Digital Solid: Marketing Technology ROI

Does giving away your book, ala DRM-free music, make business sense?

When avant-garde rock band Radiohead posted their latest album online, they invited fans to pay whatever price they thought was appropriate — or even pay nothing at all. More recently, bluesy Brit Joss Stone went on record as saying she thought “piracy” of her music was just dandy. She implies that the freely shared music is growing box office sales of her live shows. These and other examples from the recording industry suggest a business model where your chief intellectual product can be given away — or shared at a huge discount — to the overall benefit of your bottom line. One could even go so far as suggest that digital rights management (DRM) protection does more economic harm than good.

Okay, but does this model hold water if you’re a niche business writer, speaker and consultant?

My blogging friend Kevin Hillstrom reports that it seems to, if viewed holistically. And especially since his book is called Multichannel Secrets, you’d better believe Kevin views things holistically!

Joss Stone more or less admitted in her interview that, taken as a single tactic (my word, not hers), giving away music helps create buzz. It doesn’t help pay the bills. But this buzz is supporting her live shows. She is, in essence, a multi-channel business, and one channel is benefiting from the loss-leader status of the other.

Similarly, Kevin — who is the president of MineThatData — mentions in his blog that his pre-release book giveaway was not a profitable move. He reports at one point that he gave away twice as many books as he sold. But he emphasizes that as a “‘micro-channel’ strategy to running my business,” the giveaway concept makes good economic sense.

If you’re a self-publisher, you’ve probably already considered the strategy of giving out free advance copies. But Kevin can still help you, with his well-framed case for emulating Radiohead. Rock on, Kevin!

2 comments June 27th, 2008

Quantifying community standards one Google search at a time

A Florida lawyer has found a novel use for search engine data in presenting a court case. Defending his client from obscenity charges, Lawrence Walters seeks to show that the “community standards” in Pensacola aren’t as lofty as some might expect. The New York Times lays out his defense tactic in “What’s Obscene? Google could have an answer“:

In the trial of a pornographic Web site operator, the defense plans to show that residents of Pensacola are more likely to use Google to search for terms like “orgy” than for “apple pie” or “watermelon.” The publicly accessible data is vague in that it does not specify how many people are searching for the terms, just their relative popularity over time. [Walters] is arguing that the evidence is sufficient to demonstrate that interest in the sexual subjects exceeds that of more mainstream topics — and that by extension, the sexual material distributed by his client is not outside the norm.

I’m reminded of an old Tom T. Hall song about another southern community. In “Harper Valley PTA,” a single mother is accused by her school group of being unfit to raise her middle school daughter. She “wears tight skirts,” and has a drink or two in public — with men, no less! The song has our protagonist defending herself:

Well, Mr. Harper couldn’t be here ’cause he stayed too long at Kelly’s Bar again
And if you smell Shirley Thompson’s breath, you’ll find she’s had a little nip of gin
Then you have the nerve to tell me you think that as a mother I’m not fit
Well, this is just a little Peyton Place and you’re all Harper Valley hypocrites

Of course the song ends with her accusers chastened and her “fitness” as a mother confirmed. Relatively speaking, of course, taking into account the prevailing Harper Valley community standards.

It will be interesting to see if a more high-tech version of this shaming defense wins the case. I have no affection for the industry that’s being defended, but if a jury of non-technologists can find the data presented reasonable and compelling, it will be a sign of just how quickly “John Q. Public” is coming around to viewing behavioral data as a yardstick of social attitudes.

Add comment June 26th, 2008

True networked leadership builds communities that change the world

There is change afoot at Change.org. This is a blogging site / portal that I’ve watched with great interest since I first decided to research the health of Community in this digital era. Change.org has a bold name and a mission to match. That’s a lot of pressure. So a few weeks ago, the organization announced the hiring of a new associate editor, Joshua Levy.

Levy will lead — for lack of a better word — dozens of bloggers who can pool their knowledge and opinions to inspire and facilitate change. Says a Wired piece on the hire (the link is immediately above), “The project [asks] a large number of busy people to contribute small chunks of time to volunteer — just as Wikipedia does.” I found the announcement heartening because it implied a new type of leadership.

That announcement coincided with Barack Obama achieving presumptive Democratic Presidential nominee status, a development that some say signals the death of top-down leadership in national political campaigns. Senator Obama’s campaign followed a horizontal, networked organization, while Senator Clinton’s used a more traditional hierarchical leadership style.

Both developments — as signs of a greater tend — give me hope.

Networked Leadership

Call me an optimist. When I was in my 20s, one of my favorite magazines was Utne Reader. Often called the Reader’s Digest of the alternative press, the Utne not only reported on positive social change but devoted precious resources to encouraging it. Significantly, it reported on the digital revolution, but also took a leadership position in exploring how networks can be used to revolutionize both print and activism. The publication’s prized, four-character (UTNE.com) domain name length is evidence of their early and enthusiastic arrival to the web.

The Utne also recognized the problems that Robert Putnam wrote about in Bowling Alone (the title comes from his observation that nearly every form of civic organization has fallen in membership and participation — whereas more people are bowling than 40 years ago, fewer are bowling in leagues).

The magazine’s response was to encourage neighborhood salons, constructed around the then-burgeoning communitarian movement. Utne realized that our nation’s social capital was shrinking, and attempted a crude (and alas, unsustainable) mail-and-fax infrastructure to support these grassroots salons.

I’m an optimist, but experience has taught me to temper it with realism.

Take the experience of watching the Utne-driven salon movement wither and die. Of course, this was before everyone and his brother seems to have clamored online. Perhaps a “real” network will provide the instant connections (not hindered by the U.S. Postal Mail) that were lacking two decades ago. Evidence of this is the vitality of sites like Change.org, and other online social networks that strive to do more with its membership than exchange banalities and wage Mob Warfare.

Exploring The Social Power of Networks

Earlier this month The Personal Democracy Forum (PDF) held its annual conference. Speakers debated, described and otherwise explored an aspect of a community voice that the PDF’s manifesto asserts is growing. Here is an excerpt of that manifesto (emphasis is at the end is mine):

Democracy in America is changing.

A new force, rooted in new tools and practices built on and around the Internet, is rising alongside the old system of capital-intensive broadcast politics.

Today, for almost no money, anyone can be a reporter, a community organizer, an ad-maker, a publisher, a money-raiser, or a leader.

If what they have to say is compelling, it will spread.

The cost of finding like-minded souls, banding together, and speaking to the powerful has dropped to almost zero.

Networked voices are reviving the civic conversation.

By some measures PDF is correct. New York Times editorial writer Nicholas Kristof, in his opinion piece Saving the World in Study Hall, provides some impressive anecdotal evidence that there is hope for us in the Millennial generation (those who were born in the 1980s and ’90s). And I do not doubt that there are individuals and small groups doing amazing things to make this world a better place.

But can this be “scaled?”

There’s a lot of work to be done, and my concern is online efforts are too little and too late.

Also, can this work be quantified, in the same, nearly irrefutable way that Bowling Alone quantified social capital’s depressing decline?

I’d welcome your thoughts.

In the meantime, I do think I have an answer for Bernard Sifry, father of PDF conference co-chair Micah Sifry. His parting question at the event: “How do we build leadership on the internet?” You find leaders who follow Lao Tzu’s advice in his famous Tao Te Ching:

The greatest leaders are never seen, their presence is never felt
Lesser rulers are loved and praised
Lesser still are hated, and obeyed through fear
And the least are despised and ignored

If you would lead people, trust them to do the right thing
When a leader accomplishes something using the tao
He steps back, moves on to something else
And lets the people praise themselves

1 comment June 25th, 2008

Why the debate about in-house SEM vs outsourced work clouds an important issue

This morning, MediaPost featured “The Great (And Completely Ridiculous) ‘In-house vs. Outsourced SEM’ Debate,” by Dave Pasternack (registration to MediaPost is required). The piece begins with Pasternack asserting that in his 10 years in the business, “I’ve never, not once, seen a search campaign created by an in-house team outperform one crafted by a competent SEM [search engine marketing] agency.”

I trust that what he says is his experience, although at least one other in the comments reports differing results. Also in the comments, David Berkowitz found some of Dave’s arguments to be as “spurious” as the premise itself (Hark! Do I hear you composing your own post on the subject, David?).

I’m letting that discussion continue without adding to the din.

But my opinion is that the debate itself — in-house versus outsourced SEM — clouds the true secret to optimum ROI: Working together, in-house and agency pros are more likely to get a campaign that really hits one out of the park.

No one understands the subject domain as well as those who live and breathe it. And successful SEM requires content that uses this knowledge. Customer-focused internal SEM pros can add a level of richness to an SEM campaign that no outside agency can match.

SEM Is More Similar Than Different Across Industries

So what’s the problem with most “pure-play” internal SEM work? It’s a question of experience. When someone is handling multiple campaigns for many different types of clients, the similarities and synergies become apparent. Knowledge has a way of “cross-pollinating” between campaigns and clients. That’s a huge advantage. Also, this level of activity forces a heightened level of process that is just too difficult to match in an internal campaign.

As with most black-and-white debates, this one distracts from the benefits of a middle ground.

In every industry, and in every business category, there are those brands that lead the way in SEM. For the majority of these market leaders, I would be shocked if there wasn’t a smart blend of internal and outsourced efforts and expertise at work.

Both sides of the desk have something superior to bring to an SEM campaign. I suggest we SEM agencies work harder to remember this, and to promote this important truth.

2 comments June 23rd, 2008

An unabashed plug for Americhip’s amazing paper engineering

I discovered Americhip 10 years ago. They helped me and other direct marketers to produce mail packages that really get results. The first pieces I used them for were mailings incorporating tiny sound chips. Example: Years ago my team was preparing a mailing series for a snow blower manufacturer. A mailing to potential dealers touted their line.

Avalanche In Sight and Sound

When the mailing was opened, you heard the sound of an avalanche and a call-to-action of stocking a line of snow blowers that were less likely let the dealer down when a big snowfall hits and there is a huge, urgent run on them. The mailing signed a ton of new dealers and helped cement our relationship with the client.

Since then I’ve found these folks are a reliable — and especially innovative — supplier of dimensional pieces. Here’s a video demonstrating their incredible paper engineering.

There is no “full disclosure statement” needed here, by the way. I actually haven’t used their services in a few years. But I continue to watch them, for whatever their next innovation will be.

In today’s fragmented, distracted marketing environment, I know that involving as many senses as possible in a promotion is a key to breaking through the clutter. Americhip has been a terrific resource for delivering this impact.

Add comment June 18th, 2008

Multi-touch screen tables interact with casino patrons

Since Jeff Han first presented multi-touch screen technology, there has been a great deal of speculation on which industry would be first to make use of it. The industry first to reap profits from another breakthrough technology — personal video players — was not surprising “adult entertainment.” But manipulating images on a cool glass monitor is hardly conducive to this, er, prurient interest. Allow another vice, or maybe two, to step in and fill the void.

Of course! Drinking. And eventually, gambling.

Thank you Mike Luedke, of Dinefly fame, for tipping me off to this extraordinary application of Microsoft Surface technology. As this report explains:

The six rectangular tables with built-in 30-inch flat screens using Microsoft Surface technology were installed in a lounge at the Rio All-Suite Hotel & Casino in Las Vegas, with custom applications built for Harrah’s.

A spokeswoman for Microsoft said the units sold for a base price of $10,000.

A program called Mixologists lets patrons play bartender by creating and ordering concoctions of whatever cocktails and mixers they click on. The system is able to remember users’ drink orders and, one day, may be able to offer customers the same drink at other Harrah’s locations, such as when they play a slot machine.

Another program lets users watch YouTube videos, either by searching or choosing from a list of popular videos. Harrah’s officials said they reached a licensing deal with YouTube on Wednesday.

The table also includes a program called Flirt, which lets customers sitting at any such table in the lounge see and chat with each other, take and e-mail pictures and even trade cell phone numbers.

Okay, so maybe there is a tie-in to prurient interests. Or at least hooking up. Regardless, this is a brilliant application from Harrah’s, a group that has already shown its mastery in customer relationship marketing.

I’ll be curious, when my parents next travel to Vegas, to see if these tables will suck them in. They are long-standing members of Harrah’s Club. I hope they do. I would love to see how data from interactions with these bar tables are used to further improve their experiences at the casinos and beyond.

Speaking of my parents, Have a great Father’s Day weekend, dad!

Add comment June 12th, 2008

Using GPS data to predict where your customers are clustering

Nearly two years ago I wrote a long missive about how the mobile marketing of tomorrow is beyond anything that you can imagine. It predicted a time when retailers such as Starbuck’s could have vending trucks in larger cities, which they could deploy instead of leasing expensive every-other-corner real estate.

Vending locations wouldn’t be fixed. Instead, I suggested that the following could happen:

• The retailer (say, Starbuck’s) could aggregate cell phone data about your movements, as well as everyone else’s who want the same services as you, and …
• Anticipate through statistical means where to locate itself to fulfill those needs, and …
• Alert you via your cell phone where they are in real time (e.g., “We’re two blocks away — care for your favorite beverage?”)

I didn’t expect this to happen overnight. In fact, two years was a pretty aggressive time line in my estimation.

Therefore, I’m a little giddy to see the first part of the process being mapped out and monetized. Check out the new Sense Networks product offering, for a peek into the future of retailing that factors in predictive modeling of where customers will be next.

Harvesting the low-hanging fruit, Sense Networks is focusing on helping find city nightlife hot-spots. Its site explains how this product, Citysense, works:

Citysense is an innovative mobile application for local nightlife discovery and social navigation, answering the question, “Where is everybody?”

Citysense shows the overall activity level of the city, top activity hotspots, and places with unexpectedly high activity, all in real-time. Then it links to Yelp and Google to show what venues are operating at those locations. Citysense is a free demonstration of the Macrosense platform that everyone can enjoy.

I see this as the beginning of a location-free bank branch or coffee shop. Exciting stuff!

4 comments June 9th, 2008

Infoweek and TechWeb launch strikingly familiar b-to-b portal

This week InformationWeek and its affiliated TechWeb introduced CreateYourNextCustomer.com, a b-to-b portal for their reportedly “13.3 million business technology buyers.”

I’ve signed up and looked over their downloads and other resources, and I have to say there appears to be some valuable material. The focus of the portal is to help marketing technology pros plan their campaigns and online media buys. This would happen, in part, by gaining access to their media partners’ planning tools.

Where have I seen that before?

Which brings up a little episode of deja vous. They tout a media planning widget, to “zoom in on the business technology marketing solutions you need.” This was of course designed independently of one of the projects that my team produced last year, but I have to say it’s uncanny the similarities!

Here’s a blurb in Yahoo Financial News on the site and its solution wizard (oh, wait — that’s what our creation is called!).

What are your thoughts on this portal? Will it serve a need? Or is it too blatant a sell-through device for their partners?

2 comments June 5th, 2008

The decline of legible handwriting

Although it might not be a harbinger of lost social capital, it is undeniably sad that typing away all day has made most of us strangers to our once-good handwriting. One of my favorite scholars on the subject of technology and society, danah boyd, blogged about this last year. And now her lament has been put into wonderful comic form, in the Tampa Tribune’s Blogjam:

Add comment June 3rd, 2008

June is Online Community Month

The headline says it all. On my blog, June is Online Community Month. It is so decreed. And mind you, by community, I don’t mean a particular type of web site, such as the myriad online “communities” described by forums, chat rooms and other real community metaphors. I mean real communities — that raise kids and pay taxes and send loved ones off to war — that are strengthened and propagated by online activity (maybe). In a phrase, I’m talking about computer mediated Community, with a capital C.

Friends vs. “Friends”

This may seem like splitting hairs, this online Communities versus communities business. But it is huge. It is as different a distinction as a friend is to a “friend” — one forged on Facebook (or some other social network) with the click of a mouse and the exchange of some level of web access.

My decision to devote a series of blog entries to the topic started in the Fall of last year. Ever the optimist, I had assumed that technology was the friend of community — as scary as it sometimes appears to parents of the young and keepers of the status quo. I was planning to research the topic to succinctly lay out of the facts to this view. Then I did some digging, and a lot of reading and discussing, and now I’m not so sure. Sometimes Chicken Little is right, and the sky really is falling.

I will be looking, in this U.S. election year, at political involvement online. And also the involvement of grassroots organizations. And even professional associations. I’ll be getting the help of experts where I can, and readers who are willing to provide their two cents.

Bowling Alone

I’ll also be helped by an extraordinary book that predates Web 2.0, but still has great value, from the perspective of recent history. It will also be used to fairly distribute blame, where blame is due, to technology other than modern, web-enabled networking. I’m talking about the book Bowling Alone, by Robert D. Putnam. The title comes from the phenomenon of an era that seems distant now, when we as a society bowled in leagues together, usually after work. The disintegration of this community-building ritual, along with others great and small, is exhaustively examined.

I’ll be sharing observations and statistics from the book throughout the month, as I look at this question: Has technology eroded our social fabric, or simply provided a new way to weave it?

I’ll start today with this factoid from the book — one that examines the communication technology that scared our parents the way the web does this generation’s. I’m talking about the technology that Newton Minow is 1961 called the “vast wasteland.” His famous speech used that term to describe the specific social decay that comes from a day of television:

When television is bad, nothing is worse. I invite you to sit down in front of your television set when your station goes on the air and stay there for a day without a book, magazine, newspaper, profit-and-loss sheet or rating book to distract you — and keep your eyes glued to that set until the station signs off. I can assure you that you will observe a vast wasteland.

The One-fingered Salute

Bowling Alone talks about the technology of television a lot, asking if there is evidence that a society glued behind a set is more prone to ignoring the niceties that keep a community civil. Below is one interesting finding that the author used to show that it does.

It compares two self-reported activities: Participating in altruistic community events and flipping the bird to passing motorists. Here is his chart, showing the reverse correlation between contributing to what he calls “social capital” and contributing to road rage. It shows a similar direct correlation between this anti-social activity and highly valuing television. Click for a larger view, fully-legible view. (Ignore the reference to “churchgoing” in the titleby the way. It refers to additional data not shown here. It was included to help those who wish to find the entire dataset in the book’s index.)

Optimists would say that these trend lines may be coincidental. Every generation has complained about the gradual coarsening of its citizens. Web-savvy optimists, such as myself, would also argue that television can degrade “connectedness” while more modern technology aids it. Keep reading this month for more perspectives on this question, to see if I am one such optimist.

Add comment June 2nd, 2008