Competing technologies in the digital age

https://en.wikipedia.org/wiki/Video_Killed_the_Radio_Star

Sure, Video Killed the Radio Star. This isn't the only example of competition from new technologies, of course. Cassettes eclipsed reel-to-reel audio tape, then CDs eclipsed cassettes, then digital music eclipsed CDs, then vinyl returned in a wave of audiophile nostalgia, followed by cassettes. Streaming continues strong as many consumers enjoy music via multiple technologies.

Currently, vinyl sales in the UK market are 30% higher than at this time last year. Vinyl and other mature entertainment technologies have become popular enough in the digital age that eBay recently introduced a marketplace specifically for books, music, games and video.

Another product category affected by technology: postcards. Before the end of the 20th century, consumers were sending an estimated 20 million postcards every year. Now, however, competition from social media has resulted in barely 5 million postcards sent per year. Why pay for a postcard and postage, take time to write a message and pop it into the post for delivery days later--when you can post a photo or message immediately on Instagram, Pinterest, Facebook or another site? Postcard publisher J Salmon, founded in 1880, is therefore leaving the business.

Perhaps consumers will someday see postcards as unique communication vehicles and give them a go again, the way vinyl and cassettes have become newly popular. Meantime, marketers need to carefully monitor consumer behaviour trends and the impact on the business environment as competing technologies enter the marketplace.

Marketing Social Games

King and Zynga are two of the biggest social game companies in the world, serving hundreds of millions of players every day who log on via computer, mobile or tablet.

If you've played FarmVille, CityVille, Words with Friends or Bubble Safari, you've played Zynga's social games, online or on Facebook (where Zynga has 3.5 million likes). Freemium pricing is the name of the game, with special items available for purchase to help players move ahead. Of course, it's the games that count, which is why Farmville's Facebook page has more than 39 million likes.

Zynga just reported a loss and has purchased the UK game company NaturalMotion to expand its game offerings and provide variety for players. The company is also testing Bitcoin payments.

If you've played Candy Crush Saga, Farm Heroes Saga, Papa Pear Saga or Bubble Witch Saga, you've played King's games, again online or on Facebook. Candy Crush Saga, the best-known and most popular, has 60 million Facebook likes. King uses the freemium pricing model, allowing you to buy hints and extra levels after you get involved in the free game.

Then there's Minecraft, a super-popular multiplayer game that has tens of millions of players. The Minecraft Facebook page has 8.5 million likes.

Social games remain extremely popular. In fact, Minecraft and Candy Crush Saga were the top apps in the UK Apple Store in 2013.

But don't forget Angry Birds, which is relentlessly expanding beyond the virtual world. Angry Birds Land will open at Thorpe Park this May. In 2016, Sony is planning to release the first Angry Birds movie. Today being Chinese New Year, Angry Birds is celebrating with a new music video on the Rovio site.

Rolls-Royce 'not a volume-driven luxury car brand'

Rolls-Royce has great expectations for its latest Wraith model in India, a powerful yet elegant car. 'Wraith is drawing interest from the new customers who have not considered a Rolls-Royce before', says the automaker's general manager for emerging markets-Asia. 

Who is the target market for Rolls-Royce in India? Highly successful entrepreneurs, says the general manager. Although Wraith may attract new customers, it may also be purchased by current Rolls-Royce owners who own more than one car (the Ghost model might be used for business while the Wraith might be used for non-business driving, for instance). 

The company's approach to the market is not volume-driven, because the product is so very upmarket. Yet surely Rolls-Royce monitors sales units and revenues as metrics, and will be tracking progress toward sales goals, especially since overall car sales in India have been trending lower as petrol prices rise.

Festival time is traditionally a time when car purchases occur--and many brands are hoping to gain market share in the competitive Indian market. Rolls-Royce chose to announce its Wraith on its Facebook page, just one of many ways the company stays in touch with its market.

Oxfam goes 'behind the brands'

Oxfam International wants consumers to know more about how the world's biggest food brands approach ethics and social responsibility. The 'Behind the Brands' campaign is aimed at actually changing the way these big brands do business, using the public spotlight and consumer pressure to stimulate change.

Here's what Oxfam's chief executive says: 'Consumers have the right to know how their food has been produced and the impact this has on the world's poorest people who are growing the ingredients. The hundreds of brands lining supermarket shelves are predominantly owned by just 10 huge companies, which have combined revenues of more than $1bn a day while one-in-eight people go to bed hungry every night'.

Oxfam has developed scoreboards and applies seven criteria (including transparency, land use and climate issues) to rank these 10 big food marketers:

• Associated British Foods (owner of Ovaltine and other brands)
• Coca-Cola
• Danone
• Kellogg
• General Mills
• Mars
• Mondelez (formerly Kraft)
• Nestle
• Pepsi
• Unilever

Nestle was among the first to respond to Oxfam's rankings regarding its chocolate products. Among other actions, it is studying how to have a strong, positive impact on women in its supply chain. Oxfam welcomed this response and urged prompt planning and implementation.

Needless to say, social media like Facebook (where Oxfam GB has 128,000+ likes) will play a role in the success of 'Behind the Brands'.

Social Media Marketing, Starring the Rolling Stones

The Rolling Stones performed a 50th anniversary concert in London last month . . . and now this global phenomenon continues to roll along with enthusiastic fan involvement via skillful, broadly based social media marketing.

The official Rolling Stones website features links to the band's Facebook page (11,500,000 likes), Twitter (248,000 followers), Tumblr, Google+, YouTube (29 million views), Pinterest, Instagram (4,700 followers), RSS feed, and a free newsletter.

Plus plenty of social media mentions from the Stones' participation in the giant Superstorm Sandy Concert at New York City's Madison Square Garden. 

A band from the 60s is very smart about cutting-edge marketing. Want official merchandise? The Stones have their own online store. Pay-per-view concerts on your mobile? In the testing stages. Happy anniversary to the Stones!

Coca-Cola's 70-20-10 marketing

In March, Coca-Cola's marketing chief explained Coca-Cola's marketing investments this way:

"We invest 70% of our resources in existing products, 20% in innovations related to existing products, and 10% in pure innovations."

As an example of the 70% investment, Coca-Cola introduced the new 375-ml "pocket size" bottle earlier in the year. Minute Maid Pulpy, created for China, is a pure innovation that has become a best-seller throughout Asia.

Coca-Cola retains the #1 position in InterBrand's ranking of 100 best brands. It's launched a number of sustainability initiatives in recent years, including the PlantBottle (recyclable, biobased packaging).

Most important, Coca-Cola is embracing social media to engage its brand advocates. The CMO says his thinking has changed over the years: "I used to think that loyalty was at the top of the pyramid of classic marketing awareness model, but now it’s advocates."

Coca-Cola is reaching out through Facebook and other social media to stimulate dialogue with brand fans and remain relevant to its target market. The company has more than 54 million Facebook likes, by the way, and 630,000 Twitter followers. It's on YouTube, Pinterest and Flickr as well.

The Ferrari train and social media

Earlier this year, the sleek, bright red, high-speed 'Ferrari train' (real brand name: Italo) began service in Italy. You can see its stylised running rabbit logo at left.

Owned and operated by Nuovo Trasporto Viaggiatori, a startup headed by Ferrari's chairman Luca Cordero di Montezemolo, Italo now connects 11 stations in 8 major Italian cities. Fares are very competitive with the price of intercity air travel, and the roomy seats and other amenities set Italo apart from ordinary train service.

This startup is a high-stakes project requiring a combination of careful engineering and careful marketing for long-term success. The Ferrari train captured a lot of media attention in its early months, with reporters and passengers commenting on its cinema car, its free Wi-Fi Internet access and all the other details that contribute to the overall experience. Now it has to capture sufficient market share to reach the breakeven point and become profitable.

Italo is reaching out to passengers in multiple social media: It has more than 225,000 Facebook likes, more than 19,000 Twitter followers and 368,000 video views on YouTube. It's also offering advertisers the opportunity to reach passengers with ads on the side of the train, in snack areas and on the Italo's website.

Italo's high-speed railway competitor is the state-owned ItaliaRail Alta Velocità (right), which has a long history of service and is busy upgrading to retain loyal passengers. Alta Velocità's newest bullet trains (by Bombardier) will begin running next year, adding more speedy and efficient alternatives for passengers who want to travel from city to city quickly and in comfort.

How will airlines in Italy react to all this railway competition?

Social gifting is trending higher

'Social gifting makes it easier for customers to give their brand as a gift and is also a good way for retailers to get data on their offline customers that they couldn’t otherwise get'.

That's the way managing director David Van Reyk describes DropGifts, a social gifting firm with an app that lets gift-givers buy and deliver a gift card to a Facebook friend with just a few clicks.

Wrapp is an international social gifting company that has UK deals with House of Fraser, Shuh, eFlorist and other marketers. Wrapp operates in 8 countries and is planning to expand to 9 more nations within months.

One advantage of social gifting is flexibility: recipients can buy whatever they choose with a gift card--and marketers can learn more about buying patterns by monitoring such purchases. Another advantage is convenience for gift-giver and recipient, because the gift card is digital and can be redeemed by mobile or tablet in any participating merchant location (or online). Finally, a social gift is, well, social: Once a social gift appears in the recipient's Facebook Timeline, other friends can choose to contribute toward it as well.

How much interest will social gifting attract during this year's holiday shopping season? That's the question many marketers want to answer as they consider whether to participate and which company will gain the most shopper acceptance.

Getting social with Jack Wills

Jack Wills describes itself as 'University outfitter, fabulously British', although anyone between the ages of 17 and 22 won't need to refer to that description. With more than £100 million in annual turnover, the fast-growing retailer has expanded beyond UK markets to US resort cities, Hong Kong and beyond. 

Jack Wills puts more emphasis on social media and word of mouth than on traditional adverts. Its stylish Seasonnaires are brand ambassadors for the retailer's preppy fashion image, media friendly and the life of the party--made for social media.

Watch for Jack Wills and the Seasonnaires on a long list of sites:

• Vimeo (231 videos uploaded, so far)
• Facebook (416,000+ likes) 
• Twitter (84,000 followers)
• Tweets and blog posts from the Seasonnaires
• Soundcloud (audio files uploaded by Jack Wills)
• Flickr (photo stream about the Seasonnaires)

The top UK social brand is . . .

According to Headstream, the leading UK social brand in 2012 is Innocent, maker of smoothies and fruit drinks.

Headstream cites Innocent's sense of humour and distinctive voice. Joe McEwan, communities manager, at Innocent, comments on the brand's social media success: “We’ve always wanted to build actual relationships with our drinkers. It started with talking to people on our packaging, inviting them to call the bananaphone, meeting them at events we put on, and so on. It naturally extended into digital and then social media as those channels evolved.”


In a different study, released by eDigitalResearch, Topshop is identified as the leading UK brand on Twitter and Facebook, as measured by followers, likes and fans. Right below Topshop is ASOS. Both are at the leading edge of change in fashion retailing.

Another Successful Byte Night

The most recent Byte Night, held earlier this month, raised over 650,000 pounds to benefit the nonprofit Action for Children.

If you haven't heard of Byte Night, it's the info-tech industry's annual "sleep rough" fundraiser. Corporate teams and individuals sleep out in the elements to raise money for programmes that help vulnerable and neglected children around the UK.

Accenture conducted research about "the generous generation," examining how tech-savvy adults in their 20s and 30s stay involved with the causes they care about. Not surprisingly, the research showed that technology such as social media plays a vital role.

In fact, a lot of technology was used to market Byte Night and recruit sponsors and sleepers. Twitter messages kept the momentum going minute by minute and engaged all participants; a countdown on Facebook (left) reminded participants of when and where to go; organisers and participants used YouTube to share videos of the experience; and LinkedIn was helpful for corporate connections. As shown above, contributors could text their donations, as well.

Congratulations to Byte Night!

Debenhams 'likes' social media marketing

Debenhams has more than 55,000 'likes' on Facebook. The retailer also maintains a Beauty Club Facebook page with more than 90,000 'likes' plus a Beauty Club Blog with cosmetics tips and new product news.

That's not all. Debenhams posts messages on a storewide blog, posts videos on Debenhams TV, offers a Debenhams app, and offers an e-mail newsletter with special offers for subscribers.

In short, Debenhams 'likes' social media marketing.

The retailer's head of brand and advertising tells New Media Age that its Facebook audience fits into three segments: young mothers, busy working women and women with older children who have time for social media interaction. Now it is starting to determine the best times of day and days of the week to communicate with each segment via social media.

Debenhams is also awarding Facebook Credits (redeemable for virtual products in social media games) to customers that 'like' the store's Facebook page and provide an e-mail address. To reckon whether the programme provides a return on investment, metrics will be used: 'We plan to monitor the behaviour of the e-mail addresses to see how many collected [Facebook] Credits but didn't return to interact with Debenhams', says the retail exec. Smart marketing implementation and evaluation.

Social media marketing ROI

Can you measure the bottom-line results of social media marketing? In the early days of Twitter, Facebook, LinkedIn and YouTube, the focus was on setting up accounts, adding content and attracting an audience. The most commonly-used metric was (and still is) audience size. How many Facebook users "like" your page? How many Twitter followers do you have? How many YouTube views do your videos or adverts get?

However, building an audience is only the first step in applying metrics to determine the return on investment in social media marketing. To make social media marketing pay off, you'll need to actively engage the target audience in your marketing activities.

The third step, illustrated above in a diagram by Jamie Turner for Mashable, shows that social media marketing is a long-term activity. To earn a real return on social media marketing, you have to convert your followers/fans/viewers to actual customers and retain their loyalty.

Research suggests that consumers are more likely to buy from brands that they are followers or fans of. Over time, if you actively engage your audience via social media marketing and listen to their comments as much as you post your own, you'll be better positioned for higher revenue and a positive return on investment.

The royal wedding, social media and consumer behaviour

Even as huge crowds lined the streets of London to participate in last week's wedding of the decade, even larger crowds were airing their views minute by minute via social media. Social media sites absolutely buzzed with wedding news for days, a great example of how this technology is affecting consumer behaviour.

When Mashable tracked social-media mentions of the wedding, it found that tweeters, in particular, were posting many more comments than Facebook users and bloggers. This makes sense, given how short a tweet can be, and the fact that many people tweet on the go via mobile.

The Royal Wedding figured prominently on the royal family's Facebook page. The wedding had its own official Twitter hash tag (#rw2011) used by @ClarenceHouse, the official Twitter presence. And of course there's an official YouTube page for the royal wedding, complete with wedding book for online "guests" to sign.

Google celebrated with a special home-page doodle of a royal couple in horse-drawn carriage, acknowledging the world-wide interest in the Duke and Duchess of Cambridge. It added a wedding cake to its YouTube page, as well.

UK and US media contributed mightily to the social media buzz, with reporters live-blogging, tweeting and posting on Facebook journalism pages before, during and after the wedding. They invited members of the public to share their thoughts on media blogs/Facebook pages (as well as with their friends and others). Surprisingly, most of the wedding-related tweets were, in fact, from US commenters, although UK social media users were extremely active in sharing photos, memories and more.

Without a doubt, social media has emerged as a highly effective influence on the thoughts, feelings and actions of customers. Any marketer that doesn't engage brand fans through social media is missing an enormous opportunity.

Should you mix social and mainstream media?

Can you create an effective marketing campaign using only social media? Yes. But should you?

• Be ready to change your media strategy. Facebook and YouTube are gaining in popularity among UK consumers, according to Nielsen/Ukom. Facebook's rise to the top (it's #3 among Web sites accessed in the UK) has been particularly meteoric; YouTube is #8 (while Twitter is a surprisingly low #38). Twitter's 5th birthday is next month and it will undoubtedly move up the list in the coming months. The same Nielsen/Ukom study noted the rapid rise of sites from mainstream media, such as BBC. The lesson is: know your audience, know what media they use and be ready to change your media strategy as needed.

• Consider mixing social media and mainstream media. Why? A new Hewlett-Packard study disproves the perception that “the most prolific tweeters or those with most followers would be most responsible for creating” the posts that drive trending topics to the top of Twitter. Instead, the study found that mainstream media such as BBC and CNN are actually amplifying topics, contributing to the trending that drives these topics to the top. In other words, mixing mainstream and social media may help get your message across to more people in a shorter period.

• Don't forget mobile marketing. The mix of social media being used by consumers in different parts of the world offers ample opportunity for communication, says SearchEngineWatch.com. In Japan, Mobage-Town, a mobile-based social media platform, is increasingly popular (and profitable) because of the ability to connect and play games on the go. Now that Mobage-Town is expanding into other countries, will Facebook react? And how will that affect your marketing? BBC already has special pages that look good on mobiles, as do other media and marketing firms. Depending on who you want to reach and what you have to say, mobile may be an effective addition to your media strategy.

Social media 2010

Happy new year! It's a good time to look back at one of 2010's key marketing trends--the enormous growth in social media marketing, a trend that will certainly continue into 2011 and beyond.

First, what were the top search terms last year? Experian Hitwise says that in 2010, as in 2009, Facebook was the most searched-for phrase online. No surprise, really. I am a bit surprised that MySpace rose so high in the list last year, however. Thanks to SmartDataCollective for collecting so much of the social media data on one page.

What about social media usage? According to Social Media Today, Australia leads the world in social media users. This is another surprise (US and UK follow Australia in the list). The Financial Times says that businesspeople in the UK now use social media more than search engines.

In Britain, Facebook was the most visited Web site on Christmas Day, the first time it has surpassed Google. And all around the world, Twitter and other social media are spreading news instantly, reinforcing users' interest in and commitment to these media. This applies to marketing, as well, with favourite adverts going viral in multiple media.

How will social media influence and be influenced by marketing in 2011?

What's ahead for Bebo?

Bebo.com was incredibly popular, especially outside the US, when AOL paid $850 million in 2008 to acquire it. However, AOL didn't invest heavily enough in new features even though competitors like Facebook were aggressively expanding and adding enhanced services month after month. Facebook roared ahead in user numbers and media coverage.

AOL sold Bebo earlier this year (for a paltry $10 million) and now the new CEO insists that the site is "here to stay, and grow." He points to a recent increase in membership (bringing total users to 117 million worldwide) and notes that the personalisation features will help Bebo attract and retain users; he sees MySpace as eventually fading away.

Bebo recently introduced a new instant messaging service and says it has even become profitable. Meanwhile, MySpace is redesigning its site to hold onto users, and Facebook continues to innovate, even as its privacy policies and control of personal data draw attention and, at times, controversy.

What's ahead for Bebo, and how will it affect competition among social media in the coming years?

[Updating coverage of social media marketing in Chapter 9 of Essential Guide to Marketing Planning 2d edition]

Social media's value to e-tailers

According to Hitwise, online retailers are receiving more traffic from social media this year than last year. Although Hitwise's report indicates that entertainment products top the list of retail categories receiving visits from social media users, apparel is #3.

That's why French Connection has opened an online store within YouTube, so viewers can click and buy without leaving the video site. Take a look at the "Youtique" here. The online store describes itself this way: "Look amazing for any occasion with the world's first personal shopping experience on YouTube, hosted by top stylist Louise Roe. Are you ready to get gorgeous?"

 The e-tailer already has more than 160,000 "like" votes on Facebook and an active Twitter presence, with almost 4,600 followers.

French Connection is also involved with mobile marketing, inviting consumers to get text message updates by subscription.

The bottom line for French Connection is: Social media drives online traffic and sales.

Debenham's fine-tunes its marketing

Debenham's is the latest retailer to jump into in-store/online TV. The company has moved into multimedia in a big way, with an iPhone app, mobile marketing, YouTube-style videos related to products and services, and social media of all types (Facebook, Flickr, Twitter, YouTube, blogs).

Recent blog entries promoted the retailer's contests, fashion designers and other subjects directly related to Debenham's marketing. The store also maintains a beauty club blog (see illustration above) with seasonal tips and product announcements.

With all this marketing momentum, Debenham's profits are up and the retailer is increasing its own-label fashion range to reinforce brand differentiation and loyalty. The big yearend holiday shopping season is almost here--will Debenham's be able to leverage its various media and messages to beat the competition? The outlook is very good.

Regulating social media marketing

The Advertising Standards Authority will soon regulate social media marketing in the UK the way it regulates advertising in newspapers, on television and in other media. The goal is to protect children and consumers by putting virtually all marketing communications under ASA regulations.

In the past, if the ASA received a complaint about a Web site ad or a claim about ads in social media such as Twitter or Facebook, the watchdog group didn't feel able to take action, saying the complaints were outside its authority. From March, that won't be the case.

ASA chairman Chris Smith says: "When this goes live next March, this will be the most comprehensive approach to the regulation of advertising in website space anywhere in the world.”

To see how Financial Times writer Tim Bradshaw answers readers' questions about this new regulation, read today's thread of comments tagged #FTchat on Twitter and follow him at http://twitter.com/tim.