Business

When “Push” Comes to “Pull” in Marketing

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Push versus pull marketing. "Push" has the upper hand now.
"Push" vs. "pull" marketing: Does "pull" have the upper hand now?
It’s clear that social media is delivering a wide range of interesting and beneficial online experiences for people. One that’s among the most highly valued is the ability to “vet” products, services and brands through reading reviews posted by “real people.”

According to a survey of ~3,330 consumers conducted in late 2011 by Deloitte’s Global Consumer Products Group, a large majority of consumers report that they rely on user reviews to guide their purchase decisions, rather than merely being influenced by brand advertising.

The Deloitte survey found that nearly two-thirds of consumers read consumer-written product reviews online. Of that group, 82% report that their purchase decisions have been directly influenced by these reviews – either confirming their decision to buy or causing them to switch to an alternative product or service.

Because of the perceived value of these consumer reviews, most people begin their search for information via a search engine query or by going to blogs, e-commerce sites such as Amazon that also feature consumer reviews, or review sites like TripAdvisor and Yelp.

By contrast, the incidence of people beginning their information quest at a company or brand website is far lower.

These dynamics are part of the reason why so many companies and brands are looking to increase their engagement with the online public. They’re particularly keen on ferreting out their natural allies – people who have a strong positive opinions about their brand – and turning them from armchair advocates into vocal cheerleaders.

For many marketers, this means going well-beyond collecting “likes” and similar “trophy counts.” They’re also continually monitoring comments in the social sphere concerning the quality of their products and customer service in order to make sure they deal with any issues or complaints expeditiously in order to minimize negative fallout in the “review” environment.

There’s also a powerful impulse for brands to offer “incentives” to customers in exchange for posting positive reviews. Those incentives can range from the small or innocuous – offering discount coupons or inexpensive product samples – all the way to incentives that seem more like bribes. (Here’s the latest example of this, courtesy of Honda.)

The keen attention companies are paying to social platforms reminds us that we’re in the midst of a migration away from traditional “push” marketing into a land of “pull” marketing.

There have always been “push” and “pull” aspects to marketing, advertising and PR, of course. But the balance of energy these days appears to be shifting quite sharply in the direction of “pull.”

There’s no reason to think that pattern will change anytime soon.

Retailing Comes Full Circle … Courtesy of Amazon

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Amazon’s been busy revolutionizing the world of retailing for well over a decade now. So what’s its latest trick? Bricks-and mortar stores.

Yes, you read that right. Amazon’s going into the physical retail game.

What’s behind this seemingly bizarre turn away from 21st century online retailing back to something that seems almost quaint? It’s pretty fundamental, actually. There are many products that consumers find easier to purchase after being able to interact with them physically and personally.

From apparel to electronics to sporting goods, sometimes there’s no substitute for the visceral, sensory experience. Online images, videos, product ratings and customer reviews all have their place, and Amazon doesn’t see those aspects becoming any less important over time.

Indeed, the Amazon store concept builds on all that, attempting to create a multi-channel retailing structure that truly serves the needs to consumers whenever and however they wish.

If what Amazon is developing is “just another” retail shop, it’ll be much ado about nothing. But it’s more likely that Amazon will try to create a retail experience in the manner of an Apple store – creating an environment that has its own special personality and attracts shoppers because of it.

Amazon may generate a good deal of buzz about its newest venture and the novelty of it all. Good for them. But the Amazon initiative also speaks to a more fundamental truth: reminding us that the marketplace is made up of human beings, not machines. People are social … and sometimes we hunger for more than just looking at an image on a computer screen.

If Amazon can successfully integrate its new physical stores concept with its phenomenally successful online retail business, it’ll be another step forward in the creation of truly integrated, multi-channel retailing.

It’s good to see that people are at the center of the model – literally and figuratively.

“Fanning out” when it comes to brands and social media engagement.

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Social media may well be taking the famous 90-9-1 principle of online engagement … and bringing it to new lows.

It’s hard not to come to this conclusion when reviewing the results of research conducted by the Ehrenberg-Bass Institute for Marketing Science. This Australian-based University think-tank studied the actual engagement levels of people who have “liked” the top 200 brands on Facebook by considering the degree to which fans actually shared posts or commented on the brand.

Over a six-week period of study, Ehrenberg-Bass found that fewer than one half of one percent of the brand fans actually “engaged” in any way at all.

The conclusion? It turns out that social media fan bases and actual engagement are two very different things.

Categories that do somewhat better in “engagement” are ones like alcohol, cars and electronics. But interestingly enough, the study also found that the so-called “passion” brands – such as Harley-Davidson, Porsche or Nike – don’t perform much better than “regular” brands: 0.66% engagement versus 0.35%.

In its report conclusions, Ehrenburg-Bass questions whether the Herculean efforts being made by some brands to “bribe” their way to thousands of “fans” and “likes” is really worth the cost in terms of the added product discounts, coupons and other goodies that are being proffered to entice consumers to become brand fans.

When you boil it down, the Ehrenburg-Bass research confirms yet again a basic truism about branding: Much as we would love to think otherwise, the marketplace isn’t nearly as enamored with our brands and products as we think they should be.

To us, the branding so important. To them … it’s just one big shrug of the shoulders.

Taking the “phone” out of “smartphone.”

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SmartphonesAs more consumers migrate to the smartphone from traditional feature phones, we’re seeing a transformation of the mobile phone away from its original “tele” purpose.

That’s the conclusion of several studies by analytics firms Flurry and Wireless Intelligence.

In an analysis of smartphone users’ app activity conducted in December 2011, Flurry found the an interesting breakdown of daily activity that places mobile gaming at the top of the list:

 Playing downloaded mobile games: ~49% of daily app activity
 Interacting with Facebook and other social networks: ~30%
 Viewing mobile entertainment: ~7%
 Checking/reading news: ~6%
 Other applications: ~8%

And Wireless Intelligence found some very intriguing figures in its analysis of smartphone user activity conducted in mid-2011.

Of the average ~38 hours of time spent on smartphones per month, actual “phone calling” represented less than one-fourth of the time:

Messaging activities: ~29% of smartphone user time
 Interacting with apps: ~29%
 Voice activities: ~23%
 Web browsing: ~19%

What we’re seeing is that the original purpose of the cellphone has devolved into a position of distinctly lower importance. In time, it could well become the asterisk at the bottom of the page.

And this is happening inside the span of 15 years.

To borrow a phrase from former Speaker of the House Newt Gingrich, you’d be hard-pressed to cite another device that has so “fundamentally and profoundly” changed its functionality and user purpose over such a short amount of time.

It makes one wonder what the next 15 years will bring …

Social Media Communities: Digital Potemkin Villages?

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Social media stats riddled with fake accounts and cipher profilesMarketers like to talk about the 90-9-1 rule of web engagement: For every 100 people who are online, one person creates content … 9 people comment on that content … and the remaining 90 may lurk and read, but never participate in any other way.

The more we learn about social media engagement, the more we’re seeing the same phenomenon at work. To wit, studies of social networks like Twitter, Facebook and Google+ are finding far fewer numbers of “real” and “active” users than the gross statistics would suggest.

Alarmingly, these evaluations are finding that as many as half of social media accounts could be fake, or are ones that contain no user profiles.

And if there isn’t a user profile, of what value is a social media account to marketers? After all, it’s the information in these user profiles that provides the data for targeted advertising and marketing campaigns.

Just how extensive is the problem?

Let’s start with Google+, one of the latest entrants into the social media sweepstakes. Kevin Kelly, an industry specialist, published author and former editor of Wired magazine, recently conducted an analysis of the ~560,000 people who have him in their Google+ “circles.”

Reviewing a random sample of these ~560,000 users, he found that the majority of them had not made a single post … had not posted their image … and/or had never made a single comment.

More specifically, here’s what Kelly found:

Only ~30% had ever posted anything
 ~6% were “spammers”
 Fully ~36% were “ghosts” … accounts lacking even a user profile

Evidently, Google+ is taking “ghostwriting” to new heights.

What about Twitter?

Several editors at Popular Mechanics magazine reported recently that only ~25% of their Twitter followers were “real.” About half were identified as fake users or spammers.

Twitter may be tweeting away … but how many people are actually listening and who’s actually engaging?

Who’s gaming the system here? Clearly, there are reasons why people are trying to show higher social media engagement than is actually occurring. Marketing campaigns love to cite metrics where the number of followers and “likes” is high. It’s great for bragging rights … and sometimes financially beneficial, too, when performance goals are met and monetary payouts triggered.

And today there are plenty of ways for people to find services that will jumpstart campaigns by garnering thousands of followers or “likes” … all for a tidy fee, of course.

It would be nice if the social media platforms would step up to the plate and show some transparency in what’s going on. It’s highly likely that these platforms have developed sophisticated ways to pinpoint which of their accounts are real … versus those that are contrived.

But will they be publishing their findings anytime soon? Don’t hold your breath.

Until marketers can get a better handle on the “real facts” behind the elevated engagement numbers being hyped, it’s best to view any such stats with a jaundiced eye.

Here’s a suggestion: Take any stats you might hear about page “likes,” viral video views and the like … and discount them by a massive percentage – say, by 50%. Then, you might be approaching the reality.

Over time, we’ll probably learn more about “authenticity” when it comes to tracking true activity and engagement in the social realm. Marketers would do well to demand it. It’s just not clear how soon it’ll happen.

Until then, keep your antenna up and apply caveats all over the place.

(Still) Seeking the Sweet Spot with QR Codes

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QR codesI’ve blogged before about how QR codes – those splotchy icons at which someone can point their mobile device and be taken to a website for product information, a coupon or some other type of content – seem to be having difficulty becoming accepted by the mainstream of U.S. consumers.

And now we have yet more evidence to suggest that QR codes may never achieve the level of potential that marketers have hoped for them.

Youth marketing and esearch firm Archrival give us the latest clues as to the lack of adoption we’re seeing when it comes to QR codes. Here are two key findings from a survey it conducted among 500+ students at 24 American college campuses in late 2011:

 Although ~80% of respondents owned a smartphone and claimed to have come in contact with QR codes, only ~21% were actually able to successfully scan the QR code example that was presented in the Archrival’s survey.

 Three out of four respondents reported that they’d be “unlikely” to scan even one QR code in the future.

What’s the problem? Archrival uncovered a number of hurdles when it comes to QR codes. Several of them could be classified as “deal breakers” in the overall scope of things:

 Many survey respondents did not realize that a third-party app needs to be activated in order to scan a QR code. They mistakenly assume that it can be activated with their camera.

 Other respondents believe that the QR code-reading process is too lengthy and cumbersome.

And on a more fundamental level, doubts are being expressed about the value or usefulness of the web landing pages that are promoted via the QR codes.

What we may be witnessing is a dynamic that’s similar in some respects to what happened with CD-ROMs about a decade ago. There was once a boomlet of CD-ROMs being sent via mail to consumer and B-to-B customers. CDs were viewed as a great way to provide extensive rich content that was difficult to download and expensive to print traditionally.

But because the tool was “one step removed” (it needed to be loaded into a desktop computer in order to be viewed), the rate of interaction with these CDs turned out to be abysmal.

Similarly with QR codes, first there’s the need to possess a smartphone with a barcode scanning app installed. Once properly equipped, people then need to take the time to find and launch the app on their mobile device before pointing the camera at the QR code.

For many in today’s “instant gratification” world, taking those extra steps, however simple, may be a bridge too far.

Consumers and coupons: The latest stats are in.

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Consumers are redeeming coupons more than ever in 2011Coupons are big business in the USA. According to the latest Coupon Facts Report published by NCH/Valassis, a whopping $470 billion worth of coupons were offered by consumer package goods marketers in 2011.

Of this, an estimated $4.6 billion in coupons were redeemed. That represents more than 3.5 billion individual coupons at an average value of ~$1.30 per coupon.

It’s not surprising to learn that the offering of coupons by manufacturers spiked during the recessionary period that began in late 2008, when shoppers were more value-conscious than ever.

But by 2011, manufacturer behavior changed. In fact,this past year saw the first decrease in coupon offerings since 2008 (the drop was 8%) … although the volume hasn’t declined anywhere close to the volume of coupons consumer goods manufacturers offered back before the recession started:

 2007: $373 billion in coupon value distributed
 2008: $379 billion
 2009: $445 billion
 2010: $511 billion
 2011: $470 billion

Not every consumer category behaved similarly in 2011. Grocery product marketers reduced the total quantity of coupons they made available during the year, while marketers of health and beauty products showed no such decline.

With the increased popularity of digital couponing, one would expect that the growth rate in this segment would significantly outpace that of traditional coupons.

That turns out to be correct: NCH estimates that ~11% more print-at-home and paperless coupon offers were distributed in 2011 compared to the previous year.

But digital couponing still represents only a very small fraction of the total coupon landscape, which continues to be dominated by the free-standing inserts that are found in nearly every Sunday newspaper published in America. Here’s how FSIs dominate:

 Free-standing inserts: ~89% of U.S. coupon distribution in 2011
 In-store handouts: ~4%
 Direct mail: ~2%
 Magazines: ~2%
 Coupons inside or on product packaging: ~1%
 Digital couponing (paperless or print-at-home): ~1%

One other interesting study finding is that even though manufacturers reduced the volume of their coupon offerings during 2011 … consumers themselves showed no inclination to reduce their participation.

In fact, coupon redemption was up more than 9% in 2011 versus 2010. Clearly, many people are still thinking in “recession mode” when it comes to squeezing every ounce of productivity from their shopping dollar.

Marketing Measurement: Aiming Really High … Scoring Kinda Low

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Marketing ROI - return on investmentThere’s clearly a disconnect in the world of business regarding the theory and practice of ROI measurement for marketing campaigns.

That’s the key takeaway from the 2011 State of Marketing Management Report, based on a survey of 200+ U.S. marketing professionals in the B-to-B and B-to-C realm.

The research was conducted by Ifbyphone, a Chicago-based developer of voice-based marketing automation platforms, with results published in December 2011.

More than 80% of the marketers surveyed report that their executive management expects every campaign to be measured. But fewer than 30% of the respondents believe they can effectively evaluate the ROI of each campaign.

Not surprisingly, e-mail marketing, with its robust reporting capability, is the program that is reportedly most easy to measure for return on investment … whereas public relations programs are most difficult.

Here’s how eight marketing techniques fared in the survey in terms of their ROI measurement “difficulty”:

 E-mail marketing: ~53% of respondents report difficulty measuring ROI
 Direct mail campaigns: ~59% report difficulty
 Online advertising: ~60% report difficulty
 Print advertising campaigns: ~66% report difficulty
 Tradeshow marketing: ~72% report difficulty
 Social media: ~74% report difficulty
 Search engine optimization: ~76% report difficulty
 Public relations: ~82% report difficulty

The survey found some correlation between the types of marketing tools utilized and greater ability to measure ROI. The most popular tools used by the survey respondents included these five:

 Web analytics: ~48% utilize
 e-Mail marketing software analytics: ~47%
 Lead counts from online contact forms: ~38%
 Social media monitoring: ~30%
 Call tracking: ~27%

The study’s bottom-line finding: Marketers have a good deal more work to do to meet senior management expectations for campaign measurement … as well as to meet their own high standards.

Now for the tough part …

Digital Advertising Growth Forecasts: Rosy Scenarios on Steroids?

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Ad spend forecasts lower than projected.Isn’t it interesting how industry growth forecasts for emerging digital segments always start out looking stupendously stellar? Terms like “swelling demand” … “robust growth” … and “tipping point” often accompany these breathless predictions.

And of course, the business media are highly prone to report the news, as it underscores the fact that highly interesting things are afoot in the marketplace.

What’s done much less often is to go back at a later date and compare the growth forecasts to the actual performance.

But digital media company Digiday has done that, and if you think you remembered industry growth predictions that were a bit high on hyperbole … Digiday’s analysis reveals your memory is right on the money.

One market prognosticator – eMarketer – is often cited for its digital ad market predictions. But how accurate are they? Here’s how it forecast annual mobile ad spending in the United States:

 Prediction by eMarketer published in 2008: $5.2 billion in 2011
 Revised prediction from eMarketer restated in 2011: $1.2 billion
 Percent off-target: ~77%

And here’s how eMarketer forecast U.S. annual video ad spending:

 Prediction by eMarketer published in 2007: $4.3 billion in 2011
 Revised prediction from eMarketer restated in 2011: $2.2 billion
 Percent off target: ~49%

Granted, it is a challenge to forecast growth rates in digital advertising activity early on in the developmental cycle. But being off by such a dramatic degree makes the forecasts essentially worthless – and laughably so.

Another phenomenon may be at work as well. Invariably, the initial growth forecasts are too aggressive rather than too timid.

Why? Rosy forecasts tend to spark more interest from journalists, venture capitalists, publishers and others – and hence have a greater propensity to be published. So there may well be subtle pressure to “err on the plus side” when formulating the forecasts.

Digiday’s Jack Marshall poses that question, too, and then writes: “It’s important to think about where new markets and technologies are headed, but the ad industry often gets preoccupied and overexcited with what are essentially just guesses.”

As for the latest crop of (downwardly revised) growth estimates, Marshall adds: “Let’s reconvene in four years for the inevitable update.”

If you’re a betting person, you’d best wager on the revised figures being lower.

The companies everyone love to hate.

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Bad company ratingsIt seems that there are certain companies people like to criticize all the time. One that I’ve heard quite a bit of grumbling about in recent months is Comcast.

Now comes along a report from 24/7 Wall St, an equity investment data aggregator and investment firm, which has compiled a list of the “Ten Most Hated” companies in America.

Its list is based on reviewing a variety of qualitative and quantitative attributes. Companies were examined based on total return to shareholders in comparison to the broader market plus competitors in the same sectors.

Financial analyst opinions on publicly held companies were also reviewed, as well as findings from consumer surveys conducted by diverse sources (the University of Michigan’s American Customer Satisfaction Index, Consumer Reports, J.D. Power & Associates, ForeSee, etc.)

Also evaluated was the Flame Index, which uses an algorithm to review ~12,000 websites to rank companies based on the frequency of negative words and terms associated with them.

Lastly, an analysis of media coverage to determine the extent of negative and positive news coverage was conducted.

Stripping away such quasi-governmental agencies as the U.S. Post Office, Freddie Mac and Fannie Mae, it leaves us with an interesting list of the “worst of the worst.”

Some of the companies that made the 24/7 Wall St list – and the reasons for them achieving the dubious honor – include:

American Airlines – Not only has this airline filed for Chapter 11 bankruptcy, it’s rated the worst airline for customer service. It’s performing at or near the bottom of the heap on attributes like on-time departures, flight cancellations, and baggage handling problems. American Airlines’ University of Michigan ACS index of 63 is dramatically lower than Southwest – the industry’s leader which scored an 81 on the index.

Facebook – This behemoth may claim a user base of 800 million+, but that doesn’t stop people from having major grievances with the company. A recent customer satisfaction survey conducted by IBOPE Zogby found that ~30% of users consider Facebook’s customer service to be “poor.” (Anyone who has ever actually tried to interface with the company might be tempted to ask, “What customer service?” Facebook has also received negative press coverage for sneakily instituting, with no warning, privacy settings that change how it shares personal information with others.

Best Buy – This company is still smarting over self-inflicted problems during the holiday season when it ran out of popular merchandise it sold online … then neglected to inform buyers of the fact until just two days before Christmas. The retailer’s explanations (excuses?) seemed lame. It’s one reason ForeSee dropped Best Buy from being the second-ranked company for retail satisfaction prior to the holiday season (just behind Amazon). Now Best Buy is ranked so poorly, it no longer appears among the Top 20 national retailers. To make matters worse, Forbes magazine predicts that Best Buy is a prime candidate for simply disappearing … the only question is whether it will happen before or after Sears/Kmart bites the dust.

Netflix – Here’s a company that’s gone from the “highest of the high” to the “lowest of the low” in one fell swoop. Instituting dramatically higher pricing in August 2011 resulted in the rapid loss of more than 800,000 Netflix subscribers … accompanied by the company’s stock price plummeting 30% from over $300 per share to $215 in under six months (and more than 60% for the full year).

Johnson & Johnson – When an iconic brand like J&J can manage to have a slew of two dozen product recalls over a two-year period – including with Motrin and Children’s Tylenol – it’s bound to have a dramatic impact on company performance and reputation. The FDA took over three Tylenol plants in March 2011, and OTC drug sales are off double digits compared to the previous year. While J&J’s stock price hasn’t tanked in the event, it has remained flat – which is horrendous performance compared to the rest of the pharma industry.

For the record, the five other companies named to 24/7 Wall St.’s “Ten Worst” list were:

 AT&T
 Bank of America
 Goldman Sachs
 Nokia
 Sears

… And I’m sure all of us can think of reasons why these also gained entry onto the “rogue’s gallery” of corporations.