Friday, September 18, 2009

Business Models and Social Networking

We had a discussion on business models this week. We discussed popular models such as brokerage, merchant, manufacturing, advertising, affiliate, community, utility and subscription models. A business model is nothing more than a way to make money online and if a company is not profitable offline going online is probably not going to help. We identified that companies can be Click Only or Bricks and Clicks by having a store presence. The emphasis on multichannel marketing means that Bricks and Clicks is a more popular option than Click only. Most companies want to do business with their customers across multiple channels because multi-channel customers are more profitable. Our guest speaker Dana Van Den Heuvel from Marketing Savant gave us an update on social networking applications in industry. We have talked about how marketing is becoming a conversation and social media is defined as people having conversations online, although other technology such as pictures and videos are involved as well. There is a new standard of expectations that companies will be hanging out where their customers are. Some key social media platforms are blogging, photo sharing, podcasts, RSS (Really Simple Syndication) feeds and social media sites. Marketers should focus on what their business objectives are before engaging in a social media strategy. Many companies have a social media presence because these firms wish to have a passionate and loyal customer base. Most consumers are not creators of online content but rather consumers and most successful companies in social media target their efforts toward the majority. Some examples of successful companies in social media include P&G. By 'crowdsourcing' their new product development efforts, about half of their new product ideas are coming from customers now. Comcast provides customer support via Twitter and Dell not only engages customers but provides product promotions online. Coca Cola spreads conversations through its fans on facebook. It is important to have a good story to tell and have a sound company before engaging in a social media strategy. Micro metrics for social media include number of customer comments, referrals, issues addressed and implemented ideas. Some recent research indicates that companies that use social media well are growing at a faster rate than those who are not employing social media as part of their marketing strategies. Marketers can't ignore these media and students were encouraged to join linkedin and twitter and use these tools to participate in the conversation on marketing. By demonstrating their expertise and what they can contribute, students can become attractive to potential job seekers. Social media sites are also a great way to meet people that can help in the job search process.

Thursday, September 10, 2009

Who is on the net?

We looked at social media sites in our course lab and then this week have been exploring the question of who is on the internet? The internet consumer is in general older, more college-educated and increasingly female. Seventy-five percent of adults now use the internet, with 53 percent using some form of cloud communication. Although mobile applications are increasing in the United States, especially among African-Americans, over half the population, according to the Pew Report, can be classified as more tied to stationary than mobile media. In Europe, mobile applications are more widespread. Some of our class will be attending a presentation on mobile media at a CADM meeting in October so we will learn more about it then. We looked at various models of consumer behavior, such as AIDA, Attention, Interest, Desire and Action to explain how we as marketers want to involve consumers on our web site. Attention, Acquisition, Assessment and Action explains involvement from the marketer's point of view. Once the person is on board as a customer, we want to assess their needs so we can answer them most effectively through interactive communications and offers. We also talked about new ways of finding out what the consumer is thinking, as opposed to traditinal marketing research surveys. Blog posts, customer reviews, etc. all provide insight for the marketer but are harder to control. Anyone can be responding rather than a random sample of a known population. Companies like bizrate.com use panels of consumers to solicit input and control for this problem.

Wednesday, September 2, 2009

Internet Marketing

We are off to a good start in Internet Marketing. We distinguished between Internet Marketing, which is using the internet to facilitate the marketing process, and true interactivity, addressing the customer, remembering what they said, and addressing them in a way that is relevant to them. We discussed the relationship between direct and interactive marketing, particularly the use of databases and the ability to measure response. We also looked at the objectives of direct marketing versus interactive marketing and added to acquisition, conversion and retention the creation of value. The idea is to use information about the customer to create relevant offers and bind the customer to the brand. We gave the example of amazon.com and the way the website remembers prior purchases and makes offers that might be of relevance. The internet marketer can use the Internet "I's" to maximize use of this powerful medium (Interactivity, Immediacy, Involvement and Information-Intensiveness). If marketers keep these unique characteristics in mind, as well as the internet's roots in direct marketing, they will be able to leverage the medium to its best advantage.

We also talked about the history of the internet and the three trends that enable interactive marketing: Communication, technology and distribution. The internet originally was developed for government, particularly defense, applications. Since the creation of early commercial web browsers, such as MOSAIC, the opening up of the internet to commerical applications. Since then, the web as a marketing medium has exploded. Internet technology has been adapted faster than any other type of technology, taking just 7-8 years to be adopted by 30% of households.

I said that I have been teaching about the evolution from mass to direct to interactive communications for ten years, but this year I added another form of communication, collaborative communication. Web 2.0 means the many-to-many versus one-to-many communications that involve customers sharing information and opinion about brands and creating their own products and applications for products. We also discussed Moore's Law about computer power increasing and the cost decreasing, Metcalf's Law about the power of networks and the concept of the "Long Tail" in marketing, selling many products to the same person and not focusing on making money through mass marketing.

We will finish up this week talking about the value chain and positioning web sites.