Monthly Archives: February 2011

Voyurl lets you watch what your friends surf

Killer concept. Instead of trying to create yet another social portal, Voyurl allows you to watch what your friends are surfing online. It’s in the beta-concept stage now, teasing interested parties on Twitter with requests to DM them for invites to sign up … you know, the hipster early adopters will opt-in, bring their friends, and hopefully create Quora-like buzz.

But it’s a fantastic idea. Google, Yahoo!, Bing, Explorer, Firefox and Safari remain (while fading to mobile) the main entry points for online communication, so why not sneak a peek at what your friends see to find out what’s happening in the world? Voyurl is smart enough to realize the portal positions are taken and no social plugin, say, RockMelt, is going to become yet another doorway in — so instead it grabs the knob of other web browsers. Voyurl may find it difficult to scale with the requirement that all users opt-in, but I’m so watching my coworkers to see if porn pops up at lunch. Admit it, so will you.

Listening to the crowd

As humans become networked systems there are incredible opportunities to listen for feedback. Unfortunately, most marketers remain stuck in an ideation-execution-go to market-trigger-response mentality, ignoring the opportunity to learn. Consider the options:

– You’re running a paid search campaign, focused on costs per click, page views, conversions, costs per lead. Yet the keywords searched for give you real-time market intelligence on what your future customers are seeking. Have you parsed this data for ideas on new product development, service expansions, or marketing campaign messages?

– You plot ZIP Codes and demographics for outbound direct mailings, yet don’t map prior customers who are the best proxy for interested targets and send your direct mail in proximity to their neighbors. Shouldn’t you leverage the people who are your customers to find the people who live near them and likely share the same interests?

– You have friends on Facebook who are “fans” of your product, and customers on Twitter who tweet they like you. You listen to sentiment, respond to complaints … but have you leveraged services such as 33Across or Media6Degrees to target friends of these customers who have similar affinities?

We could go on. You have customer house files but haven’t run them through PRIZM to see variances in your customer demos vs. the surrounding population. You write ad copy without evaluating all the messages your competitors use in the marketplace, looking for the open position. You train salespeople without making them spend a day listening in on the call center to hear what real prospects, who don’t become customers, say before they drop out of the funnel. You hold focus groups sporadically every few years before a major campaign change, instead of running transcripts from your call center daily through software that generates a word cloud of key concepts seamlessly.

Listening is hard work. The good news is, if you put down ego and denial, the opportunities around you in your business system are almost endless.

Wired data stalking and the demise of 1to1 personalization

Wired magazine’s UK edition pulled off a nice stunt by collecting publicly available data on its subscribers and printing customized covers that greet individuals with freakishly accurate tidbits about themselves: Their birthday, whom they live with, even colorful comments about a recent online spat with a friend. Yikes.

Yes, a clever troller (or buyer of an Experian list) can learn a lot about you. The more interesting question isn’t whether privacy is gone (it is, check your direct mail), but why similar ultra-personalization has never taken off as a marketing tactic. Don Peppers and Martha Rogers founded a consulting group in the 1990s devoted to advocating personalization based on 1to1 relationships — corporations learning to connect with individuals via data that recognized their personal interests. It was a visionary concept, where every behemoth of an organization could treat you as intimately as the owner of a local store. What happened? A few companies, such as Netflix, managed to make quasi-personalization work, but almost no marketer has nailed the 1to1 concept. Personal relationships between consumer and corporation gave way to networks of consumers talking among themselves; social media arose, and personalization was passed by as companies yearned for “viral” strategies to reach the masses, not individuals, ignoring them. If markets are efficient, and data collection has become easy, why aren’t you greeted at the mall with a digital sign saying, “Hello, Mr. Jones, welcome back, the shoes you like are on sale at the Smithswalk Outlet on Level 2”? Because 1to1 doesn’t sell as much volume as 1tomany (TV) or manytomany (viral success).

Beyond the corporate incentives, 1to1 recognition may never have been what people needed. Perhaps we don’t want unexpected personalization at all, because the serendipity of random product encounters creates desire tied to a whim. Like cotton candy or a high school crush, the sugary rush of blood that comes from longing something unexpected is oh so satisfying, mainly because the desire surprises us with novelty.

Or perhaps more simply, the aura of an unknown someone really knowing us, like a Wired UK magazine cover, just freaks us out.

What to learn from Groupon’s whopping 50% rev share

What does it say about the state of online advertising that businesses remain crazy to use Groupon at extremely high costs?

Groupon, as you know, is a deal-of-the-day network that has achieved phenomenal success since its launch in November 2008. It has scaled rapidly to 35 million registered users (partly through acquisitions of various couponing sites) and according to The Wall Street Journal may get to $1 billion in sales faster than any other company in history.

The secret, often reported but not-oft remarked upon, is Groupon’s model. The site takes a whopping 50% of all revenue resulting from the business promotion — not X dollars per impression, or even Y% of margin, but half of all the money you make. And businesses don’t seem to question it — according to Groupon itself, companies are lining up to get in its window, and Groupon turns down more applications than it accepts. Yowza. No wonder Groupon is rolling in the dough.

Given the law of supply and demand, these high prices must mean three things:

1. Going viral is almost impossible unless you game the system. If you use Groupon, you’re getting gouged as the price for going viral — meaning that lofty success, dreamed of by every marketer who’s uploaded a clever clip to YouTube, is in very short supply. Yes, we all remember Subservient Chicken or last year’s Old Spice dude, which got millions of web hits. But most campaigns never strike a chord in the masses to be passed along; it’s almost completely random that a guy does The Evolution of Dance for fame, and once a concept trends, it rarely can be repeated. Groupon takes advantage of this failing in today’s communications networks by allowing companies to pay to reach thousands of people. It has brilliantly gamed the impossibility of viral marketing by creating a mass audience that can be reached, for a sharp rev share. Groupon is the viral equivalent of Google’s “sponsored link” ads — you can be at the top, but only if you pay.

2. Virality, if achieved, is fleeting. The very nature of “deal of the day” is that the deal changes. Groupon knows consumers rush for the new-new thing, and then want something else, which works brilliantly for its coffers but not so good for its business clients. You might try Groupon once for a pop, say, launching a new coffeeshop in downtown San Francisco, but you’d never use Groupon as a sustainable marketing initiative. How could you, giving away 50% of your revenue in addition to the coupon value on top of it, just to get foot traffic?

3. Mass audiences win, even in the age of social media. Groupon’s core value is its near-guarantee of delivering your promotion to a mass audience (we mentioned 35 million registered users). Sure, it’s an assurance contract, where you only give it away if enough people sign up, but that creates momentum for the participants who want you to get more mass behind them. Gurus can talk about small communities and engaged individuals all they want, but Groupon shows what businesses really love is a large throng rushing their doors.

We mean Groupon no harm: 50% revenue for being smart and filling a market need? Bully for you. There is some value here because advertising online has become more challenging, with consumers awash in display ads (about 90% of all banner ad space goes unsold) and moving to smaller screen formats (iPhones, tablets) that reduce visual inventory for marketing intrusions. Groupon is riding this wave of despair with a surefire model to reach the masses. It works, but only for a quick pop, and only if you’re willing to give most of your money away. The question for Groupon is whether its king-of-online-coupon model is sustainable, even with a crack localized sales force. Google is fast upon its heels, and we can imagine the Amazons (see: LivingSocial) and eBays of the world easily finding a way to replicate the lure of discounts to the masses. In the end, competing on price is a feature and not a competitive advantage; and those pesky audiences that drive all the attention have a way of moving on.