Market and Social Research – not broken…just bent

by Peter Harris ON 15 May 2013

I’m getting a bit tired of endless inward-looking discussions in the research industry about why market research and market research professionals are not valued more by business, not to mention the predictions by many pundits of the impending death of market research.

Well, here’s a message to the doomsayers: if market research was dying why are companies such as Google, Facebook and IBM trying to break/buy into market research? I read, I watch, I learn about business and I still do not see a better way to grow a business than to invest in frequently understanding your customer. The opportunity for customers to change business has never been greater so market research should be growing. But the traditional measures say that we are not. Why?

Because market research is only bent, not broken.

So how do we unbend it? How does business learn to love market research again? Technology. Technology that has the potential and ability to change everything.

The digitisation of advertising has transformed the ad industry. It has dramatically impacted the margins, the speed and volume of work, the output and skills required by agencies big and small. It has changed the way budgets are prepared and allocated, and demanded new thinking and process.

So what have we been doing in research at the same time? Yes we do more online, and use mobile surveys, yes big data is here as are social media listening tools and they are all making noise and challenging us, but are we adapting fast enough? In my humble opinion the answer is ‘no’.

I don’t need the CMO or marketing director to understand market research or what we do. Why? Because it’s time for CEOs themselves to fall back in love with customer input.

You won’t be surprised to hear that the most impressive change I have witnessed is how an insight community allows clients (and CEOs) to connect with customers more often, more cost effectively and much, much faster.

This means more issues, more policy and more new products can now receive some form of consumer or constituent lens prior to decisions being made.

In the recent Greenbook Research Industry Trends Report (which has a bias towards North America), the two most used and emerging technologies under consideration by companies are online communities and mobile surveys. Put these two things together and you have mobile communities.

Well managed and populated mobile communities are the future of research, I am sure of it.

I see this as the digitisation of customer connection and I see it as the future of market research. I see the end of the long form survey coming, it simply won’t work on mobile and mobile will be everything. I see the liberation of research and buyers of research, real time 24/7 availability of data, interesting engagements, moving from interruption to enjoyment, research interactions that create positive word of mouth and a real want to get involved and tell your friends about.

It’s not qual or quant, its listening, asking, observing, passively collecting and then distillation of all of these into knowledge.

Quality, professional standards and privacy will continue to govern what we do and should always be table stakes, not the premium offer. We need to ensure new players in professional market and social research adhere to these standards – but we need to bring them into the tent, not fight them off.

Welcome to the digitisation of customer connection, a world where we are working towards a new market research paradigm that will encompass a raft of evolving elements including: customer and consumer feedback that is always on; shorter surveys (six minutes max!); iterative learning; profiling knowledge stored and reused instead of asked again and again; shorter, sharper, longitudinal learning; mobile or Facebook enabled; making good use of valuable open ended responses (especially in B2B); treating customers and consumers like people not a sample source; forming mutually beneficial partnerships between agencies to leverage technology and expertise; leveraging what humans and computers do best; continuous learning not custom research; fewer research ‘projects’ and more exploration of customer needs; real linkages between advertising and sales; agility and most of all…making it all about them, not us.

This is a world that CEOs will find value in. This is a world that they will value what you and I do. This is a business tool that they will invest in.

Our industry has a great future, one that is healthier and stronger, but only for those who choose to adapt.

Making the consumer connection that Steve Jobs might have approved of

by Peter Harris ON 12 April 2013

I’m often bemused at – and getting increasingly tired of – the inward-looking discussions in the research industry about why market research and market research professionals are not valued more by business.

After all, there is no better way to grow a business than to invest in frequently understanding your customer. Or is there?

In my role, the majority of my time is spent talking to marketing and market research professionals about their business, and trying to work out how we can help.

One of the more challenging responses I hear is that Steve Jobs didn’t use market research to grow his business. Well, perhaps not in the traditional sense. Jobs was famously quoted as saying, ‘Customers don’t know what they want until we show them,’ and I think this is true. What was so admirable about Jobs was how much he understood, very early on, that people who were interested in using computers were frustrated by their complexity. He would have discovered this by understanding their lives in detail, walking the proverbial mile in their shoes.

One of the problems business faces these days has been that really understanding your customers lives requires frequent contact, which has always been expensive and time consuming.

Luckily, technology has finally caught up with market research and the best use of technology in research is in the space of online insight communities. In my experience, the creation and management of online insight communities can move market research from being an expensive, slow and complicated back-room application to being front and centre, creating and then managing a direct line of communication between a business and its customers in real time. Knowledge is built collaboratively and iteratively which results in fresher insights generation, accelerated innovation and improved brand advocacy.

I said something similar to this in at a global research conference in 2009 in China, and, more than three years on, I have had the opportunity to work with over 40 leading brands throughout Asia Pacific and Europe in the establishment of their online insight communities.

Every brand has a different use and reason for building an insight community, however, the results I have witnessed have been staggering and include:

An FMCG company in Australia conducted more than 50 research studies through their insight community, with a conservative estimated value of $1m. This cost them less than $250,000,
a large Australian company uses its customer community to recruit face-to-face qualitative research and face-to-face meetings with its CEO (for closer customer connection),
brands can now use their community to conduct in-home product tests with customers at a tenth of the cost of traditional recruitment. They use the community to understand their customers’ lives and then when they have potential solutions, they use it again to test their hypothesis and improve their products,
online forums can replace sense-check focus groups in half the time and with five times the geographic coverage, and
companies can access their customer community to quickly answer the queries that always come out of quarterly tracking presentations – at no additional cost.

I think the most impressive change I have witnessed is how an insight community allows clients to connect with customers more often which means more issues and more new products can now receive some form of consumer lens prior to decisions being made.

I see this as the digitisation of customer connection.

The bottom line is there’s no excuse for anyone to assert that asking customers what they think is a waste of time. Anyone who thinks this simply has not discovered the power of a well-managed, branded, insight community. The ability to connect more frequently to understand your customers life is a form of market research that Steve Jobs might well have approved of – and enjoyed!

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Ten ways market researchers can improve their pricing

by Jon Manning ON 4 February 2013

This month, I’ve been working with a few people in the market research industry, where structural change and economic factors are putting pressure on the industry’s pricing and revenue.

In this episode of ‘Ten Things’, I take a look at ten ways market research organisations can improve their pricing and thus their bottom line, including:

Segment your clients,
Segment your services,
Develop less expensive alternatives (LEAs),
Establish a centralised, or centre-led approach to pricing,
Consider alternative pricing models,
Offer a choice of pricing models,
Ask for the client’s assessment criteria,
Factor in contingencies to your pitch,
Think about getting, as well as setting, prices, and
Learn how to, and be prepared, to negotiate.

Enjoy!

Coles’ next-gen customer feedback project

by Marketing ON 26 October 2012

Campaign: Tell Coles

Client: Wesfarmers

Agency: Twist of Lime

Background

Core to Wesfarmers’ turnaround strategy for Coles was to become a more customer-centric organisation. Integral to achieving this was developing new capabilities in shopper insights to continuously understand and learn from the everyday shopping experiences of customers in Coles stores. Store experience is a crucial part of the marketing mix and a potential point of difference. Furthermore, overseas retailer experience showed that improved store experience increases loyalty, time in store and average spend per shop.

Prior to this program being implemented, Coles had no systematic ability to capture customers’ store experiences continuously. Ad hoc research studies were expensive, slow and limited to a small selection of stores, not representative of the full fleet of stores.

Coles identified the opportunity to create efficiencies and new capabilities by developing a store experience survey that ‘streamed’ feedback from the stores through the organisation. By continuously listening to and learning from its customers, Coles believed it had the opportunity to drive improvements both at store level and at the store support office.

Objectives

The logistical limitations of traditional customer research were very apparent when we reviewed our list of requirements. We could not wait weeks to collect the data and report results. Generating hundreds of individual reports to stores and store operations teams was not going to be cost- or time-effective. Rather, our objective was to continuously collect data on customer store experiences across the fleet of 750 stores in real time, around the clock.

We also recognised that many of the recipients of the reports, such as store managers, would be unfamiliar with research. They would likely not see survey results as a priority compared to the range of other business operations metrics they have to deal with each day. Therefore, we needed to create a system that delivered feedback that could be easily understood and acted on by the stores. The feedback needed to be presented in a way that was engaging and with the highest levels of automation possible.

Most importantly, we needed to identify opportunities to improve the experience of Coles customers in the key areas of product and range, price and promotion and team member experiences. In other words, the feedback needed to be actionable and ‘real’ and prompt Coles store team members to think ‘Why did that happen?’ and ‘How can I improve that?’ Finally, the program would provide the insights team with the opportunity to ‘piggyback’ ad hoc surveys on to the store survey, significantly reducing spend on expensive stand-alone market research studies. We could also learn about shoppers’ habits, motivations and needs and Coles could use this information to develop marketing and operational capabilities.

TellColes flier

Strategy

Our strategy with ‘Tell Coles’ fell into two levels:

operational: gaining respondents’ feedback and getting it back to the store and operations managers for their continuous review and action, and
store support: analysing the feedback data to identify general insights and improvement opportunities.

While simple in concept, the challenges in setting up ‘Tell Coles’ were substantial and often unprecedented. To deliver our strategy, a whole suite of new web-based technologies had to be developed, which collectively delivered a custom and world leading capability. This included developing a mobile optimised survey platform, online automated dashboard reporting aligned to the operational management structure, automated email push reporting to deliver results to managers’ mobile devices each Monday in time for their operational review meetings, and dynamic word cloud technology for exploring open-ended customer feedback and identifying themes.

Execution

Our goal was to help Coles become nothing less than the most customer-focused retailer in Australia. From the outset, therefore, the Coles Shopper Insights team engaged with representatives from Coles Operations and listened to their needs and designed technology solutions to address them.

For six months, the Coles Shopper Insights team, Coles Operations Group and its partner Twist of Lime (a joint venture between web company WDU and research agency Evolve) worked together to devise a solution. The resulting ‘Tell Coles’ program was piloted in 240 stores from November 2009 to September 2010. The program was launched in all Coles and Bi-Lo stores nationally in October 2010. TellColes feedback2

Invitations were distributed to stores, and short training sessions were run with team members on how to approach and invite customers to participate in the program. The invitations included QR codes to launch the mobile version of the survey (around one in 10 surveys is on a mobile device). Customers were encouraged to participate by offering a $5 discount off their next $100 grocery shop and entry into a monthly $1000 prize draw.

An SQL (structured query language) database and ASP (active server page) front dashboard were designed to report results to stores and store support. Designed with users in mind, the dashboard displays results each week and identifies key improvement opportunities according to defined criteria. The results are collated to match the user profile: store managers see only their store feedback, while regional managers receive an aggregated view of all the stores in their region.

Customer comments can be mined using integrated dynamic word clouds to highlight the key themes from the customer feedback. An online analysis tool was also developed to allow the Coles Shopper Insights team to further drill down into the results, and allow analysis of ad hoc questions, which can be added to the program at short notice.

TellColes console words

Results

‘Tell Coles’ has now been running at full capacity since December 2010. Currently, an average of 25,000 surveys are completed each month, with more than half a million individual customer surveys received to date, making this one of the largest research programs in Australia outside of the government Census. Testament to the value of this information to Coles, the internal reporting dashboard has received more than a million page impressions. Estimated savings on equivalent research costs over the life of the project have been estimated at over $4 million.

The feedback has been used extensively by stores to improve the in-store offer to customers. Since the program commenced, overall satisfaction with shopping in Coles stores has significantly increased, with one of the greatest improvements seen in the fruit and vegetable department. By matching feedback with basket spend data, it has shown that higher satisfaction drives increased basket size, implying considerable financial benefits from the program.

Improvements in customers’ experiences of Coles are evident in many areas, big and small. An example is the Coles store in Dalby, which was receiving hundreds of customer comments regarding having no cover in the car park, despite being located in tropical north Queensland where it is either extremely hot or pouring with rain. Based on the consistency of customer comments, Coles was able to negotiate with the centre owner to have shade sails erected, resulting in very happy customers.

This level of information ensures Coles is always looking at the performance of stores through the eyes of the customer. By asking customers to say what they think of their store, Coles is giving itself the greatest opportunity to provide a superior shopping experience. Embraced by customers, store managers, line managers and the executive team at Coles, ‘Tell Coles’ is now an integral part of everyday business at one of Australia’s largest and most important retailers.

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Frowns and smiles become ad testers as ‘facial coding’ lands in Aus

by Marketing ON 29 August 2012

Frowns, smiles and other facial expressions are set to join brain activity and other observed responses as the latest predictors used in ad testing research.

Research agency Millward Brown has added ‘facial coding’ technology to its ad testing tools, claiming it can give insights into how audiences will emotionally react to advertising and indications of the ad’s impact on brand perceptions.

“Facial expressions paint a rich canvas of emotional response that provide invaluable insight into advertising and brand effectiveness,” the research agency says, claiming to be the first to offer the service in Australia.

Global brand director of Millward Brown’s ad testing tool ‘Link’, Daren Poole says for analysing mood there’s no substitute for a smile, laugh or frown. “Traditional methods of measuring emotion are not always capable of capturing a true emotional response,” Poole says. “Facial coding allows us to track how a person really responds, rather than what they claim to have felt.”

Facial coding uses webcams to record and measure real time emotional responses during ad viewing, analysing a viewer’s spontaneous reaction to the concept as they sit behind their computer at home.

The approach can measure how well an ad captures a viewer’s attention, how they respond to it, and can also predict ad cut through and impact on brand perceptions and sales, according to Millward Brown.

Millward Brown’s Link is an ad testing tool for creative development and evaluation that has been used in the development of 84,000 ads worldwide. Neuroscience, a technique which measures brain activity, is a key part of the technique and has been promoted by research and specialist agencies for serveral years now. Millward Brown, fellow researcher Nielsen and Neuro-Insight are just some of the firms that offer the service in Australia.

Poole says the facial coding tool has the ability to be a good fore warner of ads that may be poorly received. “If a campaign is pushing the boundaries in terms or humour or controversy this is a controlled means to test how consumers really respond.”

Crowdsourced mystery shopping: iPhone app recruits shoppers to spy on staff

by Marketing ON 20 August 2012

Crowdsourced mystery shopping app, Field Agent, has signed up almost 20,000 shoppers for retailers to employ as smartphone-bearing mystery shoppers in its first year of operation.

The service, which lets shoppers submit photos of stores, complete staff service, price and promotional compliance checks and take part in surveys in store, has been used by retailers including David Jones, Coles, Witchery, 3, Microsoft, Westfield and Mimco.

It’s another example of digital automation of the market research process, turning the traditionally hand-written feedback process of mystery shopping into a simplified and crowdsourced technique. Results can be delivered via the iPhone app’s interface in real time by members of the 19,000 strong panel who are near the job location, eliminating the fieldwork costs of sending shoppers out and processing hard-copy feedback forms.

User companies off the service list the job they need done on the app for a registered shopper to complete in return for an incentive. Boost Juice Bars recently used Field Agent to check the consistency of a promotion across five states. General manager of Boost, Scott Meneilly comments that the data, which started to come through 20 minutes after the job went live, enabled the retailer to contact stores that did not meet promotional compliance standards.

Launched in 2011, Field Agent is a joint venture between The Realise Group, an Australian customer experience and research organisation, and Field Agent USA.

Q&A with Sarah Robb O’Hagan – global CMO and North American president, Gatorade

by Marketing ON 19 March 2012

Sarah Robb O’Hagan has been global CMO of Gatorade for four years, and was last year appointed North American president of the company. She will be speaking at Circus – The Festival of Commercial Creativity, running from 27–29 March in Sydney.

Can you give Marketing readers a preview of what you’ll be talking about at Circus?

What I’m going to be talking about is what I’d call the new rules of brand engagement, and how we, in our business, and in the US market, think about consumer engagement very, very differently now. And I’ll be talking a lot about expert examples of how you really need to think about creativity differently in a world that is so powered by the consumer and social media, etcetera, and the programs they use to engage them are different to what they were in the past.

As well as being global CMO of Gatorade for four years, you’re now also president of the company in North America. Is that a deliberate choice for the brand to be led by a marketer?

Yes, very definitely. I think it’s interesting when I slipped into the president role, it was because we knew that what had really driven the business forward – obviously we’ve reshaped how we’re thinking about Gatorade for the future – was a creative and marketing mindset. So, I think there was a real desire to take some of that thinking and use it throughout the rest of the business. It’s been a good exercise, I think, because it’s enabling us to think about the business across every facet as the brand, whereas in the past some companies think marketing people do marketing and then they’re done. Well, actually, creativity and consumer connection fuels every part of your business, your distribution, your retail programs, etcetera, so that’s really a key to how we’re thinking about it now.

For CMOs that aren’t fortunate enough to also be directing the company, how do they go about convincing those in charge to get on board an idea or vision?

I do accept that the role of the CMO, and corporations in general, has so dramatically changed in the last 15 years, because it used to be that the product team would come up with their ideas, the commercial team would decide where in the marketplace they’d go, and the CMO was effectively doing traditional advertising and communications. Now, the world is moving so very quickly that marketing is the product, it’s how it stops at retail, it’s how the consumer is engaging and tweeting about it, it is every single touch point that it possibly can be, which means the CMO, if they’re not figuring out how to bring all of the pieces of the business together under one creative vision, they’re almost falling behind in terms of what some of the competitors might be doing. They actually think of the role of what we used to call the CMO is almost the chief curator of the company now; they’re understanding the consumer more deeply than anyone else, and they’re figure out across all the levels, whether it’s product, sales, distribution and communicating to marketing how to activate and bring them together.

Paint the picture of the future in a very fact based way. Where in the past those that held the money might have looked at the marketplace opportunity in terms of FMCG, for example – the FMCG business has very distinct competitors and we look at market opportunities in terms of who the competitors are, what the profit pools are and that’s how we make our decisions. A smart marketer can actually completely change the conversation by saying, well, actually there’s an entire white space in consumer opportunity that no one’s going after, that I can see, because I know the consumer really deeply, and I can quantify it. And I can create concepts that I believe we can make as a company to go after that opportunity, and then of course, I can communicate and market it. So, the smart marketing person is the one that can paint that picture of the future in a very financially grounded and fact based way.

You’re a proponent of market research that’s very much ‘out-in-the-wild’, getting to know the consumer personally. What’s behind that philosophy?

You hear the great creative leaders of our society say that the consumer can’t tell you what they don’t know, and so in conducting physically quantitative research in the last 20 years we were often using quantitative tools to try and come up with the most mass sized consumer proposition that would meet the most people’s needs, and quantify it using very analytical tools. Unfortunately, that can only get you so far – it can’t help you understand what the future opportunity may be. The only way you can find that out is by deeply, empathetically, understanding the consumer and then identifying the problems that they have to solve, that they may not even be able to articulate themselves.

That’s how I look at creating the future, but you can also apply the same thing in reacting to initiatives you’ve just put in the marketplace. Whereas 10 years ago we might have used traditional tools by link testing to decide on ad concepts, is this going to be liked by the consumer? In this day and age we will put TV spots on the air and check the copy or the edits within 24 hours just based on what we can tell the consumer is getting out of it from social media, if it needs to be changed, that is.

I think of it more like surfing a wave, putting things out there, seeing how the consumer is reacting, iterating what doesn’t work to make sure the point you’re trying to get across, you get across. Now, I’m not suggesting that if a consumer doesn’t like something that you change it, because it may be that’s not a consumer you want it to appeal to anyway. But certainly you can understand very, very quickly if the consumer needs that you are trying to solve, and how you are trying to communicate it, isn’t getting across; you can quickly evolve on the spot just by listening.

Is there still a place for traditional market research?

Of course there is. We have a very nice balance on how we run our business of the quants and the qual: the quants can tell you what’s going on, the quals can tell you why, and I think it’s important to balance the two but what I would say is that getting too reliant on, and looking for models that will prove something will work, is flawed because consumers are changing and evolving, so it’s very, very quickly that you’ve coaxed yourself into a false sense of what can work, and by the time you’ve launched it, it might have changed anyway.

Can you give us an example of in-the-field qualitative research at Gatorade?

At Gatorade we spend an inordinate amount of time, either through social channels or real time, in locker rooms, talking to pro athletes and high school athletes. We have teams that are not just research teams, but anyone in the business who is out in the field, that we’re constantly asking to connect with the consumer, talk to the consumer, discuss what you heard, and I think we have a very good process of connecting those little insights that people might hear, a small insight on a field of playing with an athlete, that we can then go back and say, “Are we hearing that theme chatted about in a much bigger way? And is there something bigger bubbling up that we should be aware of or not?” I think we do a good job with both real world and virtual, social channels, combining the two, to understand where the opportunities lie.

How did Gatorade’s ‘Mission Control’ social media monitoring room come about?

Four years ago, before we started the transformation of Gatorade, the business was using a very old school marketing mix. 90% of our budget was on TV: one-way dialogue to the consume, what we all used to do in the good old days. And we realised very quickly that we had to change the game and we had to understand how to play in the new world quickly. The first year, I’d say, we made a big shift by moving 30 or 40% of our budget from TV to digital in one year, just because we knew we needed to do that.

What was interesting is we got this huge social dialogue going around at the time – it was a new position for the brand when we changed the logo to ‘G’, but we were so ill-equipped to deal with it because we set this thing off, not realising we were going to have this tidal wave of conversation around our brand, and we didn’t even know how to track it.

Quickly we went, whoa, back up, we need to think about digital and social media very differently. So we put in place Mission Control, and at the time, to be honest with you, it was as much about changing the behaviour of our team internally. By putting this physical room in the building where we have people from different marketing disciplines – we have the PR folks in there, we have our digital folks, brand management folks – it was forcing them to see the dialogue in real time and act on it and communicate across the different functions of marketing.

Initially we said let’s just start it as an experiment and put it in as a listening room and see what it can be, and quickly we realised it’s enormous potential because it’s not just what you learn from it, it’s how you very quickly engage with the consumer on the spot. We never anticipated how quickly it would replace a lot of our research techniques that we used to use.

As a brand, we have a very focused core consumer with high school athletes. I think we probably know more about who on Twitter is the most influential influencer of end user athletes than Twitter does, because we’ve made it our business to know that. And that, in and of itself, becomes a marketing tool to be leveraged.

How quickly could you use an insight that you gain from social media listening?

It depends what it is. If it’s creative executions, it can be as quick as 24 hours. If it’s distribution opportunities – I talk to people a lot when I am doing features, and there is a fallacy that social media is just digital because it’s actually people wandering around giving real time data at all times in the world, in the marketplace – we have a team that is out there doing what we call ‘point of sweat’ distribution, and we can use Mission Control. People posting on Foursquare that they’re having athletic occasions and we don’t distribution around it, we can use it. That’s a very quick insight we can turn around, but that would obviously take more like a few weeks by the time you get on-the-ground guys around it.

So, it can be very, very quick, and then for new product development it can be as far out as about six, 12 months in the making, and we’re constantly using Mission Control to iterate on what we’re developing as well.

In the Mission Control video it shows maybe half a dozen people in the room. Are there always that many full time staff there?

Yeah. Those are full time, but we staff it up around big launches, and obviously around holiday times and when we know that communication around the brand is lighter, we scale it down a little bit. It’s flexible, but even the people whose jobs are full time Mission Control, when they’re not in the room over a long weekend or holiday, they’re always empowered to correct an incorrect discussion around Gatorade; they can do it from their house if they have to.

Social media crosses so many boundaries for us that our PR agency actually leads most of the social media efforts, but it does cross over into some of our other agencies as well.

What changes has social media listening brought to the brand?

At the macro level I still find the statistics phenomenal. Gatorade in the US, when we first put Mission Control in place, at that point, a benchmark of all the conversation happening in the social space around our brand, 70% of the conversation about our brand was either about flavours or hangover cures, and as a company that was trying to go back to our core, and really focus more on sports performance, that, as you can imagine, was somewhat alarming. And about 16 months later, after we had put a lot of programs in place with Mission Control, listening and learning and interacting, when we looked at the statistic again, by that time, 70% of the conversation around the brand was around sports performance, so protein recovery, carbohydrates for fuel before you work out.

And it just tells you – for any brand out there – if you put the people in place to listen and interact in the most appropriate way with the conversation happening you can change the conversation to be what you want it to be around your brand.

And then how do we do it on a daily basis? We’re not a brand that’s out there with the Gatorade Twitter handle just blatantly turning up in conversation saying, ‘here we are, come buy us’. What we’re doing is listening for when someone tweets, ‘I’ve just been for a run, I’ve got really sore legs and it was one of those long runs, what do I do?’ It’s a really appropriate place for the Gatorade handle to respond and say, ‘You should be having 20 grams of protein in the next half hour. Here’s an article you might be interested to read as to why,” and then we’re out. And because of that, we’re providing utility to the consumer, but also a really deep engagement of having them go, ‘Well, I want to hear more from you, Gatorade. That was quite helpful.’

The interesting thing is, when you do it that way and you enter the conversation, it’s no different to a dinner party. You don’t just turn up and say, ‘Here I am. Listen to me.’ You enter the conversation in an appropriate way. Then it’s almost like they’ll come to you to start consuming the content you’re creating because you created the engagement in the first place, so they want to hear from you.

Looking inward, does Gatorade use social media for internal branding or culture creation?

We’re actually starting to do a lot more of that now. I’m very active myself on social media, and we decided strategically to start with me, to figure out how people engage and what they’re looking for, and now we’re really trying to encourage our employees, no matter what department they’re in, to get on the social media channels and as they feel comfortable, represent the business. And not because we’re asking them to push anything, but more. I firmly believe that transparency, in this day and age, is so important. What’s wrong with people being able to see what it looks like to work at Gatorade?

In terms of fostering the culture, what we stand for to the consumer is what we stand for to the employee, and we do a lot of programs where we encourage our employees to take part in athletics whatever their athletic goals may be, and we support every employee living what the brand stands for. But I wouldn’t consider it internal branding as much as it’s just taking the messages to the consumer and personalising it for the employee.

Gatorade is the clear market leader in the US. What’s your philosophy on innovation for the brand?

Innovation drives everything for us, really. Yes, we’re the market leader, but we don’t see that as a reason to rest on our laurels. We have a very, very strong innovation sector now. We’re relentlessly looking for new opportunities, to the point where, at times, some people ask me, ‘What keeps you up at night?’ What keeps me up at night is there is so many opportunities sometimes it’s hard to choose which one to go after, because I think we have a very vibrant culture internally around innovation, and constantly challenging the status quo. From a board context, we’ve taken the business from being just a sports drink business to a sports performance innovation company. We went from being just a drink that any food or beverage you put in your body, and then we’ve actually gone beyond that and said, ‘Why are we just product? We should also be services.’ So we’ve got some very interesting service models and things in a couple of months for the brand as well.

Innovation in terms of products and services was driven by our R&D and marketing teams, but the marketing team has definitely taken ownership for where the brand has a right to go, and then what are the consumer problems to solve? And out of that will come the innovation solution, and that crosses many avenues, if you will, but it’s a constant collaboration between the marketing team and our R&D and our science team.

When I came in to the company, which was four years ago, we had not been doing a lot of innovation. We had been expanding in terms of distribution and growing the business that way, and I was hired very specifically to rethink what the brand could do and be and what the innovation opportunities were.

We’ve really pushed very hard to change the thinking, I guess, and focus the growth to come from innovation instead of this broadening of distribution as it was before. A big piece of that – the R&D, the Gatorade Sports Science Institute – is something we have always had in our arsenal. We were doing this incredible research about exercise physiology, but we hadn’t commercialised a lot of it. Now you’ll see a lot of the innovation coming out of us. It’s taking this knowledge that we always had and turning it into products and service that are very useable for the athlete.

You’ve previously worked on some pretty big brands such as Virgin and Nike. Are you drawn to these ‘rockstar’ type brands, and what have you learned from those experiences?

When I left New Zealand, I actually had a very strong purpose-driven agenda that I wanted to work for Nike because of the sports side of it, and I wanted to work for Virgin because at the time – this is back 15, 20 years ago – in terms of what Richard [Branson] was doing to really change the game on what a brand could be, was very, very interesting to me as a young student coming out of college. Virgin was inspired more by wanting to learn, actually. If you could go and work on a brand like that, you could learn a lot about how to be a great marketer in general, and then Nike was because of my strong passion for sport.

I remember going to Virgin, having proximity to Richard Branson, and thinking, ‘wow, he’s going to be the genius guru that I will learn everything I could possibly need from’, and in actual fact, Richard is phenomenal, but he also doesn’t do it all. He’s very good at empowering the people around him. He’s an intuitively brilliant business man that can see the opportunity and then empower incredible people to get it done. So, that was a huge learning for me seeing that come to life.

At Nike, I think everything we’ve talked about here, the innovation culture, and the discipline it takes to drive the brand, it’s a local brand, and constantly being reinventing yourself and creating the future. I don’t think there’s any other company of the world, with the exception of Apple, who do it as well as Nike. That was an incredible experience to learn from.

You clearly have a great passion for sports – does that personal involvement need to be there for people to use it effectively in business?

From my experience, having a real passion for what you are marketing is really, really important. I spent a couple of years in the video game business, because that was a great place to go learn about a new up-and-coming area of culture. I hate video games, I hated video games, I still hate video games, and I hated it, and I was a disaster. I couldn’t get my ideas across, I couldn’t connect well with my co-workers, I couldn’t figure out how to understand the consumer. It was just a disaster. And I compare and contrast that with working for Gatorade where I get up and run every morning, I live what we stand for about that because it’s so a part of who I am, and I think as marketers, I always see people do their best work when they feel it in their bones, when they so empathise with the consumer that they’re trying to connect with. Because if they don’t, it’s really hard to fake it.

Would you have any advice for marketers in other companies that might not be so easily connectable in a personal way? That work on brands that may be, let’s say, a bit more boring?

I always think any brand has the opportunity to not be boring, and I think for any marketer, you’ve got to figure out how to ladder that brand up to a reason for being, and if the reason for being is something you can emotionally connect to you can have a lot of fun. I think more and more in this day and age, we’ve got to a place in the consumer marketplace where there isn’t really much opportunity to have a proprietary idea anymore; pretty much any company that comes out with something, somebody else copies it in another company within a few months. But the most compelling brands are those that really stand for something, and they ladder up to a higher calling. And that’s something, I think, pretty much any marketer out there can find for their brand if they look hard enough.

Sarah Robb O’Hagan will be speaking at Circus – The Festival of Commercial Creativity, running from 27–29 March in Sydney. For more information on the event and other speakers, visit circusfestival.com.au

Twitter to sell old tweets to advertisers

by Marketing ON 5 March 2012

Micro-blogging network Twitter is opening up its archive of old tweets to advertisers, with archived tweets being sold off for research purposes, as part of the social network’s plans to generate more revenue from its services, sparking renewed privacy concerns around social media.

Previously, advertisers were able to access tweets from the past 30 days of Twitter updates, but that has been expanded to 24 months, allowing for greater market research and targeting opportunities.

Users themselves only have access to the past seven days of their tweeting history.

The first company to offer the archive, the aptly named, UK-based Datasift, processes around 250 million tweets every day, analysing them for content and tone.

Datasift’s marketing manager, Tim Barker, says it’s a massive technological challenge, and unexplored territory: “No one’s ever done this before,” he tells the BBC.

“It’s a brand new service that we’re bringing online – it’s a massive technology challenge because of the amount of data that is pumped out every single day.”

Access to the archives starts at GBP£635 per month for individuals and developers, with prices increasing from there depending on company size.

Private accounts and tweets that have been deleted will not be indexed by the service, which will also trachea social media influence and location data.

The prize for Twitter, as it searches for revenue streams, is the licensing fees it will collect from Datasift.

But executive director of Privacy International, Gus Hosein, told BBC that people use Twitter to communicate with friends and networks in the belief that their tweets will quickly disappear into the ether.

“The fact that two years’ worth of tweets can now be mined for information and the resulting ‘insights’ sold to businesses is a radical shift in the wrong direction,” Hosein told BBC.

“Twitter has turned a social network that was meant to promote real-time global conversation into a vast market-research enterprise with unwilling, unpaid participants.”

Digital footprints

by Marketing ON 5 January 2012

This feature first appeared in the September 2011 issue of Marketing magazine.

They say if you really want to get to know a person, you need to walk a mile in their shoes. Matt Granfield talks to some of Australia’s savviest digital marketers and finds out how they’re tracking the digital footprints of the nation and then using that information to lead consumers to the checkout.

You’re being watched. Every move you make is being tracked.

Keep your head down. Stay calm.

Whatever you do, don’t look behind you. That’s not where they are. They’re in front. In the screen. In the computer. They know everything. Everything.

Sit down. Go to google.com/history. Log in. There it is. Everything you’ve ever searched for. How to yodel – the number to order a pizza – the answer to the pub trivia question you were asked in June 2006 (the capital of Turkmenistan is Ashgabat, in case you’ve forgotten). Google hasn’t forgotten.

And that’s just one website. There are thousands, perhaps millions more. You have been watched since the moment you first went online. The news knows what news you like. Facebook knows who your friends are. Your bank knows when you last checked your balance. Your favourite charity knows precisely what time you read your email. You will be watched tomorrow. If you’re on a computer, or a mobile device, you are being watched right now. Don’t worry though. They’re watching you for your own good.

They’re watching you, so they can help you.

Does it sound creepy? You’d want to hope not, because you’ve probably done a bit of watching yourself.

You’re a marketer. You use Google Analytics. You know where your visitors are from. You know how long they stay. You know what keywords they use to find your site and you know which pages they visit. Whether you realise it or not, you’ve been placing cookies on their computer so you know when they come back. It’s all good though, cookies are cute. Cookies never hurt anybody.

Actually, that’s a lie. Maureen Govern was hurt by cookies… 650,000 of them, in fact. Govern was the chief technology officer at AOL in 2006 and she was in charge when the company publicly released the search history of 650,000 users for ‘research’ purposes. The users were identified only by a number, but The New York Times did some snooping and discovered that it was fairly easy to connect a person’s search history to a person. They released some names, and let the world know there were people out there searching for ‘Beauty and the Beast Disney porn’, among other more sordid queries. Govern resigned.

Your search history may be vanilla by comparison, but that doesn’t make your digital footprints any less interesting to marketers. In fact, as the world’s information shifts into a digital cloud, smart marketers are getting more and more sophisticated in the measurements they take – if you can learn to read the cloud properly, you’ll know when it’s about to rain money – and the technology is getting a lot more sophisticated than Google Analytics.

The shift from website analytics to customer intelligence

While Google’s website visitor analysis program (or its earlier forefathers) was the first stepping stone on a path to online enlightenment for many marketers, companies like Experian have made multimillion-dollar businesses out of showing companies a lot more than just the IP address of a user. In fact, online customer behaviour is now starting to drive innovation in areas as diverse as product development, supply chain management and purchasing trends.

Matt Glasner, general manager of Experian Marketing Services, explains how the world has changed. “Australian consumers are spending more and more time in the online space. The increase in digital media usage has subsequently increased the collection and analysis of data, which was very difficult in an analogue world,” he says.

“Not only are organisations now capturing customer data from online activity, they’re also analysing and drawing insights from the activity. The data that this consumer activity provides can drive innovation through the detailed measurement of customer and market data that is more readily available in a digital world.

“Businesses can take this data and use it for not only product development, but also marketing material. For example, (budget electronics retailer) Kogan recently launched above the line ads based on recent real-time social media feedback, so they are taking the sentiment of their existing customers online and replicating this to their target audiences on a larger scale above the line.

“When businesses harness the power of these technologies and interact directly with consumers online, they provide a faster, more relevant and responsive way of engaging with existing and potential customers.”

And that engagement gets a whole lot more profitable once you can lead it down a sales funnel in an online shopping environment.

Paul Downs is the co-founder and director of Hitworks, an ecommerce consultancy that helps retailers make the most of their online stores. A former CIO (chief information officer) of City Beach, he decided to start Hitworks when he realised just how little Australian retailers knew about what was actually possible when they started tapping into the data available online.

“One of the biggest opportunities online is in the wealth of data you can capture through the transactions your customers are making,” says Downs.

“The data allows you to get a much better understanding of what your customers’ buying patterns are, and you can start a dialogue with them and you’re then able to tune promotions to what they’re looking for. Through continual harvesting of information on their buying patterns, and by talking to them, you can start to do that. You can get to a level of sophistication where your ecommerce system tailors the products that are presented to the customer when they come to the site. The Utopia is that you end up presenting the right product at the right price to the right person at the time they’re looking for it.

“Amazon is a good example. When I log in to my Amazon account, it recommends me products because it knows what I look at and it knows what I’ve bought. So, rather than me logging in and just cruising around looking for stuff, it says, ‘Hey, you might be interested in this’.”

Downs says smart retailers are doing more with user data than just deciding which products to show people. Smart marketers, he believes, use data to profile their customers in detail and then use that knowledge over time.

“Great retailers in this space understand their customers’ consumption behaviours and are therefore better placed to understand what a certain type of customer will spend in a given cycle, say annually. That then drives the level of discount and offers presented to that customer to drive increased sales.

“My experience with a number of Aussie retailers is that they are a million miles away from the concept of customer intelligence, let alone the execution of it – which means there is a fantastic opportunity for those prepared to embrace what Europe and the US have been doing for some time.

“For example, if you know customer type ‘A’ spends a few thousand dollars with you a year, you’re more likely to give them a 20 percent discount than someone who shops with you once. The software and platforms to do this are available now.”

Remarketing

But it’s not just website visitors who are providing marketers with digital footprints to follow. Tracking technology is now being applied to online advertising, allowing brands to target ads to people who’ve visited their website once they’re long gone.

In 2010, Google launched an innovative ad product called Remarketing, which allows advertisers to show ads to users who’ve previously visited their website as they then go on to browse the web. It works by allowing a company to tag pages of its site that correspond to certain categories it wants to promote. For example, an electronics retailer could add a ‘TV’ tag on all of the pages where it sells televisions and then create an AdWords campaign to show messages to people who’ve visited these pages as they browse TV-related sites across the Google Display Network (publishers who have elected to display Google ads on their web pages).

Google Remarketing product manager Aitan Weinberg says companies have been quick to embrace the technology.

“We rolled out Remarketing one year ago across the Google Display Network, and we think we have a hit on our hands,” he says. “In 2010, the total number of advertisers using Remarketing grew an average of 113 percent every quarter after launch.”

He adds that Google is continuing to develop the product and is beginning to use complex algorithms to mine user data for the best results.

“In the year since launch, we’ve boosted performance and scale with three key enhancements to make Remarketing even more powerful for the largest to the smallest of advertisers. First, we now enable you to show a relevant ad right after a potential customer leaves your site, when our internal analysis shows they’re most likely to click. Second, we’ve improved the algorithm that helps determine, in real time, how much you should pay for each impression in order to maximise the possibility that a user will click on your ad. Finally, the growing reach of the Google Display Network means you can reach your customers on more and more sites across the web.

While Google can’t point to any specific Australian case studies, Weinberg highlights three US firms that have experienced success with the program:

the Yankee Candle Company, which used Remarketing to re-engage shoppers and increased conversion rates by 600 percent while cutting cost-per-conversion in half
Lenovo, which increased sales by 20 percent and lowered its overall expense-to-revenue ratio by 14 percent in a campaign that included Remarketing and display across multiple networks, and
etrailer.com, an online towing parts retailer that saw twice the click-through rate at a 75 percent lower cost-per-click with Remarketing, compared to its typical display advertising campaigns.

Digital footprints in email and B2C communications

While the retail industry is starting to get display advertising runs on the board by utilising smart data, it’s still the one traditionally struggling to get its head around how to communicate directly with consumers without being labelled as spammers.

Lisa Arthur, chief marketing officer of marketing automation software company Aprimo, says that satisfying educated consumers requires that marketers provide the right information, when, where and in what forms these educated consumers want it.

“The blast campaigns of the past produce low response rates, and just a half a percent spam complaint rate will start to get you blocked by major mailbox providers all over the world,” she explains. “As a result, marketers must master new ways to answer critical, long-standing questions about the overall effectiveness of both traditional and new interactive online marketing programs. For example, what level of interest was generated by last week’s special offer? Is the marketing program reaching the desired demographic regions?”

Arthur says that to take full advantage of interactive marketing, B2C marketers need to adopt a holistic approach based on the simplification of processes and the integration of deep customer intelligence.

“Email blasts of the past have been replaced with online marketing that creates a dialogue with consumers, requiring the creation of custom content that can hold the attention of the educated consumer,” she says.

Arthur outlines three key ways a B2C marketing strategy should be using data to achieve maximum results:

built-in capabilities for triggered/event-based email marketing to allow marketers to personalise content and introduce rules-driven communications that can be scheduled to meet campaign objectives
interactive dialogues that can be triggered from email or landing page responses, as well as web-browsing history on company website properties, and
the ability to quickly and flexibly set up m-sites, landing pages, and forms to suit each project.

Arthur says that interactive marketing also requires marketers getting access to the right information – particularly in heavily ‘siloed’ organisations where IT, customer service and marketing all keep different sets of data on who is interacting with the brand.

“Customer data is typically gathered and managed by multiple departments and organisations within each business,” says Arthur. “Many marketing tools limit the amount and type of customer data that can be referenced. B2C businesses must fully leverage deep data drawn from multiple channels from offline connections to email response, form and survey data and company website browsing history. As a result, marketers can create highly focused content for uniquely engaging customer experiences.”

Successful campaigns, she says, should be able to segment users into groups based on the frequency of marketing communications they respond to, send ‘win back’ messages to those recipients who aren’t engaging, use social media to invite opt-in subscription requests from new fans and followers, and create interactive experiences on dedicated landing pages to engage users.

“Clearly, to build trust and loyalty, you can’t spam your customers and their contacts. The era of the educated consumer is here, unleashing revolutionary changes in how B2C marketers must interact with audiences. Nowhere is this new balance of dialogue, education and selling more evident than on the web,” concludes Arthur.

You can prove anything with statistics

by Joe Barber ON 24 December 2011

This article first appeared in the November 2010 issue of Marketing magazine.

I enjoy hearing back from readers and receiving emails debating some of my commentary and others contributing some interesting viewpoints. By far the most common request, however, is for some mobile stats and facts to support a pitch, proposal or campaign brief. So here is the latest compilation of some pertinent facts and figures along with their source.

Before diving into a page of numbers, there are several important things to understand when reading, analysing and using statistics on mobile phone usage:

There are significant geographic differences in technology, functionality and overall consumer behaviour driven often by price and availability. This is most evident, for example, when looking at mobile internet statistics. I could show you stats reflecting that 75 percent of consumers use their mobile instead of a PC to search the internet. In Australia and the US that isn’t valid, but in Samoa and Fiji it is, because PC penetration rates are very low. Data is cheaper in the US than in Australia, which impacts online usage stats as does the success of mobile coupons in Vanuatu where MMS is not supported on most handsets. Take care to ensure stats you are relying on are relevant geographically.

Australia has a penetration rate exceeding the population when it comes to mobile devices. A stat like ‘only 30 percent of the consumers go online every day’ needs to be in context as, for example, 15 percent of the phones can’t go online, 15 percent only have basic WAP support and 10 percent don’t have data capabilities. So in reality the 30 percent is wrongly calculated, as it’s taking into account the entire mobile population instead of only the online capable and connected population. The most important example of this is when looking at the iPhone. It may only be a relatively small percentage of the overall mobile population in Australia, but in many of our campaigns it has represented anywhere from 30 percent to 60 percent of the respondents. Don’t take all stats on face value, as they may be misleading based on source data, sample space and what’s being used as the baseline.

Terminology can vary, with the most obvious being MMS, which is also referred to as PXT messages, picture messages, media enhanced SMS and even multimedia text! The less obvious surrounds the use of the words ‘mobile application’. Many of the leading mobile applications are in fact mobile websites with on-device shortcuts. Care needs to be taken when using stats relating to mobile applications to ensure you understand if it is a true on-device application, which means it’s downloaded and installed or in fact a mobile application website.

The sources

There are some excellent sources of statistics that have been drawn upon in this article. Many are US- or UK-based reports, however, and, as mentioned, need to be ‘regionalised’ in terms of how they apply locally. An excellent source of deep research is Paul Budde Communications here in Australia and especially his latest report ‘Australia – Mobile Communications – Statistics and Forecasts’ released in September 2010 and ‘Australia – Mobile Broadband Market’ released in July 2010. While not specific to mobile marketing the depth and quality of content is well worth the read.

Other great online sources include:

Subscribers

Mobile penetration rates are now exceeding 110 percent and will continue to grow, especially with many consumers now having a work and a private mobile service. Add to that additional services for iPad and we could be seeing a penetration rate of over 120 percent by the end of 2011.

Even more interesting is that the median device age is now less than three years old. What this means for marketers is that there is now a greater chance of reaching your entire target audience using mobile over PC or letterbox pamphlets. And, of course, mobile is direct (personal), immediate and relatively uncluttered by spam/junk mail. In addition, the use of advanced multimedia technologies like MMS delivering a more compelling consumer experience can now be adopted without fear of only reaching a small percentage of users.

With around seven million subscribers, VHA (Vodafone Hutchison Australia) is still deep in the process of integrating the operations of 3 and Vodafone following the ‘merger’, but is expected, in 2011, to start growing its market share with some aggressive activities. Telstra still leads with 10 million subscribers followed by Optus on eight million.

The most important take-away from these figures: make sure your mobile partner is telco agnostic, as your target audience will be spread across all networks, so a focus on a single telco will deliver below average results.

Handsets

Nokia still dominates the handset market with around 40 percent market share. This domination is predominantly at the low end of the market, however, with the ‘iPhenomenon’ seeing vendors like HTC and Apple dominate the sophisticated consumer. BlackBerry still maintains an executive niche, but is being rapidly eroded by the iPhone and Android devices. According to Australian Mobile Telecommunications Authority, by the middle of this year there were nearly 4.5 million 3G handsets. IDC says that over 48 percent of handsets are now smartphones with four million shipped in 2009 alone and, according to Frost and Sullivan, 62 percent of all mobile phones will be smartphones by 2015.

These stats highlight how you need to appreciate that any target consumer likely to respond and engage in a mobile execution will potentially be on a 3G connection with a smartphone, and that mix could be spread from iPhone to HTC with a sprinkle of Nokia and BlackBerry and maybe some LG. Branded content, including mobile websites, needs to be created to suit all these devices: some landscape format some portrait, no Flash, touch screen with and without stylus support and images from 256K to 16 million colours. When delivering MMS or mobile websites, make sure your mobile partner can leverage a device database and transcode or convert content to suit specific handsets to ensure the best experience per consumer. A one-size-fits-all strategy will not work!

Over the last 20 MMS campaigns run by Third Screen Media, the iPhone has ranged from 30 percent to 60 percent of the devices in use. Consumer coupon and loyalty executions tend to see high rates of iPhones, which, despite an overall relatively small market share, dominate among consumers likely to engage and participate in mobile initiatives. Another handset dominating among participants of mobile campaigns is the HTC/Android.

Mobile data

According to Ericsson, mobile data first exceeded voice traffic back in December 2009 and continues to grow exponentially. Data rates, while continuing to drop, are still high. Unlike fixed line, mobile broadband has a capacity limit constrained by available spectrum. In the UK, for example, in September this year, unlimited mobile broadband data plans ended and in some countries like Japan data rates are now increasing. In Australia we have a long way to go, but the important part of this fact is to ensure all mobile multimedia services (MMS and mobile websites) are optimised for size – don’t rely on the handset to resize images and videos etc. Minimise bandwidth of the communication and it will download faster, cost less and provide a better result for the consumer and the brand!

Mary Meeker of Morgan Stanley says that the world is currently in the midst of the fifth major technology cycle of the past half century. The first was in the 1960s with mainframes, then there was the mini-computer of the 1970s and the desktop internet era of the 1980s. She states that the current cycle is the era of the mobile internet. She predicts that within the next five years: “More users will connect to the internet over mobile devices than desktop PCs.”

According to Pew Research, 33 percent of mobile phone owners (in the US) now access news on their mobile. In a Sensis survey, nearly 50 percent of consumers under 30 use their mobile for internet access. Interestingly, there are still 25 percent of respondents over 40 using their mobile. These usage rates are expected to grow faster than ageing to the levels exceeding 80 percent for under 50-year-olds by 2015, in line with the Morgan Stanley report.

These figures, along with the smartphone growth, provide startling evidence of a new thinking needed for digital executions. Websites littered with Flash and bandwidth sucking multimedia objects will alienate upwards of 50 percent of a site’s target audience. Tools like modapt will be standard kit for agencies turning websites into mobile friendly environments for the consumer. These high bandwidth websites are still critical in delivering entertaining, engaging and rich experiences for those consumers on PCs wishing to feast on content. But they need to be linked and synchronised with a mobile version delivering the snack for mobile users – an ever-increasing challenge with continued diversity in mobile formats and specifications.

Social networking

The value and benefit of an integrated campaign leveraging social networking platforms is rapidly becoming a standard component of every online strategy. The ability to leverage these mediums can change a campaign from mediocre to spectacular in respect of consumer engagement. A Computerworld report predicts that by 2012 there will be nearly one billion mobile social networking users on such platforms as Twitter, MySpace and Facebook.

Bringing these mediums not only into the digital strategy, but also within the realm of mobile can deliver results far exceeding the ROI in any other format. The power of social networking platforms can almost be validated by the number of organisations now employing specialist resources focused entirely on working the medium and maintaining currency of information, as well as it being a new customer touch point delivering significant savings and benefits over call centres, mail outs and sometimes ageing web content. According to a recent employment study in the US, the demand for specialist social networking positions far exceeded any other technology role in the first half of 2010.

According to Cone Inc, 53 percent of online (including mobile) users in the US believe brands should have a social networking presence, with over 30 percent communicating with brands via the medium.

Mobile budgets

The average mobile marketing budget is growing by 26 percent per annum according to a survey by the Mobile Marketing Association. With marketing budgets down by as much as 70 percent in 2009, mobile marketing budgets grew at a rate of 26 percent representing a US spend of $1.7 billion in 2009 and on track to achieve almost $3 billion by the end of 2010. In Australia, the adoption of the mobile channel and allocated budgets are on average 50 percent lower than in the UK and US. Despite being a leader at the consumer level with the adoption of mobile, the appetite from the consumers is in many regards still being untapped.

Mobile ticketing

A report published by Juniper Research on mobile ticketing stated that some 15 billion mobile tickets will be in use by 2014. And that’s only the beginning of an industry that’s poised for significant growth, according to Juniper. With significant steps forward in scanning devices, UMD here in Australia predicts that the majority of major venues will be able to support mobile ticketing using standard access control systems by the end of 2011.

UMD further states that the new technology with which it is working includes the ability to read plain text message tickets as well as MMS barcodes and even two-dimensional codes like QR. Many consumer sectors are starting to see the benefits in mobile ticketing in being able to communicate prior to events, send reminders, upsell and then engage in post-event interaction with the ticket holder, selling merchandise and promoting the next event – a level of contact with a customer that promoters and venues have never before been able to achieve.

Not surprisingly the transport segment has led the way with many airlines around the world now supporting mobile ticketing in some form. Add to that train tickets in Europe and bus tickets in Canada and we are set to see mobile ticketing rapidly becoming mainstream, especially with the integration of scanning and image technology in standard devices; venues no longer need to buy or rent special devices to support mobile.

Coupons, vouchers and loyalty

A survey conducted by miBuys reflected some interesting trends in the acceptance of mobile coupons and vouchers. It’s important to appreciate that its survey was in many regards self-selecting and only polled females. Here are its findings, however (which tend to be support by many other surveys):

85 percent use the mobile internet (internet) almost daily
70 percent expect their mobile internet usage to increase in the future
84 percent have noticed mobile advertising
57 percent have clicked on mobile advertising
67 percent are interested in receiving mobile coupons or vouchers
93 percent are always on the lookout for bargains, and
93 percent like being up-to-date with new technology.

IHOP in the US explored mobile coupons and quickly achieved a 10 percent redemption rate delivering an ROI far exceeding any other initiative. Over the course of the six-week campaign, Sprite sent 4531 coupons to mobile phones with 1279 redeemed against the free bottle of Sprite, giving a redemption rate of 28 percent. The use of MMS for coupons and vouchers appears to achieve between 35 percent and 200 percent higher redemption rates with a well-worded two- or three-part SMS at least doubling the normal impact of a short 160-character SMS.

According to Sydney-based mobile loyalty company Centryc, the use of mobile and MMS for retail loyalty has the ability to reduce communications costs with members by upwards of 70 percent, while improving interaction and conversion by over 300 percent, as compared to traditional card-based mail systems. The immediacy and ‘brand in the hand’ features of mobile make it the perfect loyalty platform, especially when integrated with POS (point of sale) and CRM (customer relationship management) systems.

There is a wealth of statistics in the market – often complicated due to the sample space of the audience. Surveying 200 people in a regional seaside town should not be used to extrapolate the trends of a nation. In addition, many surveys are conducted online, thereby also self-selecting the results and skewing the data. Having said that, there is a wealth of sophisticated and experienced research firms now adopting mobile as a focused channel. If you need stats or facts for a particular brief or for a specific client, then sites like www.mobilemarketer.com are an excellent start; or drop me an email and I can supply what I have or point you in the right direction. But, as with all stats, look into how they were gathered, sample space size, geography and all the bias within the process.

Homepage image courtesy of SLO Country Bicycle Coalition, via Flickr

Dont shoot the messenger

by Marketing ON 11 February 2010

One benefit of ticking over a new year (beyond the chance to make a heap of resolutions which invariably are abandoned before February!) is a chance to reflect on the previous year – what happened, what we learned, what points of view different people had on particular hot topics and so on. With the continuing momentum around digital marketing, 2009 was in many ways a year for genuinely ‘new’ news.

However, in many ways 2009 was also a bit of a groundhog day, in particular when it came to criticism of market research and the accused ‘overuse’ of it. Every few years the same old points of view get wheeled out… it kills good ideas’, ‘it takes too long’, ‘its too expensive’, ‘consumers can’t evaluate creative’, ‘we should rely on our gut more’ and so on.

Typically these views are offered by ad agencies or sometimes clients – maybe the research isn’t telling them what they want to hear, an idea they were keen on might not have resonated with respondents, or maybe they’ve been exposed to poor quality research or the inappropriate use of particular approaches.

Sure, I’m a researcher at heart so I’m going to be a little biased, but I wanted to use my blog to respond to a couple of the points raised.

Firstly, lets start with the fundamental role research plays in the marketing cycle. People have different views on what this is, but I always see it as ‘reducing risk’ – marketers can be responsible for multi-million dollar decisions and a researcher’s role is to minimise any risk in the business decision through evidence-based advice.

Which brings me onto the first criticism of research, ‘its too expensive.’ Consider what a typical TV campaign may cost – say $1m would be a reasonable average for a typical major brand or product campaign. Launching such a campaign having not researched it properly beforehand would be like playing roulette with shareholder money. A robust pre-test picks up any issues with a campaign prior to launch and can offer improvements to both the execution and media plan to ensure the campaign is as effective as possible. Sometimes it might mean going back to the drawing board but it would’ve saved the company a million bucks and the potential fallout from a bad campaign. Not bad considering a pre-test would typically cost less than 5% of the media bill. Research should be considered an investment in optimising the campaign rather than an expensive gatekeeping process.

A second argument is that research ‘kills good ideas’. A good idea, a good campaign, will survive any well structured research process. The issue is that it sometimes kills the ideas that the marketing team likes. The ideas that people have slaved away on for weeks, months or even years. You can understand the hurt and rejection this might create – believe me, we sympathise – but ultimately the idea needs to resonate amongst the target audience for it to be deemed successful. I’ve seen ads win awards from the advertising industry, yet when you look at the tracking data, they do absolutely nothing for the brand. What is more important?

A third argument is that research is ‘not predictive’ of what happens in the real world. In some cases, this might be true – but that’s because the wrong approach or technique is being used. A couple of quick focus groups is not a reliable prediction of how an entire population will react or behave, but that is not what qualitative research should be used for. Researching new product launches, pre-testing of campaigns and political polling are just a few examples of how predictive research can and should be. As an example, we’re able to predict the exact sales volumes and profitability of new product launches from a few simple questions before they enter the market, to within an accuracy of +/- 5% in most cases. We’re even able to model the effect of word of mouth from social media campaigns on sales volumes. If this research is not predictive of what happens in the real world, show me a better approach!

Research shouldn’t be just considered as a stop-go process, rather a process of improvement and refinement. Advertisers and marketers can learn a lot from the insights derived out of testing and build these learnings into their knowledge bank.

One thought I would subscribe to though is that research should not be used as the sole source for any decision. It should be considered a piece of evidence to help inform a decision; a piece of the puzzle that a skilled marketer uses to inform campaign development. Rejecting research is rejecting the voice of the consumer – do so at own risk.