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YOU ARE HERE…Whether You Like It Or Not

Wednesday, August 25th, 2010

By Doug Stephens

A recent study by Forrester Research concluded that while location-based services (LBS) such as Foursquare, Gowalla and Loopt are intriguing, they are still too small for major marketers to spend much time on.  Location-based services allow users to not only share their physical location with others but also to gather and receive information relative to their location such as reviews, recommendations, other nearby venues and friends that may be in proximity.  Forester added that while current users of location-based services are very likely to be influencers within their social circles, they are also largely male and therefore better suited to marketers targeting men.  Their overall advice to marketers was a resounding “wait-and-see” on location-based services.

Then Why So Much Location-Based Marketing?

But it’s hard to reconcile the Forester report with a lot of what’s happening in the marketplace.  Large players like Starbucks have been experimenting with services like Foursquare since early 2010, giving in-store discounts and rewards to users for checking in to their stores.  The GAP recently launched a one-day 25% off promotion to Foursquare users checking-in at GAP locations.  Add to the list the Wynn Las Vegas Hotel, the City of Chicago and Tasti D-Lite and it would appear that location-based marketing is being taken very seriously by major marketers across categories.  And it all seams completely understandable.  After all, isn’t the goal of marketing to be timely and relevant?  It would seem that LBS is an ideal means of achieving both.

Recently released LB applications such as the Shopkick are making news by taking shopper rewards to entirely new and location-specific levels, literally allowing shoppers to earn rewards simply for moving through various areas of a participating store.  And with retail giants such as  Macy’s, Best Buy, Sports Authority and American Eagle Outfitters and Simon Property Group testing it, Shopkick is getting some serious attention.

And in what is perhaps the ultimate sign that LBS has arrived, Facebook recently launched its own home-grown location service, Facebook Places, allowing users to share not only what they’re doing but also where they’re doing it.

All this activity and interest around LBS begs the question, if in fact marketers follow Forester’s advice and wait on the sidelines, do they run the risk of missing the “LB boat” entirely?

Making Location Make Sense

What most agree on is that location-based marketing services are still relatively new to the mainstream and largely misunderstood by the public and marketers alike.  To that end, organizations are forming to foster discussion, education and understanding about LBS.  One such organization, the Location-Based Marketing Association of Canada hopes to not only better define LBS but also share with marketers the unique opportunities the technology represents.

In response to the Forester study, Association Founder and President Asif Khan said “What they failed to highlight was the explosive recent growth of such services. Foursquare alone has over 2.5 million users and has experienced 28% growth in just the last month, according to RJ Metrics. More and more people are beginning to utilize location-based services and as Smartphone adoption increases globally, the numbers will only continue to increase.”  Khan also points to the introduction of Facebook Places as having the potential to immediately introduce upwards of 500 million users to the concept of location based services.

As for marketers considering location-based marketing, Khan believes that those who “move to embrace LBS early-on will reap enormous rewards from proximity marketing, including attracting more first-time customers, encouraging more repeat business and increasing sales.  I also see huge opportunities for cross-brand promotion for companies that have multiple brands like Gap and Old Navy.”

Forget technology. It’s about “return on relationships”

Techno-Anthropologist Clay Shirky is quoted as saying that “Communications tools don’t get socially interesting until they get technologically boring.”   To that end, Khan sees the use of LB reaching critical mass in 18-24 months.  “I think Clay is right” said Khan. “I don’t think it’s about technology at all.  At least, I don’t think people care about which app they use.  They only care about the size and relevance of the deal.   For brands and retailers engaging with these tools, the real measurement of success will not only be ROI, but Return on Relationship (ROR).

As for the future and the continued evolution of location-based technologies, Khan suggests that the very context in which we consider the term location will also evolve.  “Today, we think of location as only the physical space.  But I see a time where we will be in virtual spaces and augmented reality where brands and content will live as well.”

Full disclosure:  Retail Prophet Consulting sits as a current member of the advisory board for the Location-Based Marketing Association of Canada.

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Posted in Marketing, Technology, The Future, Trends, social media

Privacy is Dead… and It Could Be Great

Tuesday, May 11th, 2010

By Doug Stephens

Recently Facebook announced its intentions to develop what it calls the Open Graph, a means of connecting data about an individual based on their choices, tastes and preferences by profiling  their social networking and web activity. The idea is to link all of this data and then bring it to a central point; that central point being Facebook, of course. In doing this, Facebook would be capable of graphing an intricate, accurate and ever-evolving picture of the individual consumer.

The strategy involves a few things. First, they are allowing partner sites to interface with Facebook. When a user comments on an article (on CNN.com for example), it would be shared with their social circle on Facebook and in the process, the fact that the user visited CNN.com would be noted and added to their graph. Second, they’re going to share the “like” button programming code so that any business can place the button on their site to create a social-link back to Facebook. In the process, Facebook gathers more data about that user’s preferences outside of Facebook itself. Lastly, they’re going to break from the current protocol of not storing or caching user data for more than 24 hours. They didn’t give any details about how long they intend to store this information.

 The open graph is the Holy Grail of marketing

The point in doing all this, according to Facebook’s founder and CEO Mark Zuckerberg is to “create a Web that’s smarter, more social, more personalized, and more semantically aware.” In other words, to bring all our disparate likes and dislikes together to form a unique profile of who we are and in doing so, allow the web to deliver data that’s more tailored to our needs as consumers. The subtext however is obvious. By holding the keys to the open graph, Facebook literally becomes the centre of the marketing universe and the preeminent channel for any brand that wants their message to reach consumers with unprecedented timeliness and relevance – the issues that have always been the greatest challenge for marketers.

Reaction to this announcement ranged from enthusiasm to anger. While some viewed it as a positive step toward a more connected and meaningful internet experience, others saw it as yet another step in the eradication of privacy as we know it.

In fairness to the naysayers, anyone who’s been phished on Twitter or Facebook can attest to the fact that the web can be an ugly place when you share the right information with the wrong people. What’s particularly disconcerting is the speed and scale of the damage that can be done when your information gets compromised. There’s no question that we need to be vigilant in our pursuit of improved safeguards to this sort of activity.

Privacy is outdated

Having said all that, I believe that the idea of privacy is completely outdated. To be honest, it’s a nostalgic notion that we’ll describe to our grandchildren who will no doubt wonder why it mattered so much to us. They may even speculate as to what we did that was so weird or shameful that we didn’t want other people to know about it.  

And what privacy do we really have anyway? We live in a world where your picture can be taken hundreds of times in the course of a normal day. Our cell phones are like homing beacons, tracking our whereabouts at all times. Our credit card is a trail of digital breadcrumbs a hundred miles long. And it’s now routine to Google someone before you meet, hire or do business with them. Our lives are anything but private. Good lord, talk show hosts and golfers can’t even keep a good old fashioned affair under wraps. So why should we care about handing over more of our personal information to institutions and companies? It’s not about privacy.

It’s really about trading information for value

Traditionally when we give companies information, we don’t get any real value in return and if we do get anything, it’s usually just generic offers, junk and noise. Life doesn’t become easier or less complex – just the contrary. It becomes filled with more information that we don’t need.

However, imagine if we could move to a state where the marketing messages we receive are almost completely relevant and timely. If virtually every piece of direct marketing you received made perfect sense with respect to your tastes and preferences and needs at that moment. If the advertising you were sent matched your life-stage and interests perfectly. If even new products that you’d never heard of made sense with respect to your unique needs and wants as an individual.

Would you be willing to trade a little privacy to get to this point? I know I would.

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Posted in Technology, The Future, social media

If a Brand Falls in the Forest… the power of social listening

Monday, April 12th, 2010

By Doug Stephens

There’s been an incredible amount of talk over the last few years about social media.  And frankly, most of the talk is about talking.  In other words, using social media as a vehicle through which brands can talk to consumers.  The more enlightened might refer to the talk as “conversation” but the gist is the same – social media is often represented foremost as a means of speaking to consumers.Listen

When we hear social media advocates speak, it can be a hyperbolic litany of statistics, stories and case studies that leave the audience feeling that if they don’t set up a Twitter profile and begin blogging immediately, they’ll be washed away in a sea of radical change. 

The problem with this approach to social media adoption is twofold; first, it can lead to paralysis.  That is to say, companies can literally become overwhelmed at the idea of having to create and distribute digital content.  Questions about who will create it, where it will be distributed and how it will be measured abound.  Concerns about approvals, security and brand reputation also percolate.  They wonder how the expense can be justified when they don’t even understand how to measure return on investment.  In the end, many companies simply decide to wait on the sidelines. 

Equally detrimental is the scenario in which brands, so eager to leap into social media, naively transport their current marketing strategy and messages into the social space.  In their haste, they often neglect to rework their messaging for this new and decidedly different media channel.  The results of bad social media can be devastating with brands actually losing equity and loyalty.  In the end, these same brands will often dismiss social media as the culprit and label it a waste of time and effort.

Start By Listening

What we hear much less of in discussions on social media is that listening is in fact the first best step that brands can take.  No blogging, tweeting, Youtubing or updating… just listening.  In fact, the power of social media as a listening tool closely rivals its benefits as a publishing tool.

Listen to the conversation that’s already taking place about your brand, product category or industry.  You might be amazed at what you learn from the social echo. 

Connecting with consumers in the social space is much like exploring the universe.  Before you begin travelling into space, it’s important to know which of these social planets actually support life – and preferably life in the form of your target consumer.   There’s no point in pouring time and effort into a Facebook initiative if most of your customers are interacting on Flickr.  Secondly, you need to learn the language that’s being spoken on these planets before you attempt to converse within them.  Nothing resonates less than the wrong message in a social network.  Most importantly, you can gather a sense of what really matters to your consumers and what will capture their interest. 

Along the way you’ll even develop familiarity with key influencers and voices of authority in the space – the people who can really help  spread your message if you craft it properly.  You’re also likely to build a sense of the consumer’s attitude toward your competitors which is always invaluable.

From Observation to Conversation

Once you develop a clear sense of the social networks where your customers are most active and  learn what they seem to find most interesting, you’ll have a much clearer sense of the kind of content you need to develop to engage them.  This will allow you to better calibrate the manpower required to develop it and approximate cost of your program.  The basic awareness earned through listening puts the entire social media initiative in perspective and gives it a clearer sense of intent.  Most importantly, with the insights you gather, the likelihood for a successful program increases exponentially.

The world really doesn’t need another blog, tweet or fan page.  What it does need is valuable social interaction that informs, excites and engages.

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Posted in social media

H&M Submits to Twitter Firestorm

Wednesday, January 13th, 2010

One of my favorite quotes about social media is from noted social scientist and technology expert,Clay Shirky. It goes like this: “Tools don’t get socially interesting until they get technologically boring. It isn’t when the shiny new tools show up that their new uses start permeating society, it’s when everybody is H&M 34th Street Storeable to take them for granted.” The point here is that the technology isn’t really what matters. What does matter is the social change the technology fosters.

A perfect illustration of this took shape last week when a story broke concerning global apparel retailer H&M. The New York Times reported that H&M was discovered destroying and discarding large quantities of perfectly good (but unsold) clothing at its 34th Street location in Manhattan.

Despite the Time’s request for comment, H&M remained mum on the issue – presumably hoping it would go away. But then something remarkable happened. Something that only a few years ago couldn’t have taken place. Twitter got a hold of the story and within minutes the issue was rocketing up the trending topics list.

Tweets lashed out at H&M for what people saw as gross lack of charity for not donating the items. Others keyed in on the environmental faux pas of throwing useable clothes in the garbage. And almost all marvelled at how the retailer could be so callous to the obvious financial hardships people faced in the current economy. In no time, it became a firestorm. 

The topic spent a full day in the number two spot on Twitters trending topics list before a representative from H&M contacted the New York Times to say very simply that it would “not happen again” and emphasized that this was “not a standard practice.”

Following the statement, tweets of acknowledgement and even commendation for H&M filled theTwitterverse. Not only was the mob satisfied with the response, they were spreading Kudos to H&M for owning up to the problem and doing the right thing.

 

What’s meaningful here is that it wasn’t the New York Times or any other media titan that brought H&M to bear on the issue.  It was ordinary people leveraging simple technology to create social change. It didn’t require pickets outside the store, letters to the company president, or an embargo on patronage. It merely took one day in the digital court of public opinion.

If there’s a lesson to retailers in this, it’s that sitting on the social media sidelines is no longer an option. Even the worst controversy offers hope of redemption, provided companies listen and respond quickly. And perhaps most importantly, the days of “no comment” crisis management are over.

 

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Posted in social media

6 Reasons Why Twitter Makes You a Better Marketer

Wednesday, November 25th, 2009

By Doug Stephens

There are many reasons why retailers should be incorporating Twitter into their marketing mix. One important thing that no one seems to be talking about, however, is that using Twitter to market your business will make you an infinitely better marketer.

I know this may seem counter-intuitive given Twitter’s micro-blog format—which to the uninitiated appears to be nothing more than an endless stream of short information bites—but it’s precisely the abbreviated nature of Twitter that can make us better and more effective marketers.

Here’s why.

1. Clarity is Key: It doesn’t matter if you’re Al Gore or Ashton Kutcher, you get a maximum 140 characters, no more. Within that space, you need to clearly position your brand, product, or call to action. Amazingly, with some practice, this restriction can produce Zen-like clarity in your messaging. When you think about it, the best marketing messages are rarely wordy or complex. They’re clear and straight to the point. Twitter trains you to do just that.

2. Self Promotion Doesn’t Work: Blatant self-promotion has always been a bad marketing tactic but through the lens of Twitter it looks even worse. Twitter forces marketers to find ways of being important to consumers without being self-important. By promoting the needs of the consumer instead of promoting yourself, you’ll literally learn how to create a community of customers. A lesson many marketers never learn.

3. Reaction in Real Time: One of the huge problems with conventional marketing is lag-time. By the time the campaign is conceived, packaged and broadcast, we’re usually onto developing the next campaign. By the time consumer reaction begins to filter in, it’s usually too late to affect the positioning or execution of future communications. And so it goes. With Twitter, you know within hours if your message has resonated and spread. With real-time insights, you can fine tune your content to consistently connect with your followers.

4. Money Doesn’t Buy More Space: Marketers often complain that if they only had more money they could buy more attention, often resigning to being out bankrolled by their competition. With Twitter, everybody’s wallet is the same size: 140 characters. Sure, if you’re Best Buy, you can get more people in your company tweeting but that’s no guarantee of success. Look at some of the top re-tweeted Twitter users. Many are individuals and not large companies.

5. Twitter Models Real Life: Twitter is a great real-time representation of the sheer amount of marketing traffic consumers are subjected to every day. Therefore, it’s the ultimate testing ground for your message and your ability to connect to consumers. If you can break through the noise on Twitter, you can do it anywhere!

6. Twitter Makes You Smarter: Twitter is a proverbial fountain of information! Used wisely, you can vastly improve your knowledge and expertise as a professional. You’ll be amazed at the competitive advantage that this new level of insight can create.

If your a Tweeter and can add to our list of reasons to use Twitter, leave us a comment!

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Posted in Marketing, social media

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