict with existing beliefs. Thus, the beef industry has added beliefs that beef (1) is convenient and (2) can be used to make a number of creative dishes. Vitamin manufacturers attempt to add the belief that stress causes vitamin depletion, which sounds quite plausible to most people.
* Change the ideal. It usually difficult, and very risky, to attempt to change ideals, and only few firms succeed. For example, Hard Candy may have attempted to change the ideal away from traditional beauty toward more unique self expression.

One-sided vs. two-sided appeals. Attitude research has shown that consumers often tend to react more favorably to advertisements which either (1) admit something negative about the sponsoring brand (e.g., the Volvo is a clumsy car, but very safe) or (2) admits something positive about a competing brand (e.g., a competing supermarket has slightly lower prices, but offers less service and selection). Two-sided appeals must, contain overriding arguments why the sponsoring brand is ultimately superior—that is, in the above examples, the “but” part must be emphasized. For more information, see http://www.consumerpsychologist.com/newsletter.htm .

Reference groups. A useful framework of analysis of group influence on the individual is the so called reference group—the term comes about because an individual uses a relevant group as a standard of “reference” against which oneself is compared. Reference groups come in several different forms. The aspirational reference group refers to those others against whom one would like to compare oneself. For example, many firms use athletes as spokespeople, and these represent what many people would ideally like to be. Associative reference groups include people who more realistically represent the individuals’ current equals or near-equals—e.g., coworkers, neighbors, or members of churches, clubs, and organizations. Finally, the dissociative reference group includes people that the individual would not like to be like. For example, the store literally named The Gap came about because many younger people wanted to actively dissociate from parents and other older and “uncool” people. The Quality Paperback Book specifically suggests in its advertising that its members are “a breed apart” from conventional readers of popular books.

The Family Life Cycle. Individuals and families tend to go through a “life cycle.” The simple life cycle goes from

child/teenager ---> young single ---> young couple ---> full nest ---> empty nest ---> widow(er).

In real life, this situation is, of course, a bit more complicated. For example, many couples undergo divorce. Then we have the scenario:

full nest ---> single parent

This situation can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the non-custodial parent remarries and has additional children in the second (or subsequent marriages). In any event, divorce often results in a large demand for:

* low cost furniture and household items
* time-saving goods and services.

Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see

full nest ---> single parent ---> blended family

Another variation involves

young single ---> single parent

Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child.

Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:

* As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement).
* Unfortunately, obligations also tend to increase with time (at least until one’s mortgage has been paid off). Children and paying for one’s house are two of the greatest expenses.

Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items since he or she has fewer current obligations. This will change when a house is bought or children come along.

Family Decision Making. Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision maker(s) have the power to determine issues such as:

* Whether to buy;
* Which product to buy (pick-up or passenger car?);
* Which brand to buy;
* Where to buy it; and
* When to buy.

Note, however, that the role of the decision maker is separate from that of the purchaser. From the point of view of the marketer, this introduces some problems since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that the distinction between the purchaser and decision maker may be somewhat blurred:

* The decision maker may specify what kind of product to buy, but not which brand;
* The purchaser may have to make a substitution if the desired brand is not in stock;
* The purchaser may disregard instructions (by error or deliberately).

It should be noted that family decisions are often subject to a great deal of conflict. The reality is that few families are wealthy enough to avoid a strong tension between demands on the family’s resources. Conflicting pressures are especially likely in families with children and/or when only one spouse works outside the home. Note that many decisions inherently come down to values, and that there is frequently no “objective” way to arbitrate differences. One spouse may believe that it is important to save for the children’s future; the other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here. The situation becomes even more complex when more parties—such as children or other relatives—are involved.

Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals.

The United States has undergone some changes in its predominant culture over the last several decades. Again, however, it should be kept in mind that there are great variations within the culture. For example, on the average, Americans have become less materialistic and have sought more leisure; on the other hand, the percentage of people working extremely long hours has also increased.

Significant changes have occurred in gender roles in American society. One of the reasons for this is that more women work outside the home than before. However, women still perform a disproportionate amount of housework, and men who participate in this activity tend to do so reluctantly. In general, commercials tend to lag somewhat behind reality—e.g., few men are seen doing housework, and few women are seen as buyers and decision makers on automobile purchases.

Regional influence, both in the United States and other areas, is significant. Many food manufacturers offer different product variations for different regions. Joel Girardeau, in his book The Nine Nations of North America, proposed nine distinct regional subcultures that cut across state lines. Although significant regional differences undoubtedly exist, research has failed to support Garreau’s specific characterizations/

Consumer behavior is frequently affected by the situation. For example, people may buy different products when shopping for others than they would for themselves. We tend to make quicker but less elaborate decisions when facing time pressure. There are also influences of mood. For example, people who are unhappy tend to make more rational and more critical decisions.

The Means-End chain. Consumers often buy products not because of their attributes per se but rather because of the ultimate benefits that these attributes provide, in turn leading to the satisfaction of ultimate values. For example, a consumer may not be particularly interested in the chemistry of plastic roses, but might reason as follows:

Highly reliable synthetic content of roses ---> Roses will stay in original condition for a long time ---> Significant other will appreciate the roses longer ---> Significant other will continue to love one ---> Self esteem.

The important thing in a means-end chain is to start with an attribute, a concrete characteristic of the product, and then logically progress to a series of consequences (which tend to become progressively more abstract) that end with a value being satisfied. Thus, each chain must start with an attribute and end with a value. An important implication of means-end chains is that it is usually most effective in advertising to focus on higher level items. For example, in the flower example above, an individual giving the flowers to the significant other might better be portrayed than the flowers alone.

Organizational buyers. A large portion of the market for goods and services is attributable to organizational, as opposed to individual, buyers. In general, organizational buyers, who make buying decisions for their companies for a living, tend to be somewhat more sophisticated than ordinary consumers. However, these organizational buyers are also often more risk averse. There is a risk in going with a new, possibly better (lower price or higher quality) supplier whose product is unproven and may turn out to be problematic. Often the fear of running this risk is greater than the potential rewards for getting a better deal. In the old days, it used to be said that “You can’t get fired for buying IBM.” This attitude is beginning to soften a bit today as firms face increasing pressures to cut costs.

Organizational buyers come in several forms. Resellers involve either wholesalers or retailers that buy from one organization and resell to some other entity. For example, large grocery chains sometimes buy products directly from the manufacturer and resell them to end-consumers. Wholesalers may sell to retailers who in turn sell to consumers. Producers also buy products from sub-manufacturers to create a finished product. For example, rather than manufacturing the parts themselves, computer manufacturers often buy hard drives, motherboards, cases, monitors, keyboards, and other components from manufacturers and put them together to create a finished product. Governments buy a great deal of things. For example, the military needs an incredible amount of supplies to feed and equip troops. Finally, large institutions buy products in huge quantities. For example, UCR probably buys thousands of reams of paper every month.

Organizational buying usually involves more people than individual buying. Often, many people are involved in making decisions as to (a) whether to buy, (b) what to buy, (c) at what quantity, and (d) from whom. An engineer may make a specification as to what is needed, which may be approved by a manager, with the final purchase being made by a purchase specialist who spends all his or her time finding the best deal on the goods that the organization needs. Often, such long purchase processes can cause long delays. In the government, rules are often especially stringent—e.g., vendors of fruit cake have to meet fourteen pages of specifications put out by the General Services Administration. In many cases, government buyers are also heavily bound to go with the lowest price. Even if it is obvious that a higher priced vendor will offer a superior product, it may be difficult to accept that bid.

International Marketing

Protectionism: Although trade generally benefits a country as a whole, powerful interests within countries frequently put obstacles—i.e., they seek to inhibit free trade. There are several ways this can be done:

* Tariff barriers: A duty, or tax or fee, is put on products imported. This is usually a percentage of the cost of the good.
* Quotas: A country can export only a certain number of goods to the importing country. For example, Mexico can export only a certain quantity of tomatoes to the United States, and Asian countries can send only a certain quota of textiles here.
* “Voluntary” export restraints: These are not official quotas, but involve agreements made by countries to limit the amount of goods they export to an importing country. Such restraints are typically motivated by the desire to avoid more stringent restrictions if the exporters do not agree to limit themselves. For example, Japanese car manufacturers have agreed to limit the number of automobiles they export to the United States.
* Subsidies to domestic products: If the government supports domestic producers of a product, these may end up with a cost advantage relative to foreign producers who do not get this subsidy. U.S. honey manufacturers receive such subsidies.
* Non-tariff barriers, such as differential standards in testing foreign and domestic products for safety, disclosure of less information to foreign manufacturers needed to get products approved, slow processing of imports at ports of entry, or arbitrary laws which favor domestic manufacturers.

Cultural lessons. We considered several cultural lessons in class; the important thing here is the big picture. For example, within the Muslim tradition, the dog is considered a “dirty” animal, so portraying it as “man’s best friend” in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the “real” product, is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which “really count.” Many cultures observe significantly greater levels of formality than that typical in the U.S., and Japanese negotiator tend to observe long silent pauses as a speaker’s point is considered.

Product Need Satisfaction. We often take for granted the “obvious” need that products seem to fill in our own culture; however, functions served may be very different in others—for example, while cars have a large transportation role in the U.S., they are impractical to drive in Japan, and thus cars there serve more of a role of being a status symbol or providing for individual indulgence. In the U.S., fast food and instant drinks such as Tang are intended for convenience; elsewhere, they may represent more of a treat. Thus, it is important to examine through marketing research consumers’ true motives, desires, and expectations in buying a product.

Approaches to Product Introduction. Firms face a choice of alternatives in marketing their products across markets. An extreme strategy involves customization, whereby the firm introduces a unique product in each country, usually with the belief tastes differ so much between countries that it is necessary more or less to start from “scratch” in creating a product for each market. On the other extreme, standardization involves making one global product in the belief the same product can be sold across markets without significant modification—e.g., Intel microprocessors are the same regardless of the country in which they are sold. Finally, in most cases firms will resort to some kind of adaptation, whereby a common product is modified to some extent when moved between some markets—e.g., in the United States, where fuel is relatively less expensive, many cars have larger engines than their comparable models in Europe and Asia; however, much of the design is similar or identical, so some economies are achieved. Similarly, while Kentucky Fried Chicken serves much the same chicken with the eleven herbs and spices in Japan, a lesser amount of sugar is used in the potato salad, and fries are substituted for mashed potatoes.

There are certain benefits to standardization. Firms that produce a global product can obtain economies of scale in manufacturing, and higher quantities produced also lead to a faster advancement along the experience curve. Further, it is more feasible to establish a global brand as less confusion will occur when consumers travel across countries and see the same product. On the down side, there may be significant differences in desires between cultures and physical environments—e.g., software sold in the U.S. and Europe will often utter a “beep” to alert the user when a mistake has been made; however, in Asia, where office workers are often seated closely together, this could cause embarrassment.

Adaptations come in several forms. Mandatory adaptations involve changes that have to be made before the product can be used—e.g., appliances made for the U.S. and Europe must run on different voltages, and a major problem was experienced in the European Union when hoses for restaurant frying machines could not simultaneously meet the legal requirements of different countries. “Discretionary” changes are changes that do not have to be made before a product can be introduced (e.g., there is nothing to prevent an American firm from introducing an overly sweet soft drink into the Japanese market), although products may face poor sales if such changes are not made. Discretionary changes may also involve cultural adaptations—e.g., in Sesame Street, the Big Bird became the Big Camel in Saudi Arabia.

Another distinction involves physical product vs. communication adaptations. In order for gasoline to be effective in high altitude regions, its octane must be higher, but it can be promoted much the same way. On the other hand, while the same bicycle might be sold in China and the U.S., it might be positioned as a serious means of transportation in the former and as a recreational tool in the latter. In some cases, products may not need to be adapted in either way (e.g., industrial equipment), while in other cases, it might have to be adapted in both (e.g., greeting cards, where the both occasions, language, and motivations for sending differ). Finally, a market may exist abroad for a product which has no analogue at home—e.g., hand-powered washing machines. Measuring country wealth.

Economics. There are two ways to measure the wealth of a country. The nominal per capita gross domestic product (GDP) refers to the value of goods and services produced per person in a country if this value in local currency were to be exchanged into dollars. Suppose, for example, that the per capita GDP of Japan is 3,500,000 yen and the dollar exchanges for 100 yen, so that the per capita GDP is (3,500,000/100)=$35,000. However, that $35,000 will not buy as much in Japan—food and housing are much more expensive there. Therefore, we introduce the idea of purchase parity adjusted per capita GDP, which reflects what this money can buy in the country. This is typically based on the relative costs of a weighted “basket” of goods in a country (e.g., 35% of the cost of housing, 40% the cost of food, 10% the cost of clothing, and 15% cost of other items). If it turns out that this measure of cost of living is 30% higher in Japan, the purchase parity adjusted GPD in Japan would then be ($35,000/(130%) = $26,923. (The Gross Domestic Product (GPD) and Gross National Product (GNP) are almost identical figures. The GNP, for example, includes income made by citizens working abroad, and does not include the income of foreigners working in the country. Traditionally, the GNP was more prevalent; today the GPD is more commonly used—in practice, the two measures fall within a few percent of each other.)

In general, the nominal per capita GPD is more useful for determining local consumers’ ability to buy imported goods, the cost of which are determined in large measure by the costs in the home market, while the purchase parity adjusted measure is more useful when products are produced, at local costs, in the country of purchase. For example, the ability of Argentineans to purchase micro computer chips, which are produced mostly in the U.S. and Japan, is better predicted by nominal income, while the ability to purchase toothpaste made by a U.S. firm in a factory in Argentina is better predicted by purchase parity adjusted income.

It should be noted that, in some countries, income is quite unevenly distributed so that these average measures may not be very meaningful. In Brazil, for example, there is a very large underclass making significantly less than the national average, and thus, the national figure is not a good indicator of the purchase power of the mass market. Similarly, great regional differences exist within some countries—income is much higher in northern Germany than it is in the former East Germany, and income in southern Italy is much lower than in northern Italy.

Methods of entry. With rare exceptions, products just don’t emerge in foreign markets overnight—a firm has to build up a market over time. Several strategies, which differ in aggressiveness, risk, and the amount of control that the firm is able to maintain, are available:

* Exporting is a relatively low risk strategy in which few investments are made in the new country. A drawback is that, because the firm makes few if any marketing investments in the new country, market share may be below potential. Further, the firm, by not operating in the country, learns less about the market (What do consumers really want? Which kinds of advertising campaigns are most successful? What are the most effective methods of distribution?) If an importer is willing to do a good job of marketing, this arrangement may represent a "win-win" situation, but it may be more difficult for the firm to enter on its own later if it decides that larger profits can be made within the country.
* Licensing and franchising are also low exposure methods of entry—you allow someone else to use your trademarks and accumulated expertise. Your partner puts up the money and assumes the risk. Problems here involve the fact that you are training a potential competitor and that you have little control over how the business is operated. For example, American fast food restaurants have found that foreign franchisers often fail to maintain American standards of cleanliness. Similarly, a foreign manufacturer may use lower quality ingredients in manufacturing a brand based on premium contents in the home country.
* Joint venture. Here, a firm partners up with a firm already in the country. Each partner contributes. Usually, the host country partner contributes expertise about the country and possibly some manufacturing facilities. The “guest” partner usually contributes technology and/or financial resources. This reduces risk and investment to some extent, but also reduces the control since agreements must now be made to satisfy the partner.
* Direct entry strategies, where the firm either acquires a firm or builds operations "from scratch" involve the highest exposure, but also the greatest opportunities for profits. The firm gains more knowledge about the local market and maintains greater control, but now has a huge investment. In some countries, the government may expropriate assets without compensation, so direct investment entails an additional risk. A variation involves a joint venture, where a local firm puts up some of the money and knowledge about the local market.

U.S. laws of particular interest to firms doing business abroad.

* Anti-trust. U.S. antitrust laws are generally enforced in U.S. courts even if the alleged transgression occurred outside U.S. jurisdiction. For example, if two Japanese firms collude to limit the World supply of VCRs, they may be sued by the U.S. government (or injured third parties) in U.S. courts, and may have their U.S. assets seized.
* The Foreign Corrupt Influences Act came about as Congress was upset with U.S. firms’ bribery of foreign officials. Although most if not all countries ban the payment of bribes, such laws are widely flaunted in many countries, and it is often useful to pay a bribe to get foreign government officials to act favorably. Firms engaging in this behavior, even if it takes place entirely outside the U.S., can be prosecuted in U.S. courts, and many executives have served long prison sentences for giving in to temptation. In contrast, in the past some European firms could actually deduct the cost of foreign bribes from their taxes! There are some gray areas here—it may be legal to pay certain “tips” –known as “facilitating payments”—to low level government workers in some countries who rely on such payments as part of their salary so long as these payments are intended only to speed up actions that would be taken anyway. For example, it may be acceptable to give a reasonable (not large) facilitating payment to get customs workers to process a shipment faster, but it would not be legal to pay these individuals to change the classification of a product into one that carries a lower tariff.
* Anti-boycott laws. Many Arab countries maintain a boycott of Israel, and foreigners that want to do business with them may be asked to join in this boycott by stopping any deals they do with Israel and certifying that they do not trade with that country. It is illegal for U.S. firms to make this certification even if they have not dropped any actual deals with Israel to get a deal with boycotters.
* Trading With the Enemy. It is illegal for U.S. firms to trade with certain countries that are viewed to be hostile to the U.S.—e.g., Libya and Iraq.

Marketing Research

Marketing research is often needed to ensure that we produce what customers really want and not what we think they want.

Primary vs. secondary research methods. There are two main approaches to marketing. Secondary research involves using information that others have already put together. For example, if you are thinking about starting a business making clothes for tall people, you don’t need to question people about how tall they are to find out how many tall people exist—that information has already been published by the U.S. Government. Primary research, in contrast, is research that you design and conduct yourself. For example, you may need to find out whether consumers would prefer that your soft drinks be sweater or tarter.

Research will often help us reduce risks associated with a new product, but it cannot take the risk away entirely. It is also important to ascertain whether the research has been complete. For example, Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to prefer the taste. However, consumers were not prepared to have this drink replace traditional Coke.

Several tools are available to the market researcher—e.g., mail questionnaires, phone surveys, observation, and focus groups. Please see the chart for advantages and disadvantages of each.

Surveys are useful for getting a great deal of specific information. Surveys can contain open-ended questions (e.g., “In which city and state were you born? ____________”) or closed-ended, where the respondent is asked to select answers from a brief list (e.g., “__Male ___ Female.” Open ended questions have the advantage that the respondent is not limited to the options listed, and that the respondent is not being influenced by seeing a list of responses. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful responses, sample sizes of over 100 are usually required because precision is essential. For example, if a market share of twenty percent would result in a loss while thirty percent would be profitable, a confidence interval of 20-35% is too wide to be useful.

Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates are typically quite low—typically from 5-20%. Phone-surveys get somewhat higher response rates, but not many questions can be asked because many answer options have to be repeated and few people are willing to stay on the phone for more than five minutes. Mall intercepts are a convenient way to reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face with an interviewer.

Surveys, as any kind of research, are vulnerable to bias. The wording of a question can influence the outcome a great deal. For example, more people answered no to the question “Should speeches against democracy be allowed?” than answered yes to “Should speeches against democracy be forbidden?” For face-to-face interviews, interviewer bias is a danger, too. Interviewer bias occurs when the interviewer influences the way the respondent answers. For example, unconsciously an interviewer that works for the firm manufacturing the product in question may smile a little when something good is being said about the product and frown a little when something negative is being said. The respondent may catch on and say something more positive than his or her real opinion. Finally, a response bias may occur—if only part of the sample responds to a survey, the respondents’ answers may not be representative of the population.

Focus groups are useful when the marketer wants to launch a new product or modify an existing one. A focus group usually involves having some 8-12 people come together in a room to discuss their consumption preferences and experiences. The group is usually led by a moderator, who will start out talking broadly about topics related broadly to the product without mentioning the product itself. For example, a focus group aimed at sugar-free cookies might first address consumers’ snacking preferences, only gradually moving toward the specific product of sugar-free cookies. By not mentioning the product up front, we avoid biasing the participants into thinking only in terms of the specific product brought out. Thus, instead of having consumers think primarily in terms of what might be good or bad about the product, we can ask them to discuss more broadly the ultimate benefits they really seek. For example, instead of having consumers merely discuss what they think about some sugar-free cookies that we are considering releasing to the market, we can have consumers speak about their motivations for using snacks and what general kinds of benefits they seek. Such a discussion might reveal a concern about healthfulness and a desire for wholesome foods. Probing on the meaning of wholesomeness, consumers might indicate a desire to avoid artificial ingredients. This would be an important concern in the marketing of sugar-free cookies, but might not have come up if consumers were asked to comment directly on the product where the use of artificial ingredients is, by virtue of the nature of the product, necessary.

Focus groups are well suited for some purposes, but poorly suited for others. In general, focus groups are very good for getting breadth—i.e., finding out what kinds of issues are important for consumers in a given product category. Here, it is helpful that focus groups are completely “open-ended:” The consumer mentions his or her preferences and opinions, and the focus group moderator can ask the consumer to elaborate. In a questionnaire, if one did not think to ask about something, chances are that few consumers would take the time to write out an elaborate answer. Focus groups also have some drawbacks, for example: • They represent small sample sizes. Because of the cost of running focus groups, only a few groups can be run. Suppose you run four focus groups with ten members each. This will result in an n of 4(10)=40, which is too small to generalize from. Therefore, focus groups cannot give us a good idea of: • What proportion of the population is likely to buy the product. • What price consumers are willing to pay. • The groups are inherently social. This means that: • Consumers will often say things that may make them look good (i.e., they watch public television rather than soap operas or cook fresh meals for their families daily) even if that is not true. • Consumers may be reluctant to speak about embarrassing issues (e.g., weight control, birth control).

Personal interviews involve in-depth questioning of an individual about his or her interest in or experiences with a product. The benefit here is that we can get really into depth (when the respondent says something interesting, we can ask him or her to elaborate), but this method of research is costly and can be extremely vulnerable to interviewer bias.

Projective techniques are used when a consumer may feel embarrassed to admit to certain opinions, feelings, or preferences. For example, many older executives may not be comfortable admitting to being intimidated by computers. It has been found that in such cases, people will tend to respond more openly about “someone else.” Thus, we may ask them to explain reasons why a friend has not yet bought a computer, or to tell a story about a person in a picture who is or is not using a product. The main problem with this method is that it is difficult to analyze responses.

Observation of consumers is often a powerful tool. Looking at how consumers select products may yield insights into how they make decisions and what they look for. For example, some American manufacturers were concerned about low sales of their products in Japan. Observing Japanese consumers, it was found that many of these Japanese consumers scrutinized packages looking for a name of a major manufacturer—the product specific-brands that are common in the U.S. (e.g., Tide) were not impressive to the Japanese, who wanted a name of a major firm like Mitsubishi or Proctor & Gamble. Observation may help us determine how much time consumers spend comparing prices, or whether nutritional labels are being consulted.

Physiological measures are occasionally used to examine consumer response. For example, advertisers may want to measure a consumer’s level of arousal during various parts of an advertisement.

Some cautions should be heeded in marketing research. First, in general, research should only be commissioned when it is worth the cost. Thus, research should normally be useful in making specific decisions (what size should the product be? Should the product be launched? Should we charge $1.75 or $2.25?)

Secondly, marketing research can be, and often is, abused. Managers frequently have their own “agendas” (e.g., they either would like a product to be launched or would prefer that it not be launched so that the firm will have more resources left over to tackle their favorite products). Often, a way to get your way is to demonstrate through “objective” research that your opinions make economic sense. One example of misleading research, which was reported nationwide in the media, involved the case of “The Pentagon Declares War on Rush Limbaugh.” The Pentagon, within a year of the election of Democrat Bill Clinton, reported that only 4.2% of soldiers listening to the Armed Forces Network wanted to hear Rush Limbaugh. However, although this finding was reported without question in the media, it was later found that the conclusion was based on the question “What single thing can we do to improve programming?” If you did not write in something like “Carry Rush Limbaugh,” you were counted as not wanting to hear him.

Segmentation, Targeting, and Positioning

Segmentation, targeting, and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that “You can’t be all things to all people,” and experience has demonstrated that firms that specialize in meeting the needs of one group of consumers over another tend to be more profitable.

Generically, there are three approaches to marketing:

* In the undifferentiated strategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where one competitor really can’t offer much that another one can’t. Usually, this is the case only for commodities.
* In the concentrated strategy, one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned seating for low prices.
* In contrast, most airlines follow the differentiated strategy: They offer high priced tickets to those who are inflexible in that they cannot tell in advance when they need to fly and find it impractical to stay over a Saturday. These travelers—usually business travelers—pay high fares but can only fill the planes up partially. The same airlines then sell some of the remaining seats to more price sensitive customers who can buy two weeks in advance and stay over.

Note that segmentation calls for some tough choices. There may be a large number of variables that can be used to differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome to work with more than a few at a time. Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers. We might thus decide, for example, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity—willingness to pay for brand names; and (4) heavy vs. light consumers. We now put these variables together to arrive at various combinations. Several different kinds of variables can be used for segmentation.

Demographic variables essentially refer to personal statistics such as income, gender, education, location (rural vs. urban, East vs. West), ethnicity, and family size. Campbell’s soup, for instance, has found that Western U.S. consumers on the average prefer spicier soups—thus, you get a different product in the same cans at the East and West coasts. Facing flat sales of guns in the traditional male dominated market, a manufacturer came out with the Lady Remmington, a more compact, handier gun more attractive to women.

Taking this a step farther, it is also possible to segment on lifestyle and values. Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd. Another basis for segmentation is behavior. Some consumers are “brand loyal”—i.e., they tend to stick with their preferred brands even when a competing one is on sale. Some consumers are “heavy” users while others are “light” users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers—presumably a rather intoxicated group.

One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while others prefer the “clean” feeling of unscented soap (the “Ivory” segment). Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath freshening. In the next step, we decide to target one or more segments. Our choice should generally depend on several factors. First, how well are existing segments served by other manufacturers? It will be more difficult to appeal to a segment that is already well served than to one whose needs are not currently being served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that a downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we have strengths as a company that will help us appeal particularly to one group of consumers? Firms may already have an established reputation. While McDonald’s has a great reputation for fast, consistent quality, family friendly food, it would be difficult to convince consumers that McDonald’s now offers gourmet food. Thus, McD’s would probably be better off targeting families in search of consistent quality food in nice, clean restaurants.

Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.” The Visual C software programming language, in contrast, is aimed a “techies.”

Repositioning involves an attempt to change consumer perceptions of a brand, usually because the existing position that the brand holds has become less attractive. Sears, for example, attempted to reposition itself from a place that offered great sales but unattractive prices the rest of the time to a store that consistently offered “everyday low prices.” Repositioning in practice is very difficult to accomplish. A great deal of money is often needed for advertising and other promotional efforts, and in many cases, the repositioning fails.

Product

Products come in several forms. Consumer products can be categorized as convenience goods, for which consumers are willing to invest very limited shopping efforts. Thus, it is essential to have these products readily available and have the brand name well known. Shopping goods, in contrast, are goods in which the consumer is willing to invest a great deal of time and effort. For example, consumers will spend a great deal of time looking for a new car or a medical procedure. Speciality goods are those that are of interest only to a narrow segment of the population—e.g., drilling machines. Industrial goods can also be broken down into subgroups, depending on their uses. It should also be noted that, within the context of marketing decisions, the term product refers to more than tangible goods—a service can be a product, too.

A firm’s product line or lines refers to the assortment of similar things that the firm holds. Brother, for example, has both a line of laser printers and one of typewriters. In contrast, the firm’s product mix describes the combination of different product lines that the firm holds. Boeing, for example, has both a commercial aircraft and a defense line of products that each take advantage of some of the same core competencies and technologies of the firm. Some firms have one very focused or narrow product line (e.g., KFC does only chicken right) while others maintain numerous lines that hopefully all have some common theme. This represents a wide product mix 3M, for example, makes a large assortment of goods that are thought to be related in the sense that they use the firm’s ability to bond surfaces together. Depth refers to the variety that is offered within each product line. Maybeline offers a great deal of depth in lipsticks with subtle differences in shades while Morton Salt offers few varieties of its product.

Products may be differentiated in several ways. Some may be represented as being of superior quality (e.g., Maytag), or they may differ in more arbitrary ways in terms of styles—some people like one style better than another, while there is no real consensus on which one is the superior one. Finally, products can be differentiated in terms of offering different levels of service—for example, Volvo offers a guarantee of free, reliable towing anywhere should the vehicle break down. American Express offers services not offered by many other charge cards.

New product development tends to happen in stages. Although firms often go back and forth between these idealized stages, the following sequence is illustrative of the development of a new product:

* New product strategy development. Different firms will have different strategies on how to approach new products. Some firms have stockholders who want to minimize risk and avoid investing in too many new innovations. Some firms can only survive if they innovate frequently and have stockholders who are willing to take this risk. For example, Hewlett-Packard has to constantly invent new products since competitors learn to work around its patents and will be able to manufacture the products at a lower cost.
* Idea generation. Firms solicit ideas as to new products it can make. Ideas might come from customers, employees, consultants, or engineers. Many firms receive a large number of ideas each year and can only invest in some of them.
* Screening and evaluation: Some products that after some analysis are clearly not feasible or are not consistent with the core competencies of the firm are eliminated.
* Business analysis. Ideas are now exposed to more rigorous analysis. Profit projections, risks, market size, and competitive response are considered. If promising, market research may be done.
* Development: The product is designed and manufacturing facilities are planned.
* Market testing. Frequently, firms will try to “test” a product in one region to see if it will sell in reality before it is released nationally and internationally. There is a lesser risk if the firm only commits money to advertising and other marketing efforts in one region. Retailers will also be more receptive in other parts of the country and world if it has been demonstrated that the product sold well in one region. The firm may also experiment with different prices for the product.
* Commercialization. Facilities to manufacture the product on a larger scale are now put into operation and the firm starts a national marketing campaign and distribution effort.

Products often go through a life cycle. Initially, a product is introduced. Since the product is not well known and is usually expensive (e.g., as microwave ovens were in the late 1970s), sales are usually limited. Eventually, however, many products reach a growth phase—sales increase dramatically. More firms enter with their models of the product. Frequently, unfortunately, the product will reach a maturity stage where little growth will be seen. For example, in the United States, almost every household has at least one color TV set. Some products may also reach a decline stage, usually because the product category is being replaced by something better. For example, typewriters experienced declining sales as more consumers switched to computers or other word processing equipment. The product life cycle is tied to the phenomenon of diffusion of innovation. When a new product comes out, it is likely to first be adopted by consumers who are more innovative than others—they are willing to pay a premium price for the new product and take a risk on unproven technology. It is important to be on the good side of innovators since many other later adopters will tend to rely for advice on the innovators who are thought to be more knowledgeable about new products for advice.

At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm & Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also created.

It is sometimes useful to think of products as being either new or existing. Many firms today rely increasingly on new products for a large part of their sales. New products can be new in several ways. They can be new to the market—no one else ever made a product like this before. For example, Chrysler invented the minivan. Products can also be new to the firm—another firm invented the product, but the firm is now making its own version. For example, IBM did not invent the personal computer, but entered after other firms showed the market to have a high potential. Products can be new to the segment—e.g., cellular phones and pagers were first aimed at physicians and other price-insensitive segments. Later, firms decided to target the more price-sensitive mass market. A product can be new for legal purposes. Because consumers tend to be attracted to “new and improved” products, the Federal Trade Commission (FTC) only allows firms to put that label on reformulated products for six months after a significant change has been made.

The diffusion of innovation refers to the tendency of new products, practices, or ideas to spread among people. Usually, when new products or ideas come about, they are initially only adopted by a small group of people. Later, many innovations spread to other people. The bell shaped curve frequently illustrates the rate of adoption of a new product. Cumulative adoptions are reflected by the S-shaped curve. The saturation point is the maximum proportion of consumers likely to adopt a product. In the case of refrigerators in the U.S., the saturation level is nearly one hundred percent of households. The figure will almost certainly be well below that for video games that, even when spread out to a large part of the population, will be of interest to far from everyone.

Several specific product categories have case histories that illustrate important issues in adoption. Until some time in the 1800s, few physicians bothered to scrub prior to surgery, even though new scientific theories predicted that small microbes not visible to the naked eye could cause infection. Younger and more progressive physicians began scrubbing early on, but they lacked the stature to make their older colleagues follow.

ATM cards spread relatively quickly. Since the cards were used in public, others who did not yet hold the cards could see how convenient they were. Although some people were concerned about security, the convenience factors seemed to be a decisive factor in the “tug-of-war” for and against adoption.

The case of credit cards was a bit more complicated and involved a “chicken-and-egg” paradox. Accepting credit cards was not a particularly attractive option for retailers until they were carried by a large enough number of consumers. Consumers, in contrast, were not particularly interested in cards that were not accepted by a large number of retailers. Thus, it was necessary to “jump start” the process, signing up large corporate accounts, under favorable terms, early in the cycle, after which the cards became worthwhile for retailers to accept.

Rap music initially spread quickly among urban youths in large part because of the low costs of recording. Later, rap music became popular among a very different segment, suburban youths, because of its apparently authentic depiction of an exotic urban lifestyle.

Hybrid corn was adopted only slowly among many farmers. Although hybrid corn provided yields of about 20% more than traditional corn, many farmers had difficulty believing that this smaller seed could provide a superior harvest. They were usually reluctant to try it because a failed harvest could have serious economic consequences, including a possible loss of the farm. Agricultural extension agents then sought out the most progressive farmers to try hybrid corn, also aiming for farmers who were most respected and most likely to be imitated by others. Few farmers switched to hybrid corn outright from year to year. Instead, many started out with a fraction of their land, and gradually switched to 100% hybrid corn when this innovation had proven itself useful.

Several forces often work against innovation. One is risk, which can be either social or financial. For example, early buyers of the CD player risked that few CDs would be recorded before the CD player went the way of the 8 track player. Another risk is being perceived by others as being weird for trying a “fringe” product or idea. For example, Barbara Mandrell sings the song “I Was Country When Country Wasn’t Cool.” Other sources of resistance include the initial effort needed to learn to use new products (e.g., it takes time to learn to meditate or to learn how to use a computer) and concerns about compatibility with the existing culture or technology. For example, birth control is incompatible with religious beliefs that predominate in some areas, and a computer database is incompatible with a large, established card file.

Innovations come in different degrees. A continuous innovation includes slight improvements over time. Very little usually changes from year to year in automobiles, and even automobiles of the 1990s are driven much the same way that automobiles of the 1950 were driven. A dynamically continuous innovation involves some change in technology, although the product is used much the same way that its predecessors were used—e.g., jet vs. propeller aircraft. A discontinous innovation involves a product that fundamentally changes the way that things are done—e.g., the fax and photocopiers. In general, discontinuous innovations are more difficult to market since greater changes are required in the way things are done, but the rewards are also often significant.

Several factors influence the speed with which an innovation spreads. One issue is relative advantage (i.e., the ratio of risk or cost to benefits). Some products, such as cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other products, such as automobile satellite navigation systems, entail some advantages, but the cost ratio is high. Lower priced products often spread more quickly, and the extent to which the product is trialable (farmers did not have to plant all their land with hybrid corn at once, while one usually has to buy a cellular phone to try it out) influence the speed of diffusion. Finally, the extent of switching difficulties influences speed—many offices were slow to adopt computers because users had to learn how to use them.

Some cultures tend to adopt new products more quickly than others, based on several factors:  Modernity: The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products often don’t fare too well. The United States, in contrast, tends to value progress.  Homophily: The more similar to each other that members of a culture are, the more likely an innovation is to spread—people are more likely to imitate similar than different models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high.  Physical distance: The greater the distance between people, the less likely innovation is to spread.  Opinion leadership: The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance.

It should be noted that innovation is not always an unqualifiedly good thing. Some innovations, such as infant formula adopted in developing countries, may do more harm than good. Individuals may also become dependent on the innovations. For example, travel agents who get used to booking online may be unable to process manual reservations.

Sometimes innovations are disadopted. For example, many individuals disadopt cellular phones if they find out that they don’t end up using them much.

Branding. An essential issue in product management is branding. Different firms have different policies on the branding on their products. While 3M puts its brand name on a great diversity of products, Proctor & Gamble, on the opposite extreme, maintains a separate brand name for each product. In general, the use of brand extensions should be evaluated on the basis of the compatibility of various products—can the same brand name represent different products without conflict or confusion? Coca Cola for many years resisted putting its coveted brand name on a diet soft drink. In the old days, available sweeteners such as saccharin added an undesirable aftertaste, implying a clear sacrifice in taste for the reduction in calories. Thus, to avoid damaging the brand name Coca Cola, Coke instead named its diet cola Tab. Only after Nutrasweet was introduced was the brand extension allowed. Research shows that consumers are more receptive to brand extensions when (1) the company appears to have the expertise to make the product [McDonald’s was not thought as credible as a photo-finishing service], (2) the products are congruent (compatible), and (3) the brand extension is not seen as being exploitative of a high quality brand name [e.g., one should not use a premium brand name like Heineken to make a trivially easy product like popcorn].

Co-branding involves firms using two or more brands together to maximize appeal to consumers. Some ice cream makers, for example, use their own brand name in addition to naming the brands of ingredients contained. Sometimes, this strategy may help one brand at the expense of the other. It is widely believed, for example, that the “Intel inside” messages, which Intel paid computer makers to put on their products and packaging, reduced the value of the computer makers’ brand names because the emphasis was now put on the Intel component.

Certain “peripheral” characteristics of products may “signal” quality or other value to consumers. For some products, packaging accounts for a large part of the total product manufacturing cost. Long warranties often signal to consumers that the product is of good quality since the manufacturer is willing to take responsibility for its functioning.

There is no clear distinction between a “pure” tangible product and a service. Most products contain some of both. A computer, for example, is a tangible product, but it often comes with a warranty and software updates.

Distribution

Distribution (also known as the place variable in the marketing mix, or the 4 Ps) involves getting the product from the manufacturer to the ultimate consumer. Distribution is often a much underestimated factor in marketing. Many marketers fall for the trap that if you make a better product, consumers will buy it. The problem is that retailers may not be willing to devote shelf-space to new products. Retailers would often rather use that shelf-space for existing products have that proven records of selling.

Although many firms advertise that they save the consumer money by selling direct and “eliminating the middleman,” this is a dubious claim. The truth is that intermediaries, such as retailers and wholesalers, tend to add efficiency because they can do specialized tasks better than the consumer or the manufacturer. Because wholesalers and retailers exist, the consumer can buy one pen at a time in a store located conveniently rather than having to order it from a distant factory. Thus, distributors add efficiency by:

* Breaking bulk—the consumer can buy small quantities at a time. Modest scale retailers (e.g., a college bookstore) can buy modest quantities.
* Distributing. The consumers can buy at a neighborhood store, which in turn can buy from a regional warehouse.
* Carrying inventory
* Financing

Channel structures vary somewhat by the nature of the product. Jet aircraft are custom made and shipped directly to the airline. Automobiles, because they are difficult to move, are shipped directly to a dealer. Other products are shipped through a wholesaler who can more efficiently handle, and combine, products from many different suppliers. Several layers of wholesalers may exist, depending on the product. Occasionally, agents may also be involved. Agents usually do not handle products, but instead take care of the business aspect of negotiating with distributors, which manufacturers may feel uncomfortable or ill prepared for doing themselves.

Manufacturers of different kinds of products have different interests with respect to the availability of their products. For convenience products such as soft drinks, it is essential that your product be available widely. Chances are that if a store does not have a consumer’s preferred brand of soft drinks, the consumer will settle for another brand rather than taking the trouble to go to another store. Occasionally, however, manufacturers will prefer selective distribution since they prefer to have their products available only in upscale stores.

Parallel distribution structures refer to the fact that products may reach consumers in different ways. Most products flow through the traditional manufacturer --> retailer --> consumer channel. Certain large chains may, however, demand to buy directly from the manufacturer since they believe they can provide the distribution services at a lower cost themselves. In turn, of course, they want lower prices, which may anger the traditional retailers who feel that this represents unfair competition. Firms may also choose to utilize factory outlet stores. To allay concerns held by conventional stores, however, these factory outlet stores are usually located in areas where they are not easily accessible.

We must consider what is realistically available to each firm. A small manufacturer of potato chips would like to be available in grocery stores nationally, but this may not be realistic. We need to consider, then, both who will be willing to carry our products and whom we would actually like to carry them. In general, for convenience products, intense distribution is desirable, but only brands that have a certain amount of power—e.g., an established brand name—can hope to gain national intense distribution.

Note that for convenience goods, intense distribution is less likely to harm the brand image—it is not a problem, for example, for Haagen Dazs to be available in a convenience store along with bargain brands—it is expected that people will not travel much for these products, so they should be available anywhere the consumer demands them. However, in the category of shopping goods, having Rolex watches sold in discount stores would be undesirable—here, consumers do travel, and goods are evaluated by customers to some extent based on the surrounding merchandise.

In general, a brand can expect lesser distribution in its early stages—fewer retailers are motivated to carry it. Similarly, when a product category is new, it will be available in fewer stores—e.g., in the early days, computer disks were available only in specialty stores, but now they can be found in supermarkets and convenience stores as well. Certain products that are not well established may have to get their start on "infomercials," only slowly getting entry into other types out outlets. (Please see PowerPoint chart).

Different parties involved in the marketing of products tend to have different, and often conflicting, interests:

* Full service retailers tend dislike intensive distribution.
* Low service channel members can "free ride" on full service sellers.
* Manufacturers may be tempted toward intensive distribution—appropriate only for some; may be profitable in the short run.

Market balance suggests a need for diversity in product categories where intensive distribution is appropriate. Service requirements also differ by product category.

Diversion occurs when merchandise intended for one market is bought up by a distributor that then ships it to a different market. Sometimes, a manufacturer will run a promotion in one region but not in another, and speculators will then buy extra quantity in the promoted area and ship it another area. The speculator will then sell it to local retailers or distributors for a price slightly lower than what is being charged through the regular channel but at a price that still allows a nice profit. Certain products sell for different prices in different countries. As we discussed in the unit of international marketing, a gray market occurs when a product is bought in one country and exported to another where the price is generally higher. Both Luis Vuitton suitcases and golf clubs were imported to Japan, depressing prices there.

Integrated Marketing Communication and Promotion

Integrated Marketing Communication (IMC) involves the idea that a firm’s promotional efforts should be coordinated to achieve the best combined effects of the firm’s efforts. Resources are allocated to achieve those outcomes that the firm values the most. Promotion involves a number of tools we can use to increase demand for our products.

The most well known component of promotion is advertising, but we can also use tools such as the following:

* Public relations (the firm’s staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we can’t control what the media will say. Note that this is particularly a useful tool for small and growing businesses—especially those that make a product which is inherently interesting to the audience.
* Trade promotion. Here, the firm offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales.
* Sales promotion. Consumers are given either price discounts, coupons, or rebates.
* Personal selling. Sales people either make “cold” calls on potential customers and/or respond to inquiries.
* In-store displays. Firms often pay a great deal of money to have their goods displayed prominently in the store. More desirable display spaces include: end of an aisle, free-standing displays, and near the check-out counter. Occasionally, a representative may display the product.
* Samples.

Generally, a sequence of events is needed before a consumer will buy a product. This is known as a “hierarchy of effects.” The consumer must first be aware that the product exists. He or she must then be motivated to give some attention to the product and what it may provide. In the next stage, the need is for the consumer to evaluate the merits of the product, hopefully giving the product a try. A good experience may lead to continued use. Note that the consumer must go through the earlier phases before the later ones can be accomplished.

Promotional objectives that are appropriate differ across the Product Life Cycle (PLC). Early in the PLC—during the introduction stage—the most important objective is creating awareness among consumers. For example, many consumers currently do not know the Garmin is making auto navigation devices based on the global position satellite (GPS) system and what this system can do for them. A second step is to induce trial—to get consumers to buy the product for the first time. During the growth stage, important needs are persuading the consumer to buy the product and prefer the brand over competing ones. Here, it is also important to persuade retailers to carry the brand, and thus, a large proportion of promotional resources may need to be devoted to retailer incentives. During the maturity stage, the firm may need to focus on maintaining shelf space, distribution channels, and sales.

Different promotional approaches will be appropriate depending on the stage of the consumer’s decision process that the marketer wishes to influence. Prior to the purchase, the marketer will want to establish a decision to purchase the product and the specific brand. Here, samples might be used to induce trial. During the purchase stage, when the consumer is in the retail store, efforts may be made to ensure that the consumer will choose one’s specific brands. Paying retailers for preferred shelf space as well as point of purchase (POP) displays and coupons may be appropriate. After the purchase, an appropriate objective may be to induce a repurchase or to influence the consumer to choose the same brand again. Thus, the package may contain a coupon for future purchase.

There are two main approaches to promoting products

* The “push” strategy is closely related to the “selling concept” and involves “hard” sell and aggressive price promotions to sell at this specific purchase occasion.
* In contrast, the “pull” strategy emphasizes creating demand for the brand so that consumers will come to the store with the intention of buying the product. Hallmark, for example, has invested a great deal in creating a preference for its greeting cards among consumers.

There are several ways that a firm can budget for advertising. The strategy used depends on the firm’s policy and internal politics. Some of the methods commonly used are:

* Percentage of sales. Here, the firm decides to base its advertising budget on how much has been sold. This appears to be an “objective” way to make the budget decision and to “reward” performing brands and products with resources. However, this method is quite arbitrary. A firm may find it worthwhile to invest heavily in advertising up-front—before the product has begun to sell significantly— so that a promising product can achieve its potential. When a product is performing well, staying with a fixed percentage may also result in spending more than is cost-effective.
* Percentage of profits. This is similar to the above, but takes into consideration that some products may have larger margins than others. Thus, a product with lesser sales but high margins may be a better investment than one with high sales but low margins. Still, however, this method is arbitrary and questionable because of the factors listed above.
* Competitive parity. This entails setting the budget to match competitors. Note, however, that different brands may have different needs. Coke and Pepsi may be competing “head-on,” and competitive parity may be appropriate. In contrast, some firms may be targeting customers who are relatively brand loyal while others target “switchers.” The firm that targets loyal customers may be better off spending money on product quality than on promotion.
* Affordability. This entails budgeting based on the resources that the firm has available. Smaller firms obviously do not have the same resources as larger ones. However, the firm should still evaluate how effective such a budget will be in meeting the brand’s needs. A firm may be able to afford to spend more than is appropriate. In contrast, other firms may not be able to spend what is needed to adequately influence consumers. In such cases, it may be more appropriate for the firm to try to sell of this brand rather than fighting a losing battle.
* Objective and task. This method sets the budget based on what is needed to achieve what the firm has set out to accomplish. The ultimate budget may then have little relation to the factors discussed above.

There are several types of advertising. In terms of product advertising, the “pioneering” ad seeks to create awareness of a product and brand and to instill an appreciation among consumers for its possibilities. The competitive or persuasive ad attempts to convince the consumer either of the performance of the product and/or how it is superior in some way to that of others. Comparative advertisements are a prime example of this. For instance, note the ads that show that some trash bags are more durable than others. Reminder advertising seeks to keep the consumer believing what other ads have already established. For example, Coca Cola ads tend not to provide new information but keep reinforcing what a great drink it is.

Developing an advertising program entails several steps:

* Identifying the target audience. Market reports can be bought that investigate the media habits of consumers of different products and/or the segments that the firm has chosen to target.
* Determining appropriate advertising objectives. As discussed, these objectives might include awareness, trial, repurchase, inducing consumers to switch from another brand, or developing a preference for the brand.
* Settling on an advertising budget.
* Designing the advertisements. Some commonly used approaches:
o Information/persuasion. Comparative ads attempt to get consumers to believe that the sponsoring product is better. Although these are frequently disliked by Americans, they tend to be among the most effective ads in the U.S. Comparative advertising is illegal in some countries and is considered very inappropriate culturally in some societies, especially in Asia.
o Fear appeals try to motivate consumers by telling them the consequences of not using a product. Mouthwash ads, for example, talk about the how gingivitis and tooth loss can result from poor oral hygiene. It is important, however, that a specific way to avoid the feared stimulus be suggested directly in the ad. Thus, simply by using the mouthwash advertised, these terrible things can be avoided.
o Sex appeals are more common—and more explicit—in some cultures than in others. Their effectiveness depends a great deal on how well such ads are designed for the specific product category. In many cases, sex appeal is used more to get the consumer’s attention than for actual persuasion. o Humor appeal. The use of humor in advertisements is quite common. This method tends not to be particularly useful in persuading the consumer. However, more and more advertisers find themselves using humor in order to compete for the consumer’s attention. Often, the humor actually draws attention away from the product—people will remember what was funny in the ad but not the product that was advertised. Thus, for ads to be effective, the product advertised should be an integral part of what is funny.

Numerous media are available for the advertiser to choose from. Each medium tends to have advantages and disadvantages.

It is essential to pretest advertisements to see how effective they actually are in influencing consumers. An ad may have to be redesigned if it is found not be to be as effective as targeted. Note that selecting advertisements is often a “numbers game” where a lot of advertisements are created and the ones that “test” best are selected.

The effectiveness of advertising is a highly controversial topic. Research suggests that in many cases advertising leads to a relatively modest increase in sales. One study suggests, for example, that when a firm increases its advertising spending by 1%, sales go up by 0.05%. (The same research found that, in contrast, if prices are lowered by 1%, sales tend to increase by 2%). In general, it appears that advertising is more effective in selling durable goods (e.g., stereo systems, cars, refrigerators, and furniture) than for non-durable goods (e.g., restaurant meals, candy bars, toilet paper, and bottled water). Also, advertising appears to be more effective for new products. This suggests that advertising is probably most effective for providing information (rather than persuading people). Note that many advertising agencies make a large part of their money on commissions on advertising sold. Thus, they have a vested interest in selling as much advertising as possible, and may strongly advise clients to spend excessive amounts on advertising.

Research suggests that advertising effectiveness follows a sort of “S-“ shaped curve. Very small amounts of advertising are too small to truly register with consumers. At the medium level, advertising may be effective. However, above a certain level (labeled “saturation point” on the chart), additional adverting appears to have a limited effect. (This is comparable to the notion of “diminishing returns to scale” encountered in economics).

There are several potential ways to measure advertising effectiveness. Two main categories include:

* “Field” based studies. These studies look at what happens with real consumers in real life. Thus, for example, we can examine what happens to sales of a company’s products when the firm increases advertising. Unfortunately, this is often a misleading way to measure advertising impact because we live in a “messy” world where other factors influence sales as well. For example, a soft drink firm could conclude that there is very little correlation between advertising and sales because another, much more powerful factor is at work: temperature. That is, the firm may find that although a great deal of advertising is done in the winter, sales are greater in summer months because people drink more soft drinks in hot weather. Note that the choice of brand of soft drink purchased in the summer may very well be influenced by advertising heard at other times.
* Laboratory studies. To get around the confounds imposed by nature, advertising reseachers often use artificial situations to evaluate advertising. This sacrifices the use of real consumers in real settings, but allows the marketer to control sources of influence. An advertising firm may hire people to come in and participate in research. The consumers may come in and be asked to view some television and respond to a questionnaire about the programming later. Half of the subjects can then see a version which includes an ad to be tested (the other half is known as the “control” group, which will serve as a basis for comparison). We can now compare the two groups on factors such as attitude toward the brand, purchase intention, and preference.

A significant objective of advertising is attitude change. A consumer’s attitude toward a product refers to his or her beliefs about, feeling toward, and purchase intentions for the product. Beliefs can be both positive (e.g., for McDonald’s food: tastes good, is convenient) and negative (is high in fat). In general, it is usually very difficult to change deeply held beliefs. Thus, in most cases, the advertiser may better off trying to add a belief (e.g., beef is convenient) rather than trying to change one (beef is really not very fatty). Consumer receptivity to messages aimed at altering their beliefs will tend to vary a great deal depending on the nature of the product. For unimportant products such as soft drinks, research suggests that consumers are often persuaded by having a large number of arguments with little merit presented (e.g., the soda comes in a neat bottle, the bottle contains five percent more soda than competing ones). In contrast, for high involvement, more important products, consumers tend to scrutinize arguments more closely, and will tend to be persuaded more by high quality arguments.

Celebrity endorsements are believed to follow a similar pattern of effectiveness. For trivial products, a popular endorser is often effective regardless of his or her qualifications to endorse (e.g, Bill Cosby endorses Coca Cola and Jell-O without having particular credentials to do so). On the other hand, for more important products, consumers will often scrutinize the endorser’s credentials. For example, a basket ball player may be perceived as knowledgeable about athletic shoes, but not particularly so about life insurance.

Pricing

Please see special section on pricing.

Direct Marketing

Direct marketing involves bypassing the retailer in reaching the consumer. Generally, this is not cost-effective, but exceptional situations may make it so. For example, certain customers may buy in very large quantities. Others may be spread over large geographic areas and require specialized products (e.g., beekeepers).

Direct marketing provides exceptional opportunities for segmentation. An excellent tool is the so called “merge-purge” technique. Marketers can buy lists of names and addresses of consumers from numerous sources (e.g., vehicle registrations, college enrollment, magazine subscriptions, catalog purchases). One can then combine different sources (e.g., surfers are likely to live in areas indicated by coastal zip codes, may subscribe to surfing magazines, and may have made purchases from surfing goods catalogs) and eliminate the overlaps (those people who appear on more than one list). Thus, we can target our potential buyers more closely than we could by advertising in newspapers (which are not read by many surfers and also reach a large number of non-surfers who are not interested in our products).

A great deal of interest has arisen in recent years on the potential for marketing on the Internet. While the jury is still out on this medium’s ultimate potential, sales so far have been limited, although a large potential may exist. It should be noted that a large segment of the population in the U.S. is still not “connected,” with numbers being even lower in even many developed countries. Many consumers are also reluctant to provide credit cards and other personal information on the Net, although attitudes in this area may change with. Note that the Internet may serve purposes other than direct sales. For example, the Internet is a good way to provide information to consumers, and this can be done at a relatively low cost.

Electronic Commerce

Online marketing can serve several purposes:

* Actual sales of products—e.g., Amazon.com.
* Promotion/advertising: Customers can be quite effectively targeted in many situations because of the context that they, themselves, have sought out. For example, when a consumer searches for a specific term in a search engine, a “banner” or link to a firm selling products in that area can be displayed. Print and television advertisements can also feature the firm’s web address, thus inexpensively drawing in those who would like additional information.
* Customer service: The site may contain information for those who no longer have their manuals handy and, for electronic products, provide updated drivers and software patches.
* Market research: Data can be collected relatively inexpensively on the Net. However, the response rates are likely to be very unrepresentative and recent research shows that it is very difficult to get consumers to read instructions. This is one of the reasons why the quality of data collected online is often suspect.

There are many obstacles to the growth of e-commerce:

* Reach: Although the majority of U.S. households now have computers connected to the Internet, a very large minority does not, and penetration rates are considerably lower in some countries. In foreign countries, even those households that have computers may be reluctant to spend time online due to the per minute charges, which discourage the more leisurely “browsing” American style.
* Concerns about privacy: A number of consumers are concerned about giving up information to marketers that can easily be collected electronically. Naturally, few consumers would like information about their medical status widely collected by firms, but many consumers are even reluctant to have marketers know the ages of their children and past book purchase records.
* Reputational issues: Although not as much of a problem as before, firms operating online or through direct mail have often been viewed with suspicion since consumers may question whether they will be around if they do not deliver satisfactorily.
* Costs. During the “boom,” Internet firms were not expected to be efficient and thus developed bad habits. Although shipping and handling charges can help cover costs of shipping and administration, these often take away the attractiveness of Internet shopping. The most successful e-commerce firms turn out to be the ones that have been successful doing other kinds of direct marketing (e.g., catalog sales) before and have developed the discipline and efficiency required there. For products that have relatively high absolute margins—e.g., computers—there is more money to cover administrative costs.
* Language. Since the Internet reaches around the world, it is often difficult to match viewers with their preferred languages. Because U.S. firms and individuals tended to predominate among those first to occupy the Web, most sites are in U.S. English. British speakers of English generally do not perceive American English as American—they tend to perceive spelling such as “color” rather than their “colour” as misspellings. French consumers do not like to have to click to get from an English language to a French language site. It is estimated that by the year 2007, the majority of web surfers will not be comfortable in English and will want sites in their own languages.
* Government regulations: In the U.S., the government has tried to keep its hands off the Net as much as possible to foster its growth as a trade area, and a recently expired moratorium on new sales taxes was even instituted to make Internet shopping more attractive. However, governments in many other countries are more forceful in their regulations. In countries such as China, where sites can be used to spread “subversive” ideas, there is a great deal of government scrutiny and suspicion.
* Cultural obstacles. The whole purpose of the web is to make information readily available. In countries where information is closely guarded, that is a frightening idea. There is often also a desire for personal interaction, which may be required to establish the trust needed to secure a deal.
* Payment issues. U.S. consumers exposed to credit card fraud have very limited liabilities, but these protections do not exist to the same extent in Europe or Asia. In China, much of the purpose of the Internet is defeated with some 80% of transactions being completed off-line, usually with funding instruments other than credit cards.

There are a number of problems in running and developing web sites. First of all, the desired domain name may not be available—e.g., American Airlines could not get “American.com” and had to settle for “AmericanAir.com.” There is also a question having your site identified to potential users. Research has found that most search engines have a great deal of “false hits” (sites irrelevant that are identified in a search—e.g., information about computer languages when the user searches for foreign language instruction) and “misses” (sites that would have been relevant but are not identified). It is crucial for a firm to have its site indexed favorably in major search engines such as Yahoo, AOLFind, and Google. However, there is often a constant struggle between web site operators and the search engines to outguess each other, with the web promoters trying to “spam” the search engines with repeated usage of terms and “meta tags.” The fact that many computer users employ different web browsers raises questions about compatibility. A major problem is that many of the more recent, fancier web sites rely on “java script” to provide animation and various other impressive features. These animations have proven very unreliable. Sites may “crash” on the user or prove unreliable, and many consumers have found themselves unable to complete their transactions.

There are a number of legal issues associated with the Internet:

* Reach across borders. Web sites transcend country lines and thus, a firm may be subjected to legal standards of different countries. It may be difficult to create advertising that simultaneously complies with rules for each country.
* Taxation. There is a great deal of ambiguity as to which state and local governments may collect taxes on merchandise sold on the Internet. There is also a question as to who has the responsibility for making the payment—the seller or the buyer?
* Privacy issues. Many foreign governments prohibit the collection of personal information of consumers (as Amazon.com does), which greatly reduces the customization opportunities online.

Web site design: The web designer must make various issues into consideration:

* Speed vs. aesthetics. As we saw, some of the fancier sites have serious problems functioning practically. Consumers may be impressed by a fancy site, or may lack confidence in a firm that offers a simple one. Yet, fancier sites with extensive graphics take time to download—particularly for users dialing in with a modem as opposed to being “hard” wired—and may result in site crashes.
* Keeping users on the site. A large number of “baskets” are abandoned online as consumers fail to complete the “check-out” process for the products they have selected. One problem here is that many consumers are drawn away from a site and then are unlikely to come back. A large number of links may be desirable to consumers, but they tend to draw people away. Taking banner advertisers on your site from other sites may be profitable, but it may result in customers lost.
* Information collection. An increasing number of consumers resist collection of information about them, and a number of consumers have set up their browsers to disallow “cookies,” files that contain information about their computers and shopping habits.

Cyber-consumer behavior. In principle, it is fairly easy to search and compare online, and it was feared that this might wipe out all margins online. More recent research suggests that consumers in fact do not tend to search very intently and that large price differences between sites persist. We saw above the problem of keeping consumers from prematurely departing from one’s site.

Improve Your Online Customer Service

2007-08-01T08:58:00.000-07:00

Even if you master each and every one of the internet marketing strategies out there--sales copywriting, search engine optimization, e-mail marketing and the rest--they're not worth a dime if you forget about customer service. It's a strategy that all truly successful business owners understand and pay careful attention to because the one thing all successful businesses have in common is satisfied customers.

There's an old saying in business: A happy customer will tell one or two people; an unhappy one will tell 10! So it pays to keep your customers happy--especially when doing business online.

Online, a seriously ticked-off customer might not just tell 10 people; they might also write a lengthy rant on their blog, post comments on other people's blogs, write a negative review of your site on a shopping website, or criticize you on forums and message boards. Or all of the above.
And worse, once something's been written about you online, it's very difficult to get it removed. This means that any prospective customer who decides to do a search on your business name could come across it.

So while good customer service might cost a bit of time and money, bad customer service online could cost you dozens of prospective customers. Think how much losing even just 10 sales would cost you, and compare it to the extra sales you'll gain from making your customers happy.

What’s really interesting is that many case studies show that building good customer service into the operation of a business increases a company’s efficiency as well as its sales. Here are some simple strategies to help you improve your customer service:

Step #1: Automate your sales process to keep customers in the loop.
Use autoresponders to thank your customers for their order, welcome them to your opt-in e-mail list, and send them order confirmations and other transactional emails like "your item has shipped" notices. Customers have come to expect these courtesies, but not everyone online bothers.

You can even add an element of surprise to these customer-service e-mails by including a coupon for money off their next purchase or some extra information they'll find relevant to the product they've just bought. You may also want to ask if everything is all right with your customers' purchase or if there's anything further you can do.

This kind of follow-up can relieve any possible feelings of buyer's remorse and reinforce the positive feelings about your business your customers had when they originally bought from you.

Step #2: Create a comprehensive FAQ page.
An FAQ page answers most of the questions people might have about your products or services. You should also create an FAQ e-mail address, such as info@mysite.com, and keep track of the questions that customers or site visitors actually ask, then answer them and put the answers on your FAQ page.

With those common questions taken care of, you'll be freed up to spend time giving personal attention to the visitors who need it. The more quickly you handle their concerns the more impressed they'll be. And you'll also stand out in the crowd--a recent Pelorus Group study found that a shocking 42 percent of retail sites take five days or longer to respond to customers.

It's often the times when you respond to a customer's concerns promptly and personally that generate a huge amount of goodwill for your business--and referrals. Even angry customers can be turned into devoted fans if you pay attention to them, acknowledge your mistake if you’ve made one and fix their problem.

Step #3: Make it easy for people to contact you.
There will always be times when a customer needs to talk to or e-mail someone directly, so don't hide your contact details away in a dark corner of your website, and always provide contact information on every message you send out.

You may also want to create a customer service page on your site that includes your FAQs, the names and e-mail addresses or phone numbers of people who can help, and other relevant information.

I’m often surprised at how many people with small e-businesses really don’t want to talk to customers and actually make it hard for people to get in touch. But the worst thing you can do is look like you’re hiding or just don’t care.

Step #4: Personalize and segment your e-mail messages.
I can't say this often enough: Use your customers' names in your e-mail subject lines and in your messages. Only 4 percent of marketers personalize and segment their messages, according to Jupiter Research, and yet personalized messages have almost twice the click-through rate of bulk e-mail.

As an e-business owner, you can personalize and segment your communications with customers in many ways, including:

* Personalizing emails with names and other pieces of information you collect
* Sending customers personalized birthday, anniversary or special occasion offers
* Sending customers details of new products you know they'll be interested in (in its recent "Consumer E-Mail" study, DoubleClick reported that 43 percent of the respondents would respond to "purchasing recommendations based on past purchase behavior")

The more details you can collect about your customers, the better you can serve them with laser-targeted offers, thank-you messages and information that’s relevant to their needs and wants.

This is where your e-mail management software makes your life easier. It can do the segmenting and personalizing for you, so you can spend your time thinking of more ways to target your marketing.

Step #5: Ask your customers how you can serve them better.
People love taking short surveys, and it's been shown that customer satisfaction is rated higher among people who've been asked what they want, even if their answers haven't been acted upon. Just asking what your customers want and how you can make your service better makes them feel listened to.

Actually acting on their suggestions and improving your service is gravy!

Remember, good customer service doesn't have to cost much. You don't have to spend a fortune giving away free products or large discounts. Even a small gesture like thanking customers for their business can help maintain a positive vibe around your business. And automating your everyday customer service tasks frees you up to respond to real concerns or complaints--making your overall customer service even faster and better.

How to Create a Marketing Plan

2007-08-01T08:37:00.002-07:00

Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.

The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future--two to four years down the road. But the bulk of your plan should focus on the coming year.

You should allow yourself a couple of months to write the plan, even if it's only a few pages long. Developing the plan is the "heavy lifting" of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing's greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it's different.
Who should see your plan? All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they're too skimpy and management would be embarrassed to have them see the light of day, or they're solid and packed with information . . . which would make them extremely valuable to the competition.

You can't do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on--in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what's achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you're essentially a one-person management operation, you'll have to wear all your hats at one time--but at least the meetings will be short!

What's the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about--what you do and don't do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes "the vision thing," the resounding words that spell out the glorious purpose of your company in stirring language. Your business plan is the U.S. Constitution of your business: If you want to do something that's outside the business plan, you need to either change your mind or change the plan. Your company's business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent
* Rallying point: Your marketing plan gives your troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order, knows how to run the ship, and has a port of destination in mind. Companies often undervalue the impact of a "marketing plan" on their own people, who want to feel part of a team engaged in an exciting and complicated joint endeavor. If you want your employees to feel committed to your company, it's important to share with them your vision of where the company is headed in the years to come. People don't always understand financial projections, but they can get excited about a well-written and well-thought-out marketing plan. You should consider releasing your marketing plan--perhaps in an abridged version--companywide. Do it with some fanfare and generate some excitement for the adventures to come. Your workers will appreciate being involved.

* Chart to success: We all know that plans are imperfect things. How can you possibly know what's going to happen 12 months or five years from now? Isn't putting together a marketing plan an exercise in futility . . . a waste of time better spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest sense. If you don't plan, you're doomed, and an inaccurate plan is far better than no plan at all. To stay with our sea captain analogy, it's better to be 5 or even 10 degrees off your destination port than to have no destination in mind at all. The point of sailing, after all, is to get somewhere, and without a marketing plan, you'll wander the seas aimlessly, sometimes finding dry land but more often than not floundering in a vast ocean. Sea captains without a chart are rarely remembered for discovering anything but the ocean floor.

* Company operational instructions: Your child's first bike and your new VCR came with a set of instructions, and your company is far more complicated to put together and run than either of them. Your marketing plan is a step-by-step guide for your company's success. It's more important than a vision statement. To put together a genuine marketing plan, you have to assess your company from top to bottom and make sure all the pieces are working together in the best way. What do you want to do with this enterprise you call the company in the coming year? Consider it a to-do list on a grand scale. It assigns specific tasks for the year.

* Captured thinking: You don't allow your financial people to keep their numbers in their heads. Financial reports are the lifeblood of the numbers side of any business, no matter what size. It should be no different with marketing. Your written document lays out your game plan. If people leave, if new people arrive, if memories falter, if events bring pressure to alter the givens, the information in the written marketing plan stays intact to remind you of what you'd agreed on.

* Top-level reflection: In the daily hurly-burly of competitive business, it's hard to turn your attention to the big picture, especially those parts that aren't directly related to the daily operations. You need to take time periodically to really think about your business--whether it's providing you and your employees with what you want, whether there aren't some innovative wrinkles you can add, whether you're getting all you can out of your products, your sales staff and your markets. Writing your marketing plan is the best time to do this high-level thinking. Some companies send their top marketing people away to a retreat. Others go to the home of a principal. Some do marketing plan development at a local motel, away from phones and fax machines, so they can devote themselves solely to thinking hard and drawing the most accurate sketches they can of the immediate future of the business.

Ideally, after writing marketing plans for a few years, you can sit back and review a series of them, year after year, and check the progress of your company. Of course, sometimes this is hard to make time for (there is that annoying real world to deal with), but it can provide an unparalleled objective view of what you've been doing with your business life over a number of years.

Google Analytics: Unleash Your Website

2007-08-01T08:37:00.001-07:00

Google Analytics: Unleash Your Website

Google Analytics is a free website analysis tool that provides detailed, business-oriented visitor traffic data through an intuitive and powerful web-based user interface. For many companies Google Analytics is their primary "go-to" resource. Why? The reasons are simple!
Google Analytics is easy to install.

Analytics can easily run on any website. Simply add a small snippet of javascript code on each page, sign up for a free account, and you can start collecting data immediately.
Google Analytics is business and behavior focused.

Many web stats tools focus far too much on the mechanics of web traffic without really explaining what is happening from a visitor behavior perspective. Google Analytics, in contrast, focuses on valuable questions, like what regions visitors came from, what keywords they used to arrive, and what pages they liked the most. The e-commerce analytics package is also very powerful and focused on key sales concepts. Even better, analytics integrates tightly with adwords, allowing detailed, clear pay per click behavior statistics.
Google Analytics can be configured to analyze complex web environments.

Do you have an eCommerce site that uses multiple domains to complete a transaction? Are your business activities broken up across multiple subdomains? Does your site use Flash? Do you have long, complex URLs as part of your website's navigation? Google Analytics can handle challenges like these and more.
Google Analytics is free.

Analytics scales well to meet the needs of small and large organizations, offering a practical alternative (and sometimes cumbersome) large-scale analytics tools. In addition, you can use the money freed up from using Google Analytics for other marketing investments, such as search engine optimization efforts and paid search.

Pure Visibility has been using Google Analytics from the first day the product was available. Our expertise can help you unleash analytic's potential, whether you're an experienced user or just learning about it today.

Pure Visibility

2007-08-01T08:15:00.000-07:00

Pure Visibility

We are a Michigan internet marketing company based in Ann Arbor, specializing in website optimization and pay per click management. We serve both national and local companies, helping businesses increase their visibility on the Web. Our "own page one" strategy gets your company listed at the top of the major search engines through internet marketing focused on search engine optimization (SEO) and paid strategies.
Search Engine Marketing Strategy: Own Page One

An experienced internet marketing company, Pure Visibility offers proven techniques performed by industry experts (including one of the industry's first 100 Google Certified Professionals) to make your site visible - AND we measure the results of that visibility. We track increases in traffic, calculate your return on investment (ROI), and analyze website activity, determining where visitors came from and which keyphrases were most effective. We continually improve your website based on these measurements to get it to the top of the search engines.

Unlike many other internet marketing companies, our optimization strategy is outlined in detail within this site, including our techniques for improving pay per click campaigns and search engine rankings. Read on to see how our pay-per-click (PPC) and search engine optimization (SEO) services can help your company "own page one."
Contact Pure Visibility For Internet Marketing

Contact Pure Visibility for more information about our services or to have your site/campaigns analyzed. Or if you're interested in the big picture, read more about how internet marketing relates to search engine optimization and pay-per-click.

If you're in the area, feel free to visit our Ann Arbor office. Walk-ins are welcome!

Search Engine Optimization(SEO) Services

2007-08-01T07:52:00.000-07:00

Search Engine Optimization(SEO) Services

Search Engine Marketing Lead (SEM Lead) is a search engine marketing company based in India which provides marketing expertise in organic search engine optimization, link popularity building, PPC campaign management with technical skills to its clients and also partners with SEO companies, marketing and full service firms to assist with their client base. Our deliverables includes website design with usability and accessibility for small to medium businesses. In addition, we formed alliances with web hosting and domain name registration company in order to benefit of clients.

Nowadays, so many websites are on the web but without their proper search engine marketing, business cannot be benefited. Our aim is to design effective, functional & professional looking site and increase traffic to your site through search engine marketing services.

You require a SEO company because search engine marketing is a complex job and the search engine algorithm change regularly. A full time effort is necessary to stay abreast of developments, and only a specialist from an SEO company will have the expertise.

Search Engine Marketing Lead also provides confidential services to design firms and independent developers. We design and assist in the development of websites. If you need someone to assist in SEO friendly web design and development, but don't have the resources to hire a full time dedicated search engine optimization consultant or interested in partnering with SEM Lead, contact us to find out how we can help each other.

Let us help you achieve your improved search engine ranking. Our comprehensive understanding of search engines, directories, and their associated requirements for submission ensure that your website will be highly placed on the results page. As a search engine optimization expert know how to strategically improve your search engine placement. Using innovative and widely accepted search engine optimization techniques, we produce a search engine marketing campaign that creates more top placements than any other search engine marketing company.

Marketing vs. Advertising: What's the Difference?

2007-08-01T07:51:00.000-07:00

You will often find that many people confuse marketing with advertising or vice versa. While both components are important they are very different. Knowing the difference and doing your market research can put your company on the path to substantial growth.

Let's start off by reviewing the formal definitions of each and then I'll go into the explanation of how marketing and advertising differ from one another:

Advertising: The paid, public, non-personal announcement of a persuasive message by an identified sponsor; the non-personal presentation or promotion by a firm of its products to its existing and potential customers.

Marketing: The systematic planning, implementation and control of a mix of business activities intended to bring together buyers and sellers for the mutually advantageous exchange or transfer of products.

After reading both of the definitions it is easy to understand how the difference can be confusing to the point that people think of them as one-in-the same, so lets break it down a bit.

Advertising is a single component of the marketing process.

It's the part that involves getting the word out concerning your business, product, or the services you are offering. It involves the process of developing strategies such as ad placement, frequency, etc. Advertising includes the placement of an ad in such mediums as newspapers, direct mail, billboards, television, radio, and of course the Internet. Advertising is the largest expense of most marketing plans, with public relations following in a close second and market research not falling far behind.

The best way to distinguish between advertising and marketing is to think of marketing as a pie, inside that pie you have slices of advertising, market research, media planning, public relations, product pricing, distribution, customer support, sales strategy, and community involvement. Advertising only equals one piece of the pie in the strategy. All of these elements must not only work independently but they also must work together towards the bigger goal. Marketing is a process that takes time and can involve hours of research for a marketing plan to be effective. Think of marketing as everything that an organization does to facilitate an exchange between company and consumer.

The Power of Generation Marketing

2007-08-01T07:43:00.000-07:00

The method of marketing to a specific generation is affecting the way that we promote and sell products and services. We are all a product of our generation. Each generation have their own characterestics, because of this as a marketing target we can usually categorize by generations by the way that we act and speak as well as our belief systems.
There are four popular generational categories that most marketers tend to focus on. They include:

Millenials or Generation 2001ers, born after 1980
Baby Busters or Generation Xers born between 1965 and 1980
Baby Boomers born between 1946 and 1964
Mature Citizens born between 1909 and 1945
In order to market effectively to a generation you must find a way to grab their attention, by using a message that resonates with them.

Generational determined lifestyles and social values exercise as much influence on buying and purchasing as more commonly understood demographic factors like income, education, and gender do--perhaps even more.
To succeed in generation marketing you must understand how the motivation of your consumers correlate with the underlying values of their generation. When you know this you are able to customize your message to cater to the generation when it comes to your products and services. You can then present the message with your products, services, and communication to their needs and desires.

Of course, every generation ultimately will pass through the same life stages, from youth to old age. As the younger generations find their place in society as consumers, employees and parents, it becomes more and more important for businesses to acknowledge this soon-to-be-powerful demographic. Build brand loyalty with them now, and you may reap the results for the rest of their lives.

If you have not already explored generation marketing, perhaps it's time to visit this method of marketing as part of your own marketing and advertising mix.