The end of Gourmet Magazine's nearly seventy year reign as arbiter of the best in cooking in America came as a blow even to non-subscribers. If devoted foodies couldn't keep Gourmet afloat, what hope was there for magazines with a less loyal audience?
In late November rival magazine publishers embarked on a joint effort to chart a path toward the digital future. Time, Inc, Conde Nast and Hearst were poised to join together under the leadership of John Squires, who up until June was an executive VP at TIME running the business side of the news. Squires is forming a new company that will prepare magazines (The New Yorker, Vanity Fair, Vogue, Time, People, Sports Illustrated, Esquire and O, The Oprah Magazines) for multiple digital platforms (iPhone, BlackBerry, Kindle, Sony, etc). The plans are not set in stone and no one has signed on the dotted line, but the deal might be announced in a matter of weeks.
The new company, according to reports in The New York Observer article by John Koblin (http://www.observer.com/2009/media/time-incs-squires-assembles-team-rivals-harness-digital-media), won't focus on devices but on an iTunes-like site where readers can buy "new and distinct iterations" of the magazines. It comes too late for Gourmet which had a pretty good web presence on epicurious.com.
It will be interesting to see if this new venture can take flight. The New York Observer article seemed to focus on the problem of getting consumers to pay for online content. "Each magazine publisher now believes it's too risky to go it alone to find new ways to get consumers to pay. If they all joined together, the reasoning goes, they stand a better chance of producing greater revenue."
The issue isn't new. Earlier this year Rupert Murdoch announced plans to charge for web access to News Corp's publications. He also campaigned for an online news consortium of daily newspapers much like that which TIME's Squire proposes for magazines.
Finding a way to "monetize" the web is essential for transformation of old media into the new digital future. But as important is the conundrum of creating a new relationship with audiences in an environment where digital tools give audiences a way of participating in a conversation with magazines and newspapers. Oddly, non-media corporations seem to be better equipped to give audiences a voice in the creation of their products. The one-way distribution of content is a hard habit for old-media to kick, but they will have to find a new equilibrium to be successful in the digital media future.
Tuesday, December 1, 2009
Wednesday, August 19, 2009
Murdoch's plan to charge for website access
Rupert Murdoch's announcement earlier this month that he plans to charge for access to his news websites raised some eyebrows. Many commentators remarked that it was like trying to "put the genie back in the bottle." How can you train consumers to pay for something that they had been getting for free only yesterday? And didn't the NYT's paid access to parts of its site via "TimesSelect" subscriptions fizzle out just two years ago?
This got me thinking back to that earlier transformation where "free" became "paid": the cable television industry. Could the boom in paid television hold lessons for the movement from free news websites to paid access? I came across two interesting Harvard Business School cases that gave overviews of the U.S. television industry and cable television regulation:
Primer on the U.S. Television Industry by Jan Wei-Skillern and Sonia Marciano, (Oct 27, 2008)
http://harvardbusiness.org/product/primer-on-the-u-s-television-industry/an/308128-PDF-ENG
Note on Cable Television Regulation by Willis Emmons and David Grossman (March 30, 1993)
http://harvardbusiness.org/product/note-on-cable-television-regulation/an/391022-PDF-ENG
The two articles give a pretty good overview of how cable television developed and how it morphed from a tool to extend broadcast television into geographical areas unable to receive broadcast signals to a full-fledged content delivery system that rivals, and in some ways exceeds, broadcast.
In 1950, Robert J. Tarlton, a television and radio salesman, built the first commercial cable television system in Lansford Pennsylvania. Though the city was just 65 miles from Philadelphia, the broadcast signals couldn't get over the Allegheny Mountains that separated them. With access to Philly's TV stations, Tarlton figured his customers would buy more of his television sets. Cable television grew slowly during that first decade but picked up steam during the 1960s and 1970s as the technology upon which cable television relied became less expensive and more communities outside major metropolitan areas established franchises for cable television. During this period annual subscriber growth rates hit 20%. But it wasn't just better reception that boosted subscribership, it was the creation of original programing available only on cable.
The watershed year for cable television was 1972 when Time, Inc. launched Home Box Office (HBO). By 1974 HBO had 57,000 subscribers but was not profitable because of the complexity of distribution via its cable systems. To solve the limits of spotty distribution, HBO was delivered over satellite but the cost of satellite dishes were $80,000 in 1975 which limited the number of cable systems able to buy them. But by 1977 the prices for dishes fell to $25,000 and many more cable systems could afford to buy access to HBO through flat monthly fees. At the same time, Ted Turner put WTBS on a satellite and became the first "superstation" but he charged each cable system based upon its total number of subscribers rather than a flat fee making it more affordable for cable systems.
Throughout these decades broadcasters waged a pitched battle in the courts and through the power of the FCC to defend their interests and limit the ability of cable operators to filch audience without having to pay for use of airwaves. The courts were unwilling or unable to do much for broadcasters and the FCC was only marginally better. But it wasn't until the ascent of Ronald Reagan's era of deregulation that cable subscriptions grew rapidly despite the fact that cable rates rose faster than inflation (in most cases, much faster than inflation).
While the comparison between broadcast/cable television and print/digital news delivery isn't perfect (government regulation being a major factor in the former), there are some lessons to be learned. First and foremost is that it seems you can get consumer to pay for something that was previously available for free. Of course, the content you are asking a fee for cannot be exactly the same. Consumers are willing to pay for content that they cannot get otherwise. People were willing to pay for HBO because they couldn't watch The Sopranos on broadcast television. And today people are willing to pay for basic cable because without it, they can't watch Mad Men. Content is king.
News websites need to offer content that are not available on free sites or on broadcast television. A former colleague of mine used to suggest that newspapers should hold back long-form content for their print versions and use the web as a marketing tool to tease readers into buying print. I think consumer practices have changed too dramatically for that model. People want the information they seek easily and immediately. And they are often willing to pay for it if they can't get it for free elsewhere.
Paid access isn't for every newspaper or new site. Some (The Daily News?) simply don't offer the added value that consumers are willing to pay for and it may be too late for them to transform themselves into a premium content delivery system. But The Wall Street Journal offers unique content and subscribers are willing to pay for it.
The next question is pricing. I wrote about Charles Blow's NYT column on streaming music earlier this month which raised the question of whether or not the iTunes model of individual music track purchases is becoming outmoded. Is a subscription model the right one for newspapers (and maybe even books?) or will consumers prefer to purchase articles from news websites individually? These are some of the questions Murdoch needs to figure out before he launches something like the dismal TimesSelect program.
This got me thinking back to that earlier transformation where "free" became "paid": the cable television industry. Could the boom in paid television hold lessons for the movement from free news websites to paid access? I came across two interesting Harvard Business School cases that gave overviews of the U.S. television industry and cable television regulation:
Primer on the U.S. Television Industry by Jan Wei-Skillern and Sonia Marciano, (Oct 27, 2008)
http://harvardbusiness.org/product/primer-on-the-u-s-television-industry/an/308128-PDF-ENG
Note on Cable Television Regulation by Willis Emmons and David Grossman (March 30, 1993)
http://harvardbusiness.org/product/note-on-cable-television-regulation/an/391022-PDF-ENG
The two articles give a pretty good overview of how cable television developed and how it morphed from a tool to extend broadcast television into geographical areas unable to receive broadcast signals to a full-fledged content delivery system that rivals, and in some ways exceeds, broadcast.
In 1950, Robert J. Tarlton, a television and radio salesman, built the first commercial cable television system in Lansford Pennsylvania. Though the city was just 65 miles from Philadelphia, the broadcast signals couldn't get over the Allegheny Mountains that separated them. With access to Philly's TV stations, Tarlton figured his customers would buy more of his television sets. Cable television grew slowly during that first decade but picked up steam during the 1960s and 1970s as the technology upon which cable television relied became less expensive and more communities outside major metropolitan areas established franchises for cable television. During this period annual subscriber growth rates hit 20%. But it wasn't just better reception that boosted subscribership, it was the creation of original programing available only on cable.
The watershed year for cable television was 1972 when Time, Inc. launched Home Box Office (HBO). By 1974 HBO had 57,000 subscribers but was not profitable because of the complexity of distribution via its cable systems. To solve the limits of spotty distribution, HBO was delivered over satellite but the cost of satellite dishes were $80,000 in 1975 which limited the number of cable systems able to buy them. But by 1977 the prices for dishes fell to $25,000 and many more cable systems could afford to buy access to HBO through flat monthly fees. At the same time, Ted Turner put WTBS on a satellite and became the first "superstation" but he charged each cable system based upon its total number of subscribers rather than a flat fee making it more affordable for cable systems.
Throughout these decades broadcasters waged a pitched battle in the courts and through the power of the FCC to defend their interests and limit the ability of cable operators to filch audience without having to pay for use of airwaves. The courts were unwilling or unable to do much for broadcasters and the FCC was only marginally better. But it wasn't until the ascent of Ronald Reagan's era of deregulation that cable subscriptions grew rapidly despite the fact that cable rates rose faster than inflation (in most cases, much faster than inflation).
While the comparison between broadcast/cable television and print/digital news delivery isn't perfect (government regulation being a major factor in the former), there are some lessons to be learned. First and foremost is that it seems you can get consumer to pay for something that was previously available for free. Of course, the content you are asking a fee for cannot be exactly the same. Consumers are willing to pay for content that they cannot get otherwise. People were willing to pay for HBO because they couldn't watch The Sopranos on broadcast television. And today people are willing to pay for basic cable because without it, they can't watch Mad Men. Content is king.
News websites need to offer content that are not available on free sites or on broadcast television. A former colleague of mine used to suggest that newspapers should hold back long-form content for their print versions and use the web as a marketing tool to tease readers into buying print. I think consumer practices have changed too dramatically for that model. People want the information they seek easily and immediately. And they are often willing to pay for it if they can't get it for free elsewhere.
Paid access isn't for every newspaper or new site. Some (The Daily News?) simply don't offer the added value that consumers are willing to pay for and it may be too late for them to transform themselves into a premium content delivery system. But The Wall Street Journal offers unique content and subscribers are willing to pay for it.
The next question is pricing. I wrote about Charles Blow's NYT column on streaming music earlier this month which raised the question of whether or not the iTunes model of individual music track purchases is becoming outmoded. Is a subscription model the right one for newspapers (and maybe even books?) or will consumers prefer to purchase articles from news websites individually? These are some of the questions Murdoch needs to figure out before he launches something like the dismal TimesSelect program.
Thursday, August 6, 2009
Obama and digital media
New York Magazine has a great article in its current issue by Jennifer Senior about Obama's media strategy that sheds some interesting light on how fast-paced digital media can be managed effectively. I guess it should come as no surprise that the guy whose team rewrote the book on grassroots campaigning using new media should also throw out the old rules on how a president must comport himself via mass media.
First, Senior notes the ubiquity of President Obama: fifteen town-hall meetings; 800 Flickr photo-stream; four prime-time press conferences (the same number G. W. Bush held throughout his entire eight years); a video message to the people of Iran; a speech in Cairo beamed live througout the Middle East and the world; an appearance on Jay Leno's Tonight Show. Senior gets a great quote from Ed Gillespie, former adviser to G.W. Bush: "This is president as content provider. It's like when Rosie O'Donnell had a show and a magazine and a blog."
During the campaign Obama was a genuine cultural phenomenon. Even more so than the Clintons were in the early 1990s when they ushered in the first Boomer administration and the Bill and Hillary partnership riveted (and divided) the nation (as it still does today). Sometimes I personally found the People Magazine embrace of Candidate Obama a little unsettling: were the young people who entranced by him ready for the long-haul of supporting him through governing? But the strategy of the campaign was brilliant. Reagan was able to change the course of the nation through the use of his personality. Senior quotes Rahm Emanuel: "There's a brand to it." And the brand seems to be helping President Obama keep momentum and support for his policies that are on their own very controversial: the auto industy bailout and health care reform.
But back to my main point about what Senior reveals. This constant stream of content via the President flies in the face of the first rule of Presidential communications: don't devalue the cachet of the President by overexposure. But this golden rule was formed in an age of three networks and one or two "national" newspapers. The news cycle back then was stately. Senior quotes Bill Burton a White House deputy press secretary: "Even when I was on the Kerry campaign in 2004, something that showed up on the front page of the New York Times would drive a lot of the news that day and a least oa couple of broadcasts that night. And it's rare that anything does that now."
And this is the heart of Senior's analysis: "[T]hose who think the White House has overdone it are missing the point. In today's media environment, ubiquity is not the same as overexposure. It's a deliberate strategy. And it's critical to any understanding of the Obama presidency."
It seems that the fracturing of the media and the diverse ways in which the public gets its information keep the public from overdosing on President Obama. In addition, Senior points to Obama's preference for deep analysis and "moral instruction" in his extensive, carefully crafted, and disciplined delivery of his remarks. She calls him "professor-in-chief, preacher-in-chief, father-in-chief." As an example she offers his 37 minute speech about race following the Reverend Wright imbroglio. Despite its length and careful reasoning (or perhaps because of it) within 48 hours more than 1.6 million viewer watched it and the video became the most watched piece on YouTube for that period.
Senior quotes Clay Shirkey, the NYU author of "Here Comes Everybody." "Sound bites were a product of media scarcity, when public figures had a finite amount of time and space to make their points. Now we live in a world of 'Publish then filter," he points out, rather than "filter, then publish," a time when the question is 'Why not film this?' rather than 'Why film this?"
Nate Silver, the founder of the influential fivethirtyeight.com, goes further and describes this as an active rather than passive strategy. Senior quotes him: "If you speak and leave out details, bloggers will fill them in." But the key here, according to Senior, is the discipline with which Obama delivers the message. In speaking at the National Archives about the treatment of detainees: "By the time he'd finished speaking, he'd used the word 'moral' twice, 'principle' ten times, and 'value' fifteen."
The entire article contains much, much more and is well worth reading: http://nymag.com/news/politics/58199/
First, Senior notes the ubiquity of President Obama: fifteen town-hall meetings; 800 Flickr photo-stream; four prime-time press conferences (the same number G. W. Bush held throughout his entire eight years); a video message to the people of Iran; a speech in Cairo beamed live througout the Middle East and the world; an appearance on Jay Leno's Tonight Show. Senior gets a great quote from Ed Gillespie, former adviser to G.W. Bush: "This is president as content provider. It's like when Rosie O'Donnell had a show and a magazine and a blog."
During the campaign Obama was a genuine cultural phenomenon. Even more so than the Clintons were in the early 1990s when they ushered in the first Boomer administration and the Bill and Hillary partnership riveted (and divided) the nation (as it still does today). Sometimes I personally found the People Magazine embrace of Candidate Obama a little unsettling: were the young people who entranced by him ready for the long-haul of supporting him through governing? But the strategy of the campaign was brilliant. Reagan was able to change the course of the nation through the use of his personality. Senior quotes Rahm Emanuel: "There's a brand to it." And the brand seems to be helping President Obama keep momentum and support for his policies that are on their own very controversial: the auto industy bailout and health care reform.
But back to my main point about what Senior reveals. This constant stream of content via the President flies in the face of the first rule of Presidential communications: don't devalue the cachet of the President by overexposure. But this golden rule was formed in an age of three networks and one or two "national" newspapers. The news cycle back then was stately. Senior quotes Bill Burton a White House deputy press secretary: "Even when I was on the Kerry campaign in 2004, something that showed up on the front page of the New York Times would drive a lot of the news that day and a least oa couple of broadcasts that night. And it's rare that anything does that now."
And this is the heart of Senior's analysis: "[T]hose who think the White House has overdone it are missing the point. In today's media environment, ubiquity is not the same as overexposure. It's a deliberate strategy. And it's critical to any understanding of the Obama presidency."
It seems that the fracturing of the media and the diverse ways in which the public gets its information keep the public from overdosing on President Obama. In addition, Senior points to Obama's preference for deep analysis and "moral instruction" in his extensive, carefully crafted, and disciplined delivery of his remarks. She calls him "professor-in-chief, preacher-in-chief, father-in-chief." As an example she offers his 37 minute speech about race following the Reverend Wright imbroglio. Despite its length and careful reasoning (or perhaps because of it) within 48 hours more than 1.6 million viewer watched it and the video became the most watched piece on YouTube for that period.
Senior quotes Clay Shirkey, the NYU author of "Here Comes Everybody." "Sound bites were a product of media scarcity, when public figures had a finite amount of time and space to make their points. Now we live in a world of 'Publish then filter," he points out, rather than "filter, then publish," a time when the question is 'Why not film this?' rather than 'Why film this?"
Nate Silver, the founder of the influential fivethirtyeight.com, goes further and describes this as an active rather than passive strategy. Senior quotes him: "If you speak and leave out details, bloggers will fill them in." But the key here, according to Senior, is the discipline with which Obama delivers the message. In speaking at the National Archives about the treatment of detainees: "By the time he'd finished speaking, he'd used the word 'moral' twice, 'principle' ten times, and 'value' fifteen."
The entire article contains much, much more and is well worth reading: http://nymag.com/news/politics/58199/
Monday, August 3, 2009
subscription digital music and book publishing
Charles Blow, my favorite New York Times columnist, had a great piece this past Saturday (8/1/2009) about music buying habits. He briefly recounts the file-sharing/piracy crisis in the early 2000s before sharing some new research about the next challenge: music streaming.
The Recording Industry Association of America reports, according to Charles, that since 1999 the value of music sales has been cut in half. File sharing sites like Napster were a large part of the problem back then but the trend is slowing. A survey of British fans by Leading Question/Music Ally found that file sharing among 14- to 18-year-olds dropped by one-third from 12/2007 to 1/2009. At the same time, two-thirds of that group now regularly listen to streaming music and one-third listens daily.
Those of us in other cultural content delivery systems (for me it is books) have to pay attention to these trends. These are the book-buying consumers of tomorrow (one hopes). But once you become habituated to receiving content electronically (and at no cost) it becomes a yardstick that applies not just to one type of entertainment but to other cultural transactions, as well.
So what kind of payment model will work best with this new consumption pattern? The Apple Store model of paying for each downloaded cut will soon be outmoded. Apple has always been at the forefront of change, but Charles' mention of their new effort with four music labels to promote digital album sales seems a bit backward looking to me. It seems as though they are trying to serve themselves rather than serve the consumer and that is a big mistake.
Young consumers want their content and want it delivered in flexible ways. There will be those who want digital albums just like there are those who want vinyl albums. But if the consumer wants digital streaming music they will find a way to get it, with or without the labels and Apple.
One of the new payment methods discussed in book publishing is a subscription payment plan. But it is hard to imagine anyone buying a subscription plan for Random House books or even one of its subsidiary imprints. But more branded types of imprints (romance books, cookbooks, and others) maybe the place to start a subscription payment plan. But my hunch is that a new model like subscription plans will likely be a bottom-up evolution. Online communities formed around specific tastes are the perfect aggregators to offer subscription book and music services.
Perhaps some are already trying these new models. I'd love to hear stories of those who are trying something like this.
The Recording Industry Association of America reports, according to Charles, that since 1999 the value of music sales has been cut in half. File sharing sites like Napster were a large part of the problem back then but the trend is slowing. A survey of British fans by Leading Question/Music Ally found that file sharing among 14- to 18-year-olds dropped by one-third from 12/2007 to 1/2009. At the same time, two-thirds of that group now regularly listen to streaming music and one-third listens daily.
Those of us in other cultural content delivery systems (for me it is books) have to pay attention to these trends. These are the book-buying consumers of tomorrow (one hopes). But once you become habituated to receiving content electronically (and at no cost) it becomes a yardstick that applies not just to one type of entertainment but to other cultural transactions, as well.
So what kind of payment model will work best with this new consumption pattern? The Apple Store model of paying for each downloaded cut will soon be outmoded. Apple has always been at the forefront of change, but Charles' mention of their new effort with four music labels to promote digital album sales seems a bit backward looking to me. It seems as though they are trying to serve themselves rather than serve the consumer and that is a big mistake.
Young consumers want their content and want it delivered in flexible ways. There will be those who want digital albums just like there are those who want vinyl albums. But if the consumer wants digital streaming music they will find a way to get it, with or without the labels and Apple.
One of the new payment methods discussed in book publishing is a subscription payment plan. But it is hard to imagine anyone buying a subscription plan for Random House books or even one of its subsidiary imprints. But more branded types of imprints (romance books, cookbooks, and others) maybe the place to start a subscription payment plan. But my hunch is that a new model like subscription plans will likely be a bottom-up evolution. Online communities formed around specific tastes are the perfect aggregators to offer subscription book and music services.
Perhaps some are already trying these new models. I'd love to hear stories of those who are trying something like this.
Tuesday, July 28, 2009
polyvore interactive website
I just read Claire Cain Miller's article in the New York Times about Polyvore (www.polyvore.com) an apparel website that makes shopping more interactive. The site is based on Yahoo Pipes a tool developed by Pasha Sadri a software engineer at Yahoo. Yahoo Pipes allows people to aggregate content from various sites on the web.
Sadri used this tool to push digital apparel marketing into a more interactive direction. Using Yahoo Pipes Polyvore visitors download images of clothing from anywhere on the web. All Polyvore users can use these clothing items to create "sets" that look something like a scrapbook page or a mood board. Site visitors are able to create complete outfits and become a sort of web fashion editor. Polyvore tracks the images and allows viewers of someone else's "set" to use a hyperlink to the original site where they can purchase the pieces of clothing. Polyvore gets a commission when users double click or buy the clothing from certain sites. Polyvore is also exploring other relationships like sponsored content with apparel manufacturers and retailers.
The results of this small tweak to the usual static web catalog experience has been huge with more than 835K unique visitors in June which is almost 25% more than for other major sites like Style.com and InStyle.com. Polyvor has 928K registered users who make 28K new "sets" each and every day.
Polyvore is also licensing its technology to other online retailers which is probably the real way for Polyvore to make money. Pasha seems to think that clothing is uniquely suited to a Polyvore tool. But I am not so sure. Certainly, visual products are best suited to Polyvore but clothing is not the only visual product. Why not home furnishings or kitchen appliances (seems like a natural for HGTV).
Sadri used this tool to push digital apparel marketing into a more interactive direction. Using Yahoo Pipes Polyvore visitors download images of clothing from anywhere on the web. All Polyvore users can use these clothing items to create "sets" that look something like a scrapbook page or a mood board. Site visitors are able to create complete outfits and become a sort of web fashion editor. Polyvore tracks the images and allows viewers of someone else's "set" to use a hyperlink to the original site where they can purchase the pieces of clothing. Polyvore gets a commission when users double click or buy the clothing from certain sites. Polyvore is also exploring other relationships like sponsored content with apparel manufacturers and retailers.
The results of this small tweak to the usual static web catalog experience has been huge with more than 835K unique visitors in June which is almost 25% more than for other major sites like Style.com and InStyle.com. Polyvor has 928K registered users who make 28K new "sets" each and every day.
Polyvore is also licensing its technology to other online retailers which is probably the real way for Polyvore to make money. Pasha seems to think that clothing is uniquely suited to a Polyvore tool. But I am not so sure. Certainly, visual products are best suited to Polyvore but clothing is not the only visual product. Why not home furnishings or kitchen appliances (seems like a natural for HGTV).
Friday, July 24, 2009
Online Gaming as a Brand and Engagement Tool
A couple weeks ago I attended the MITX panel: Is it all Fun and Games?: Online Gaming as a Brand and Engagement Tool. The panel gave me a great sense of how effective online games can be in developing and reinforcing a brand. As a digital marketing novice with more than a bit of skepticism, it was great to hear these experienced professionals share their insights.
Panelists included:
Steve Curran with Pod Digital Design (which he described as a branded entertainment and production company) was really impressive. His team put together an online game that was meant to raise awareness for the History Channel program "Expedition Africa". Other panelists raved about the game and about how addictive it was to play. Curran noted that it was important not to replicate the outcomes of the reality TV show but to use the game as an extension of the content that would launch the program. He underliend that planning is key. Obviously, the goal is to sell the product and encourage engagement with the product (in this case increase viewers of the TV show). To reach this goal, you must research and finely target the demographic you wish to reach and how/where they will find this game. Curran got a lucky break when Apple chose their game as an Iphone app of the day/week (not sure which) which resulted in 350K downloads. I don't believe Curran detailed any other information on metrics.
Glenn Leeder from Microsoft Gaming had a muchmore focused perspective since he focuses on XBox and digital marketing. They have undertaken campaigns with Sprite and the NBA. He pointed out that XBox was a good platform for repurposing advertisements. XBox can also be "re-skinned" which gives brands many options for prominent exposure. XBox is especially good for 18-44 yo male consumers who are among the most difficult segments to reach. He underscored that gaming should be considered a part of mainstream expenditure and Microsoft's "4-screen" approach. He pointed out that gaming can be affordable. A game will cost $50K minimum but that compares to $100K for television ads. Games also have a longer shelf life than TV ads and a game (on XBox?) can get between 5 and 10 million visitors. You also have an ability to position your product next to another brand (presumably Microsoft/XBox). He described a campaign for Burger King in which consumers had to buy the the game (for around $3) but the campaign helped drive a 41% increase in sales for that particular quarter. The game was also able to be extended globally to a 10M consumer audience. Leeder also emphasized that a digital game is the beginning of a long-term dialogue with the consumer. Name capture is essential. You can't simply send out content without a way of using the information available (RFI requests). XBox also has some impressive engagement data for their emails to captured consumer names: 52% open rate; 38% click through rate. But he stressed that they only send XBox related emails and do not sell their data or submit emails on behalf of outside brands. He also stressed that games and associated sites must continually refresh since the consumer will become bored with the game or with the branding message.
Marc Girolimetti, co-founder of ActsLike, described some really interesting campaigns including a game engineered to draw FEDEX users to their website to help launch the online booking tools FEDEX had just launched but consumers were slow to embrace. The campaign drew 18K new online users. They also had great success with an online game for the Warner Brothers film "A Scanner Darkly" and a 2nd Life Playboy retail merchandise presence.
Panelists included:
Moderator: Victor Lee - Vice President Group Director, Marketing and Branded Entertainment, Digitas
Panelists: Steve Curran, Founder/Creative Director, Pod Digital Design; Marc Girolimetti, Co-Founder, ActsLike, Inc.; Glenn Leeder, Business Development Manager, Microsoft Gaming
Panel Description: Online gaming, and the social interaction associated with the games, is a powerful way to engage with your customers. The number of people playing social games is expected to grow to 250 million in 2009, new platform developments have created new opportunities for engagement, and users have become accustomed to high quality, connected experiences at a low cost.
With all these changes, how do you create successful online games? Is it possible to make money - and how? How do you create a brand experience that stands out in the crowd? Join MITX and a panel of seasoned gaming experts as we discuss the evolution of gaming and how marketers can successfully use games an engagement and branding tool. Discussion points will include:
- What does it take to have a successful online game? What are the rules of engagement? Where are the main frustrations and how can they be overcome?
- How do you "brand" the game in a way that successfully communicates your messages but doesn't interupt the user experience?
- What are the pros and cons between a website with gaming elements, a branded microsite, an online gaming community and a social network with gaming elements?
- What do you need to know about the platforms? Which ones work better? Which ones have niche offerings to improve engagement?
- Despite the low cost/low margin structure of social games, how can you make money with interactive games? What advertising options should you consider above-and-beyond traditional banner ads?
Steve Curran with Pod Digital Design (which he described as a branded entertainment and production company) was really impressive. His team put together an online game that was meant to raise awareness for the History Channel program "Expedition Africa". Other panelists raved about the game and about how addictive it was to play. Curran noted that it was important not to replicate the outcomes of the reality TV show but to use the game as an extension of the content that would launch the program. He underliend that planning is key. Obviously, the goal is to sell the product and encourage engagement with the product (in this case increase viewers of the TV show). To reach this goal, you must research and finely target the demographic you wish to reach and how/where they will find this game. Curran got a lucky break when Apple chose their game as an Iphone app of the day/week (not sure which) which resulted in 350K downloads. I don't believe Curran detailed any other information on metrics.
Glenn Leeder from Microsoft Gaming had a muchmore focused perspective since he focuses on XBox and digital marketing. They have undertaken campaigns with Sprite and the NBA. He pointed out that XBox was a good platform for repurposing advertisements. XBox can also be "re-skinned" which gives brands many options for prominent exposure. XBox is especially good for 18-44 yo male consumers who are among the most difficult segments to reach. He underscored that gaming should be considered a part of mainstream expenditure and Microsoft's "4-screen" approach. He pointed out that gaming can be affordable. A game will cost $50K minimum but that compares to $100K for television ads. Games also have a longer shelf life than TV ads and a game (on XBox?) can get between 5 and 10 million visitors. You also have an ability to position your product next to another brand (presumably Microsoft/XBox). He described a campaign for Burger King in which consumers had to buy the the game (for around $3) but the campaign helped drive a 41% increase in sales for that particular quarter. The game was also able to be extended globally to a 10M consumer audience. Leeder also emphasized that a digital game is the beginning of a long-term dialogue with the consumer. Name capture is essential. You can't simply send out content without a way of using the information available (RFI requests). XBox also has some impressive engagement data for their emails to captured consumer names: 52% open rate; 38% click through rate. But he stressed that they only send XBox related emails and do not sell their data or submit emails on behalf of outside brands. He also stressed that games and associated sites must continually refresh since the consumer will become bored with the game or with the branding message.
Marc Girolimetti, co-founder of ActsLike, described some really interesting campaigns including a game engineered to draw FEDEX users to their website to help launch the online booking tools FEDEX had just launched but consumers were slow to embrace. The campaign drew 18K new online users. They also had great success with an online game for the Warner Brothers film "A Scanner Darkly" and a 2nd Life Playboy retail merchandise presence.
Thursday, July 23, 2009
Yesterday I attended a terrific MITX (Massachusetts Innovation & Technology Exchange/MITX.org) panel event on what to expect in the digital marketing arena in the next six months. the panelists included:
Jon Chait - Partner, Dace Ventures;
Kristin Marlow - Client Partner, Razorfish;
Hadley Stern - Vice President, Fidelity Labs;
Shar VanBoskirk - Vice President & Principal Analyst, Forrester Research, Inc.
Each had a strong point-of-view and a distinct approach. Together they gave an interesting, broad brush of the digital terrain.
Chait was particularly persuasive. His main point was that digital marketing is now a two-way communication tool. Simply delivering your desired message via digital tools without allowing the consumer to respond not only misses an opportunity to get valuable feedback but can annoy the consumer who is now expecting to participate in a digital relationship. If you don't give them this opportunity you will piss them off. Of course, this is a difficult change. It requires a leap of faith by the marketer since they are in essence giving a certain amount of control over the conversation and the campaign to the consumer. They may take it in a direction that the marketer didn't expect. He suggested that marketers must become "conversation stewards" who facilitate the conversation rather than simply force a message through a pipeline. He gave some examples of a major foreign auto maker who had expected their new models to appeal to specific segments but found via digital tools that the consumers had other ideas and they used this digital feedback loop to revise their marketing campaigns to reach the markets who were actually interested in specific car models. This shows, Chait noted, that segmentation happens continually and is trackable. You've got to follow consumers as they change. He suggested that it is advantageous to use the same platform to deliver and to measure the digital response since the rapid pace of social marketing iteration and campaign management favors integrated measurement solutions. He wishes there were better open platforms and cost effective solutions for multi-source social marketing anaytics but currently we've observed how integrated platforms have been a preferred solution for customers. He stressed it is important to have very specific and well-thought-out goals and then to use time of engagement, depth of interaction (2nd click throughs) and demographic activation to evaluate the digital campaigns. He suggested some interesting vendors including Vitrue.
Marlow pointed out that many businesses expect that social networking should be a no-cost or "free" marketing option but obviously it is not. She agreed with Chait and said that marketers must be influencers without actually owning the transaction. Metrics are difficult and she stressed that the data achieved through digital tools should be treated as "leads" and the marketer must use them as such and market directly to these leads. She also noted that Razorfish has had a number of companies asking them to help rationalize their various digital syndicates, balance the organizing message while allowing an organic relationship with customers. The problem many companies face is that different groups or individuals have undertaken different digital tools and the messages coming from Facebook or from Twitter may not be coordinated. Of course, you don't want to overly control the messaging but they should definitely not be working at cross purposes. She likens the various digital players (both within and outside the companies) as a sort of "franchise" of the message. Very helpful simile. Some vendors she recommends are Six Part and Federated Media.
Stern says his role at Fidelity is to help the company know where digital users will be six months down the road so that the company can make sure that they are helping to secure and improve the brand in whatever new channels might arise. Right now he seems to be very into non Fidelity website based desktop widgets and gadgets on XP, Vista and Yahoo. Meaningful interactions on other websites (other than Fidelity) are a key to success in the coming 18 months. Use of these widgets are trackable (source of traffic, widget downloads, activation, types of activation) and are often on the consumers laptop dashboard so the brand is a constant presence.
VanBoskirk moderated and kept the conversation going. The first question of the morning was about a Forrester Research paper released Tuesday about 5 media in 5 years. Unfortunately, I wasn't able to locate it but will look and post if I can find it later. VanBoskirk also stressed that platforms should "plug-in" to the companies' digital tools (or vice versa).
Jon Chait - Partner, Dace Ventures;
Kristin Marlow - Client Partner, Razorfish;
Hadley Stern - Vice President, Fidelity Labs;
Shar VanBoskirk - Vice President & Principal Analyst, Forrester Research, Inc.
Each had a strong point-of-view and a distinct approach. Together they gave an interesting, broad brush of the digital terrain.
Chait was particularly persuasive. His main point was that digital marketing is now a two-way communication tool. Simply delivering your desired message via digital tools without allowing the consumer to respond not only misses an opportunity to get valuable feedback but can annoy the consumer who is now expecting to participate in a digital relationship. If you don't give them this opportunity you will piss them off. Of course, this is a difficult change. It requires a leap of faith by the marketer since they are in essence giving a certain amount of control over the conversation and the campaign to the consumer. They may take it in a direction that the marketer didn't expect. He suggested that marketers must become "conversation stewards" who facilitate the conversation rather than simply force a message through a pipeline. He gave some examples of a major foreign auto maker who had expected their new models to appeal to specific segments but found via digital tools that the consumers had other ideas and they used this digital feedback loop to revise their marketing campaigns to reach the markets who were actually interested in specific car models. This shows, Chait noted, that segmentation happens continually and is trackable. You've got to follow consumers as they change. He suggested that it is advantageous to use the same platform to deliver and to measure the digital response since the rapid pace of social marketing iteration and campaign management favors integrated measurement solutions. He wishes there were better open platforms and cost effective solutions for multi-source social marketing anaytics but currently we've observed how integrated platforms have been a preferred solution for customers. He stressed it is important to have very specific and well-thought-out goals and then to use time of engagement, depth of interaction (2nd click throughs) and demographic activation to evaluate the digital campaigns. He suggested some interesting vendors including Vitrue.
Marlow pointed out that many businesses expect that social networking should be a no-cost or "free" marketing option but obviously it is not. She agreed with Chait and said that marketers must be influencers without actually owning the transaction. Metrics are difficult and she stressed that the data achieved through digital tools should be treated as "leads" and the marketer must use them as such and market directly to these leads. She also noted that Razorfish has had a number of companies asking them to help rationalize their various digital syndicates, balance the organizing message while allowing an organic relationship with customers. The problem many companies face is that different groups or individuals have undertaken different digital tools and the messages coming from Facebook or from Twitter may not be coordinated. Of course, you don't want to overly control the messaging but they should definitely not be working at cross purposes. She likens the various digital players (both within and outside the companies) as a sort of "franchise" of the message. Very helpful simile. Some vendors she recommends are Six Part and Federated Media.
Stern says his role at Fidelity is to help the company know where digital users will be six months down the road so that the company can make sure that they are helping to secure and improve the brand in whatever new channels might arise. Right now he seems to be very into non Fidelity website based desktop widgets and gadgets on XP, Vista and Yahoo. Meaningful interactions on other websites (other than Fidelity) are a key to success in the coming 18 months. Use of these widgets are trackable (source of traffic, widget downloads, activation, types of activation) and are often on the consumers laptop dashboard so the brand is a constant presence.
VanBoskirk moderated and kept the conversation going. The first question of the morning was about a Forrester Research paper released Tuesday about 5 media in 5 years. Unfortunately, I wasn't able to locate it but will look and post if I can find it later. VanBoskirk also stressed that platforms should "plug-in" to the companies' digital tools (or vice versa).
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