Listening to APM Marketplace discuss the announcement of the new Amazon Freerive service that’s teamed up with IMDB, they talked about the value to Amazon and the content providers through ad support. Trust us, this has nothing to do with ad dollars coming in, but more about acquiring more data about potential Amazon shoppers who may not be buying from Amazon now.
Amazon spends a lot of money with Google for ads now to drive sales, and what Freedive does is gives them yet another way to refine data about people who aren’t in their ecosystem due to cost. Amazon Prime isn’t for everyone. And there is a large part of America that can’t afford Netflix, Hulu, and all the other streaming services, yet still have a cell phone. Netflix has partnered with T-Mobile to offer free Netflix to it’s subscribers, and with the impending merger of T-Mobile with Sprint, Amazon may have to renegotiate wireless partners – Kindles used to be connected via Sprint but are now with AT&T and Prime can be bundled with Sprint Cell service. It’s starting to get messy.
But, the fact remains, the number one advertiser on Freedive will probably be Amazon, which already sells ads on their platform to manufacturers and retailers- and may bundle in ads on Freedive. Ultimately, Amazon still understands that ad supported content has value- especially when driven by digitally connected devices. Freedive is the future of broadcast television- with consumer level targeting of ads, with instant feedback. The real question is will they allow you to skip an ad to replace it with one you are interested in? That’s the holy grail of targeted ad platforms.
Amazon understands that while subscriptions are great for somethings, after a while, your subscriptions will start to show up on your credit report at the rate we’re going. You subscribe to software like Adobe Creative Suite or Microsoft Office to work, you subscribe to an ISP to provide the data, you subscribe to Netflix for movies, Prime for shopping, a wireless company for cell service (note- 5G could kill off ISPs) Dollar Shave Club for razor blades, Blue Apron for meals, the list goes on.
At some point, consumers can only bear so many monthly bills outside of rent/mortgage, utilities, insurance, transportation expenses etc.
Ad supported media may be making a comeback. Freedive isn’t the first and won’t be the last. At some point, Facebook may suffer some rejection by users who aren’t being compensated for their content on the platform. And while Netflix is a subscription- an ad supported version may not be far off.
That this is teamed up with IMDB and not clearly an Amazon product is another stroke of smarts. IMDB is an incredible viable and valuable online community where the contributors share knowledge willingly without compensation. This service only rewards them and helps support their site. One day, Wikipedia may have to look at this model as well.
When Amazon’s CEO Jeff Bezos bought the Washington Post and offered subscriptions for $100 a year (and a discount to Prime Members), it should have been viewed as just another way to connect consumers with the retail giant and providing data for targeting. At half the price of the NY Times, the difference becomes that the owners of the NY Times don’t have a mega-advertiser subsidizing them. Look for Amazon/Bezos to expand their newspaper holdings to gain eyeballs for Amazon ads.
Ad revenue might be driving the bottom line for Facebook and Alphabet for the folks on Wall Street- but, the real goldmine is and always be the connection of data with an individual consumer for targeting. Freedive will do just fine for Amazon, even if the ad revenue never amounts to much. Increased sales for nominal extra costs are a good thing for Amazon.
As Google continues it’s march into personalization of search results, before long, online commerce sites will be paying for access to your social graph to predict what items show up on your landing page. It’s not far off from what Amazon does by studying your past purchases, comparing them with what others like you have bought and making recommendations. But, sure, we’re talking about online digital items, not physical stores, where moving the atoms around for a box of laundry detergent is a whole other matter right? Wrong.
Google is even trying to map the interiors of buildings now. Not only will they know how to direct you to the bathroom, but, they’ll be able to guide you to the box of Tide in aisle 9. Combine a few other retail technologies, like the electronic price/item labels on the gondola shelving and you could have the shelf label glow a special color as you near the vast selection of detergents.
And the funny thing is, this kind of tech doesn’t require Google glass, or massive changes in the way the systems are built- it just requires the graph to be allowed to grow. Some of this social engineering may make our lives easier, but, it may also start insulating us from having to choose, to make informed intelligent decisions. Others may think it will liberate us from the mundane tasks so as to go on to bigger and better ideas and move humanity to a higher level.
Another aspect of this connected world, might be a whole new world of point of sale advertising- or, comparison ads. The basics are already there on the shelf- if you look at a cost per ounce price for comparison, but imagine being given an option to review a competitors paid last ditch pitch on why you should convert brands? You’d get paid a small amount of store credit, to view the comparison and then choose. If you choose the competitors brand- it would be added to your graph, and next time, you’d be asked, last time you switched from Tide to Era, did you prefer the Era? And so your graph would continue to grow.
Big data may drive a lot of the suggestions, but in the end, it’s just consumers voting with their pocketbooks like they’ve always done, that will drive markets. Of course, when everyone’s connected, all the time, and suggesting and rating, and we have perfect access, the cycle of success or fail may be shortened.
Going back to the old “Pepsi Challenge”- where more people picked Pepsi when blind taste tests were done, sometimes consumers stick with a brand for purely emotional attachment no matter what. If you want to win in the store of the future, maybe the key is understanding how to build emotional attachment points into your product/brand/service that can’t be overrun by the data revolution.
In the Internet radio wars we have newcomer, the Swedish Spotify vs. the US based Pandora. Usually, the first mover has the advantage, but in the incredibly fickle world of music powered by technology, being the new kid on the block may give you an advantage to roll out a different flavor faster.
If you are a Spotify Free user, you have probably heard the ads about how the company rolled out free mobile radio similar to Pandora where users create stations based on artists and/or songs.
Our latest app features free radio – the only radio where you can save the songs you love. Now you can discover, save and enjoy an unlimited amount of music on the go.
Here’s how it works
Create stations based on any song, artist, album or playlist, and let Spotify bring you one great song after another.
When you like a song, give it a thumbs up and it’ll be saved to a Spotify playlist on your desktop. So you can listen whenever you like.
Get busy with your thumbs
By liking songs, you’ll help to personalize your stations – meaning they’ll play more of the music you want to hear.
Premium users can enjoy a premium radio experience that’s ad-free. Free users, you’ll hear occasional ad-breaks just like you do on your desktop.
So get the free app now to enjoy mobile radio – Spotify-style!
Free radio in all its glory
Free radio is powered by the entire Spotify catalog, the biggest of its kind.
Unlimited songs and stations – listen forever!
Like a song? Save it to your Spotify playlists with a thumbs up.
Great music choices from our shiny new recommendation engine.
Taking a quick look at both of them, they have a few more differences than similarities. Spotify has the ability for users to pick and choose the artists and songs they want to listen to on demand for free on computers ($9.99/month on mobile devices), whereas Pandora does not. With Spotify’s new radio function, which works similar to Pandora, users can “star” or “thumbs up” songs to save to them on the Spotify app and listen to them whenever they want. It’s likely that this will make Spotify reign supreme in the world of internet radio. Where Pandora users are used to constantly giving thumbs up or down to songs, Spotify users can simply thumbs up a song then listen to it whenever they want.
Beyond features, Spotify appears to have much better social media integration than Pandora, especially with Facebook. In fact, Facebook integration was an obvious focus for the Swedish company; users with the Spotify app enabled have their activity displayed on the timeline and can share songs and playlists. It should be noted that Spotify forces users to sign up through their Facebook account whereas Pandora does not, but this quirk is made up for by the flawless social media integration.
From our standpoint Spotify has got everything that Pandora has and more, even at the free level. The only thing that Pandora had over Spotify was their mastery of internet radio. Now that Spotify Radio launched on mobile, it’s going to force Pandora to react.
Considering the ultimate goal is to be able to deliver highly targeted ads or get paid to be the end users only music source, none of this is good for old fashioned terrestrial radio which failed in every way to react and adjust to the changes the Internet has forced on them. It will be interesting if at some point, Pandora and Spotify will find a standard for selling ads so that local businesses can target their most likely customers.
Some universal facts in the new marketing landscape:
There is no more mass media- you can’t just buy any one media and hope to reach a very big audience (unless you buy Superbowl spots- and even then…)
Even if you can reach all of your current and potential customers- they are still being barraged with messages- making yours stand out is increasingly difficult.
And then, factor in the age old rules-
People do business with people they know,
It costs way more to get a new customer than to continue to sell to an existing one.
Put all the above factors together- and all of a sudden, handwritten notes start making sense. The “Thank You” note, long a staple of non-profit fundraisers- and boutique clothiers- is now becoming a very effective tool to implement in any business.
Here is a bit of a story from American Public Radio’s Marketplace show:
Then, a couple weeks later they both got letters in the mail from the saleswoman who’d helped them. They were thank you notes.
Siewert: It was a fully hand written note, referencing the exact bag we purchased. And on my note, she even had a nice reference to our alma mater.
Turns out they’d gone to the same school. And, I’ll admit the purse Sarah bought wasn’t exactly cheap. It was Marc Jacobs, about $400. But it’s not just pricey department stores that are beefing up their manners. When the recession hit, JCPenney started a customer service program called GREAT. It’s an acronym for salespeople: Greet. Respect. Engage. Assist. And Thank. And other retailers are following suit.
Brett Brohl: I’ve written, at least 2,000 thank yous just in the last 12 months.
Brett Brohl owns Scrubadoo.com. He sells medical scrubs. You know, those pastel-colored outfits, doctors and nurses wear. Brohl says he hand writes a thank you note for every single customer. Scrubadoo is a new company, and Brohl says there are a lot of websites out there selling the exact same products he does.
Brett Brohl: If you Google the word “scrubs,” we’re not on the front page, we’re not on the second page. And just like every other industry right now, competition’s tough and with less people buying, it’s even tougher.
Brohl says, a new company like his can’t afford major marketing like TV commercials. Instead, he says, he’s counting on thank you notes to help Scrubadoo stand out. So is this the beginning of a new trend of exemplary customer service?
Nancy Koehn is a retail historian, at Harvard. She says for smart businesses it is.
Nancy Koehn: We’re returning to civility, courtesy and a way of actually honoring customers that has seemed far too absent, I think, for the last 20 years.
Koehn says the role of the salesperson has changed a lot over the decades. Before the recession, a salesperson’s job had morphed into managing transactions: Bagging groceries, dispensing coffee, ringing up a sale. She says the more we’ve absorbed technology, like self-service check-out at the grocery store, the more retail businesses have reduced service.
Now, the role of the salesperson is changing again. I’m at a perfume counter at Saks Fifth Avenue with James McLaughlin. He works for a fragrance company called Jo Malone. McLaughlin says its sales people have been sending thank you notes for years. They’re scented. But now, he says the company spends 20 percent more time, on expressing gratitude — everything from hand and arm massages to wine tastings for customers.
James McLaughlin: We oftentimes will liken the experience as dating. You have a really great first date, and then the person calls you three months later when there’s a sale going on and says, “How about a second date?” Why would they bother? You didn’t keep in touch.
But just saying “Thank you” isn’t really enough- you need to build a customer relationship management system- one that has all their quirks, likes, dislikes- size etc. in it. Good clothing salespeople used to keep little 3×5 cards with all the data on their clientele- as did smart hair stylists- and even a few bar keeps.
The more you know about your customers- the better able you are to solve their problems and be a trusted part of their business.
Luckily, today technology offers us all kinds of tools to do this. First we had Personal Information Managers- with software like ACT and Goldmine. Then they became enterprise level- where all the data was stored centrally. SAP, Salesforce are some of the better known systems. Of course, there are also “free” Open Source alternatives- like SugarCRM and its stripped down fork vTigerCRM.
I included the intro to ACT video to introduce you to the concept of CRM systems- not as an endorsement of one over the other.
Having a lot of social media contacts might be nice- but it’s what you do with them that matters. We have lots of information- it’s how we utilize it that counts these days. Integrate a CRM tool with your website- and you have a lead collection system.
There are plenty of options out there- we’ve been using vTigerCRM at The Next Wave. We consider it, along with internal wikis, part of our toolbox for building our own media channel- and of knowing everything there is to know about our clients, to strengthen the relationships.
Sending a handwritten note is good, but making sure to follow up is even more important. Utilizing the high tech CRM systems to keep track of all our efforts gives us the best chance of keeping doing business with our existing clients- and in prospecting for new ones.
So, before you spend $3.5 million on a Superbowl spot- think about how you can build a CRM system to keep close to the clients you already have.
If there is one thing about the new media landscape that hurts the most, it’s been the demise of local radio. When done well, it’s an art form. When done by corporations- it’s a failure of magnanimous proportions.
If you listen to the gurus of our economic destiny- you’ll keep hearing that small business is our real economic engine, yet- except for the Internet and Google with their adwords, big media has pushed small business away for years.
What brought this to mind was the very first example in “The Art of Client Service” by Robert Solomon. It’s in the introduction- not even one of the “58 Things every advertising and marketing professional should know” that’s made the book a classic in the business. He describes the handing off of a client from one rep to another. In the umpteen corporate “reorganizations” and new “Sales Managers” grand plans to make Clear Channel somehow better- they forgot about the customer. The one who has a relationship- face to face with the people who buy their product.
It’s not just the radio station, the newspaper does the same thing as do the television stations and the cable companies. Some genius forgets that business is built with interpersonal relationships- and that you can’t change them without the consent of both parties. Good relationships aren’t arranged marriages, but the result of building trust over time.
Your bottom line will only be as good as your front line- the relationship between your company and your customers isn’t created in a board meeting or at corporate HQ, it’s forged by your sales people who press the flesh and write the orders and bag the groceries.
It’s in how you deliver your product or service, with a personal touch. Small business still understands- big business, doesn’t.
Just watched this video about the future of magazines via e-readers. Nothing mentioned about newspapers (who need a new metaphor for presentation of content more than do magazines which have evolved over time).
The video really showcases an elegant interface, but it’s still a very 1 way mechanism- with no discussion of feedback, learning about the user, or delivering custom ad feeds, very much a designers solution as opposed to an advertising based/business model based solution:
The concept aims to capture the essence of magazine reading, which people have been enjoying for decades: an engaging and unique reading experience in which high-quality writing and stunning imagery build up immersive stories.
The concept uses the power of digital media to create a rich and meaningful experience, while maintaining the relaxed and curated features of printed magazines. It has been designed for a world in which interactivity, abundant information and unlimited options could be perceived as intrusive and overwhelming.
The real value is being able to deliver custom ads, with feedback to advertisers- do you like this ad, this product, do you want to learn more, or you want to buy? Will the content be a pure cash buy for the user, or will advertising still support it? And best of all, we’ll finally know who is reading the ads.
Remember, without the need to print- and distribute, the costs for content producers drop considerably. However, the cost of getting readers willing to pay- that’s another matter. While we may solve the hardware issue, solving the content value equation- and the amount of intrusion of advertising is a much bigger problem.
What will be most critical is a single publishing standard- so that one e-reader can read any content and advertisers can reach all readers based on your personal preferences. The only other remaining challenge is getting enough of these readers out all at once. It will have to be fast for publishers to transition smoothly. With magazines and newspapers dropping like flies, maybe it’s time for a national e-reader initiative as part of a green tech movement. Every newspaper, every magazine, should consider ending printed publications by banding together and delivering an e-reader as part of the subscription cost.
The faster we move to digital print, the faster we move to better, more trackable advertising.