Ads on Social Network Sites: Friends or Foes?

Social network web sties give us places to connect with people with whom we share common interests. The fun, interactive environments in which we talk to friends and make new ones started out as commercial-free zones. However, as the popularity of social network sites grew, marketers could not resist the urge to reach us, and social network hosts could not pass up the revenues ads can create.

While social network ads have the potential to turn off the very people they are intended to reach, it appears that most visitors to social network sites are OK with the presence of ads. A study conducted by Razorfish found that 76% of social network site visitors do not mind the presence of ads. Further, 40% of those people surveyed said they had made a purchase following ad exposure on a social networking site.

Before advertisers begin lining up to create clutter on our social networks, a word of caution. Social networks provide an ideal platform for audience engagement through brand fan pages, games, or other interactive experiences. The real promise of social networks as a communication vehicle is this relationship building capability they possess. Ads are OK, but marketers should be more creative in using social networks for deepening consumers’ relationships with their brands.

Link: ClickZ – “Social Networkers Don’t Mind the Ads, Says Razorfish Report”

E-Mail Marketing: Opt-In Doesn’t Grant Permission to Annoy

Permission-based e-mail marketing campaigns are the only way to go in terms of building and maintaining positive customer relationships. When customers grant permission to a marketer to contact them via e-mail, it opens the way for ongoing communication that is wanted and considered more relevant and less intrusive than other media. That is, provided the content and frequency of communications are well managed.

The goodwill spawned by permission marketing programs can be hurt when e-mail messages become off-topic from what customers indicated were the types of information they wanted to receive from a company. Also, too many messages, even if they are offers for sales or special savings, can turn recipients against companies that become too aggressive in their e-mail marketing efforts.

Marketers will be put to the test this holiday season as they battle a weak economy by offering consumers many promotions to encourage purchases. E-mail campaigns driven by permission marketing can be very effective; avoid alienating people who want to hear from you by over-communicating with them.

Link: USA Today – “E-Tailers Push E-Mail Discounts to Lure Shoppers”

Expensive Sales Promotion or Cheap Publicity? Welcome to the Marketing Jungle

Dr. Pepper went out on a limb earlier this year by promising everyone in the U.S. a free can of soda if heavy metal rockers Guns N’ Roses released a new studio album. Since the band has been quiet for 17 years, it seemed like a reasonable possibility that it would not have to pay off on the promise.

Now, it appears that free Dr. Pepper for all is just ahead. The band is scheduled to release a studio album, “Chinese Democracy,” on November 23. Assuming the release occurs as scheduled, Dr. Pepper plans to make available one free can of product per person to anyone who comes to the Dr. Pepper web site and registers for a coupon on November 23.

Will this promotion go down as one of the most expensive in the history of marketing? If all 300 million or so people in the U.S. took advantage of the offer, one estimate is that the promotion would cost Dr. Pepper $165 million dollars. Of course, not everyone has the desire or the means to log on to request a free soda on November 23. So, regardless of the final cost of the promotion, it is likely that Dr. Pepper will enjoy brand publicity that will be much more valuable than the cost of the sales promotion. As long as GNR does not do anything to embarrass Dr. Pepper, this promotion should be a PR success for both the band and Dr. Pepper.

Link: AdAge.com – “Free Dr. Pepper for All as Guns N’ Roses Album Release is Set”

AC/DC Passes on Digital Distribution, Partners with Wal-Mart

Australian heavy metal rockers AC/DC have released a new album, Black Ice. It has been 8 years since the band’s last studio album, and a lot has changed in how music is distributed and consumed… but not for AC/DC. The band has opted not to make individual songs available for sale online. Their preference is to have consumers buy the entire body of work an album entails rather than the à la carte approach of iTunes and other digital music download services.

In another departure from conventional marketing strategy, AC/DC has chosen Wal-Mart as its exclusive retail partner for Black Ice. According to the band, the decision is all about market penetration. Wal-Mart is certainly the choice if you are looking to maximize your points of distribution. It is an interesting choice for Wal-Mart, too, as the rough and tumble image of heavy metal rock is in contrast to the folksy, small town picture Wal-Mart has painted for years.

The absence of a digital strategy for AC/DC may have been a non-issue so far in the early years of the digital era, but this is their first album of new music in the iPod age. Will sales suffer because of their principles, or will AC/DC be “Back in Black,” reaping the benefits of its exclusive distribution deal with Wal-Mart?

Link: USA Today – “AC/DC Freezes Digital Outlets out of ‘Black Ice’ Album Sales”

Barack Obama: Infomercial Star?

Barack Obama is taking his message to the TV airwaves in a big way. The Obama campaign is buying a 30-minute slot on as many as three major networks on October 29, six days before the Presidential election. The programs, which will air in prime time (8:00-8:30 Eastern), give Obama an extended forum to inform votes of his position on various issues. A decision as important as on which candidate to vote for President requires more information and elaboration than can be provided in a 30-second commercial or an orchestrated debate.

These “infomercials” will allow Obama to look into the camera and talk to Americans without questions from journalists or over the frenzy created by enthusiastic crowds. The TV buy is typical of the remarkable marketing communications strategy used by the Obama campaign that has utilized mobile media, blogs, and yes, even traditional mass media.

Link: Response This Week – “Obama Buys Half-Hour of Prime-Time Broadcast”

What’s Old is New… and Sells Well for Starbucks


New products are the lifeblood of a business. They fuel growth and stimulate interest for a company and its offerings. The quest for new products often suggests images of massive spending on research and development in the hopes that something truly new to the world can be created. New product development does not have to be that radical to be effective. Starbucks is proving that point, as many new product introductions have done before it.

A “new” breakfast item, oatmeal, has been a hit with Starbucks’ customers. In particular, younger customers and women have been key customer segments that have responded favorably the product. Oatmeal is now the number one selling food item at Starbucks, and although food is not a big part of its business, the fact that oatmeal rose to top seller status in one month’s time is noteworthy.

In a time when a business must carefully spend every dollar, new product development may not require the massive investment and research that one might think. New products can be something as old as oatmeal that is presented or packaged in a way that creates value for the customer.

Link: AdAge.com – “Starbucks’ Surprise Success: Oatmeal”

Businesses Lacking in Social (Networking) Skills

The social networking craze is one of the greatest opportunities presented to marketers in many years… if they can figure out how to harness its potential. The power of person-to-person communication based in communities of people with shared interests makes it possible to engage customers in conversation and more importantly, allow them to take charge of the conversation. It is less about creating exposure and more about establishing rapport with people.

A recent study by research firm Gartner reflects both the promise and pitfalls of social networking as a marketing platform. The study predicts that 75% of Fortune 1000 firms will have some type of social networking initiative in the near future. That figure is indicative of the promise that social networking as a means of getting feedback from customers and enabling word-of-mouth communication and community building. It is indicative of the promise if marketers use social networking in a way that supports overall marketing strategies.

Unfortunately, the expectation is that half of the companies employing social networking initiatives will experience failure of those initiatives. Why? It is a problem of “leap before you look.” If a brand rushes to establish a presence on Facebook or MySpace, what does it expect to achieve by being there? Are social networking tools used by your target market? If yes, how do they use them? To search? To listen? To talk? To meet others? These questions go unasked too often, and the result is usually disappointment that social networking did not pay off. How could it if there is no strategic focus for it to play a role in brand building and customer relationship development?

Link: Cnet – “Analyst: Half of ‘Social Media Campaigns’ Will Fail”

Media’s Impact on Consumer Confidence

If someone were to come up to you and say “I’ll give you $100 if you can explain to me how our economy got into the current mess that it is facing,” could you earn that Benjamin? I don’t think too many of us could. We may not be able to explain what is going on or how we got to this point, but most of us realize what is happening to the U.S. economy is not good for it… or for us.

The result of the daily media analysis of our economy is that confidence in it is shaken badly. It is a real concern for sure, and that concern has been elevated by the frequency of messages from the media. If you hear something enough times, you will begin to believe it. So, if people were skeptical of the economy being weak or even oblivious that there might be something amiss, the gloomy tone of coverage has convinced many of these people that they should be worried.

The concerns we have are forcing us to curtail spending and consumption in many areas, notably clothing and dining out. Some categories may be insulated somewhat from the frugal consumer, most notably entertainment. Sales of video games and DVDs continue to be unaffected overall by the economic slowdown. In fact, it is these indulgences that are a source of escape, taking our minds off of tough economic times. Businesses that sell products or services that can meet this need may find some solace in a period when sales and profit expectations are uncertain at best.

Link: The New York Times – “Full of Doubts, U.S. Shoppers Cut Spending”

Economic Slowdown Means Innovation Slowdown

The effects of the current state of the economy on consumers is well known. Higher prices on gas, food, and many other products and services have hindered consumer spending. The economic crunch has an impact in another area that is less noticeable to consumers but can have a significantly negative effect on our economy. That area is innovation.

Entrepreneurs rely on funding from venture capitalists and other financial sources to support their efforts to bring new products or services to market. But, a slow economy and uncertain credit markets have prompted these financial entities to pull back on their investments. As a result, budding businesses will have more difficulty raising money to take their ventures to the next level. Consumers will ultimately suffer as great innovations that lack funding to take it to the broader market will take longer to reach market, if they reach market at all.

Link: The New York Times – “Credit Crisis Spreads a Pall over Silicon Valley”

Marketing with a Cause in a Weak Economy

Cause marketing is an effective tactic because it enables a marketer to connect with consumers on an emotional level. Associating with a charity or non-profit that a brand’s target market cares about has great potential for positively impacting brand image. It is a great way to convey the message that a company is caring and seeks to make a difference. On a more practical level, cause marketing can drive revenue growth. Consumers may be willing to make a purchase (often at a price premium) because a product has partnered with a cause and pledged to make a donation contingent on product sales.

Today’s difficult economic times should serve as a catalyst for firms to review their utilization of cause marketing. Shoppers need a reason to buy. Low price is a compelling reason these days, but it is not the only motivation to make a purchase (nor the most profitable for marketers). Buying a product because it is tied to a cause that matters to the target market still is a persuasive tool that could nudge consumers to buy the sponsoring brand. Another benefit of being involved in cause marketing is that non-profits often are squeezed in a down economy as private donations and governmental support decline. Their partnerships with for-profit firms provide needed resources and provide a platform to keep the cause in consumers’ minds.

The questions to ask pertaining to the role of cause marketing are “What cause should I align my brand with that will resonate with consumers?” and “How can we use the resources of our company to make a positive impact with our cause partner?” This approach will lead to a greater chance that a cause marketing campaign is a winner for the cause, your customers, and your brand.