Corporate Eye

...compare, compete, excel

Recommendations Are Still the Most Trusted Form of Advertisement

Recommendations Are Still the Most Trusted Form of Advertisement

In a new report by Nielsen that tracked advertising spending and effectiveness in the United States during the first quarter of 2011, 76% of consumer respondents indicated that recommendations from people they know are the most trusted form of advertisement. However, even the opinions of people that consumers don’t know are important. 49% of consumer respondents to the Nielsen survey indicated that they trust opinions published online by other consumers, including strangers.

What does this mean to businesses?

In simplest terms, you need to get people to use and then talk about your brand. The social web provides a perfect place to do this. By engaging with online influencers and your brand’s target audience through social media tools and websites, you can start conversations, join conversations, and guide conversations in the right direction. Not only should you encourage consumers to write reviews on your own website, but you should also ask them to do so on your Facebook page, on Twitter, and on local sites like Yelp.com, MerchantCircle.com, Epinions.com, or similar sites that are popular in the countries where you do business.

Consumers don’t always trust ads, but they trust other consumers who have real experiences with brands, products, and services. Take some time to connect with online influencers who have the attention of consumers in your brand’s target audience. Reach out to them and get on their radar screens. Ask them to try your product and review it online (be sure to follow regulations related to consumer endorsements — CFR Title 16 Section 255 in the United States).

Think of it this way. You can spend thousands or millions of dollars on advertising, or you can work on building word-of-mouth marketing related to your brand through consumer conversations and recommendations on the social web. The latter takes more time, but it costs a lot less and can be far more effective over time. In other words, ads are great for short-term results, but social media and online word-of-mouth marketing can benefit a brand for years to come.

What is your company doing to generate word-of-mouth marketing and consumer reviews for your brand online? Leave a comment and share your thoughts.

Image: stock.xchng

Importance of Media Studies: Next Steps in Social Media

‘Next Steps in Social Media’ was the title on the programme; the speaker (Dr Paul Coulton) had apparently wanted to call it something much more earthy…

This was a seminar organised by InfoLab21, and I don’t remember academia being so much fun. For example, Dr Coulton has a database full of tweets referencing the Royal Wedding (what insights is he planning to mine from those?) and showed us a number of slides tracking the flow of tweets and Facebook likes during the course of the X Factor.

Popular culture? Well, yes, but a long way from the popular perception of media studies. His analysis demonstrated, for example, that the volume and rate of tweeting about the X Factor was not reflected in behaviour and in the actual results: one candidate, although with a significant quantity of social approval, actually received fewer votes. However, even if social approval can’t be used to predict the result, business decisions can usefully be made—and no doubt are being made by the media moguls—by analysing the difference between the demographic using social media to express their views, and that which acts.

The seminar discussed theories of how social networks are designed to meet some of our basic psychological needs. For example:

  • Facebook supports the need to maintain close ties within a group by ‘grooming’ behaviour; small social interactions that recognise the ‘other’ as significant, and reassert the ties between individuals
  • Twitter supports our love of gossip: he said this; she did that; pass it on.

If you can understand something of human psychology, then you can see how our behaviour on social networks can be – and is being – manipulated into behaviours that can benefit someone else, such as a company. Often these behaviour manipulations are overt, or can easily be spotted with experience… if you do X, you’ll get Y and we’ll get Z.

But sometimes it is less clear to the individual. Without at least a superficial understanding of some psychological theories of reinforcement, for example, individuals may well remain ignorant of the extent to which they are being manipulated: such as by being rewarded with badges for repeated behaviours (for growing 5 different kinds of tree in Farmville, for example, or by returning repeatedly to check in at the same location to retain their mayoral position via FourSquare).

In another example, people may not be aware that they are training themselves into addictive behaviour by repeatedly checking for new email, or retweets; the intermittent reward is more satisfying than if they were rewarded every time.

Manipulation is of course true of offline activity as well, and for all that our children are categorised as digital natives, this kind of hidden persuasion online may remain hidden from them, just as it may be offline. My father tells of a colleague who educated his children to ask themselves ‘what’s the lie?’ every time they saw an advert. While I wouldn’t go this far, I do think that an understanding of how such things work is valuable.

And that, I think, should be at least part of the point of ‘media studies’.

The Beautification of CSR | Renewing CSR 1/3

To borrow from The Goons, “listeners who are listening…” will know that I get a little wound up about the phrase “ethical business”.  Ethics, I say, shouldn’t come into it because that’s a cultural issue and business is all about the technical management of money.

Hence my preference for sustainability: it simply widens the scope of technical accounting from money to other things.  Academically this is also a moral stance, but then so I guess is the expectation that a business should generate profits.

However, here’s a third strand of how business should address their impacts, courtesy of the National Trust and renowned professor of philosophy at the University of London, AC Grayling.

[Read more…] about The Beautification of CSR | Renewing CSR 1/3

Will 2015 Be the Year Display Advertising Investments Beat Search Advertising?

New research from eMarketer reveals a prediction that might surprise you. According to the eMarketer data analysis, display advertising investments are on track to surpass search advertising investments in 2015. Of course, that’s assuming that current investment trends stay the same over the next few years.

The chart below from eMarketer shows how display advertising and search advertising spending is expected to play out through 2014. You can see the gap closing as display advertising spending is expected to keep growing year over year while search advertising spending is expected to start flattening out after 2014.

eMarketer makes the point that more companies are investing in display advertising (particularly with the growth of online video display advertising) for brand-building rather than keeping those budget dollars in direct response search advertising. In fact, spending on brand-building online advertising efforts will grow faster than direct response online advertising over the next four years.

It’s great to see a greater focus on branding by companies, particularly as it relates to budget investments. A strong brand can weather many storms, so investing in brand-building today can only help a company in the future. Considering that online ad spending is expected to grow by 20% in 2011 in the United States alone, this is definitely an area that brands need to prioritize in terms of strategy, planning, and budgets. Display advertising should be just one component of an online brand-building strategy. Social media marketing, content marketing, and traditional marketing should be fully integrated for the most successful results.

Is your company shifting online advertising budget dollars from search to display or from direct response to brand-building? Leave a comment and share your thoughts on the trends predicted by eMarketer related to online advertising and branding.


Overstock.com Says – That’s O.co to You!

In an effort to reflect its growing line of merchandise, Overstock.com announced a rebranding effort early this year to simply O.co. The new logo is shown along with this article and as of June 6, 2011, it now appears on the company’s retail website and on the O.co Coliseum in California (where the Oakland Raiders and Oakland Athletics teams play) with its ad debut scheduled for mid-June 2011.

Over the year’s, the company’s product line has changed from just overstocked merchandise that needed to be moved at low prices to include a much more diverse selection. Overstock.com President Jonathon Johnson told AdAge.com that 70% of the company’s merchandise today is not overstocks. Instead, it’s primarily “first-run replenishable goods.” The company believes that the globally acceptable O.co web address and the shortened company name from Overstock to O will better position the brand for global growth.

It seems like a natural evolution for the company to rebrand as its merchandise evolves to something different than it was in the past. Overstock.com didn’t fit the bill anymore. The debate is still open on whether or not O or even O.co was the right choice for the new brand with dissenters citing that it doesn’t mean anything or the “O” is too closely associated with Oprah Winfrey.

Of course, it remains to be seen if the company can make O or O.com actually mean something to consumers. As Beth Snyder Bulick of AdAge.com points out, the company’s advertising referenced “the O” as early as 2004 when the company’s television commercials used the tagline, “It’s all about the O.” I’d imagine few people remember that though.

Bottomline, this is a company that probably should have rebranded years ago, but at least it’s finally happening. Was O.co the right choice? The verdict is out on that until we see how the company makes O and O.co relevant and meaningful to consumers. It’s all about perception. Now the company has a chance to start shaping those consumer perceptions about O and O.co. Let’s wait and see how they do.

What do you think about O and O.co? Are they good choices for the new Overstock.com and a global expansion? Leave a comment and share your thoughts.

The Apple Brand Just Keeps Growing

Who would have thought 10 years ago that Apple would be worth more than Microsoft and Intel combined (not many based on an article on The Register)? It happened last week, and won’t change soon based on Steve Jobs’ announcement yesterday about the new Apple iCloud service which ties Apple customers even closer to the brand for the long-haul.

So how did Apple do it? How did a brand that catered strictly to designers move from a niche brand to a global powerhouse?

I think there are three key parts to the answer to that question:

1. Innovation

Let’s face it. Over the past decade, the Apple brand has been all about launching innovative products that meet the needs of changing consumer lifestyles (or become catalysts for changing consumer lifestyles). Remember when Bill Gates said he envisioned a day when everyone would have a computer on their desks? That’s exactly the kind of thinking Apple has done over the past decade. The brand moved from being all about designers’ cliques to being the brand that catapulted the mobile market from phone calls to — everything!

2. Complacency

Let me make something clear. I want Microsoft to succeed. I want to see the innovation the company was known for 20 years ago back in the game. However, this is a brand that got complacent — a common trap for the market leader and pioneer. In the article from The Register that I reference at the beginning of this post, writer Rik Myslewski offers a quote from Bill Gates that demonstrates the beginning of Microsoft’s period of complacency that they’re regretting today. Rik wrote, “Then there’s the quote from a recently unearthed unpublished 1998 interview with Bill Gates that MacDailyNews reminded us of on Friday: ‘What I can’t figure out is why [Steve Jobs] is even trying [to be the CEO of Apple]?’ Gates said. ‘He knows he can’t win.'”

3. Change

Consumers a decade ago were very different from consumers today. Microsoft made the mistake of thinking what they’d been doing would continue to work for years to come. On the other hand, Apple looked for ways to change products, to change markets, to change consumers, and to change the game.

To sum this all up in a sentence: Innovative Apple stole the title of “Game-Changer” from complacent Microsoft over the past 10 years. It’s Microsoft’s time to make a play that puts the brand back into the game and into a position to regain its leadership position. The question is whether or not the company can do it under its current leadership. What do you think?

I’m rooting for you Microsoft. It’s time for a comeback before the clock runs out!

Image: Flickr