John Akerson's Thoughts

Business, technology and life

Advertising Failure

Diana Adams has a great post on Bitrebels.com titled “16 ways to use your wrist now that watches are obsolete.” Her post includes some really funny suggestions, with comical illustrations from Lunchbreath.com … including “Backup urinal cake” and “Portable Pot Pie.” (do not confuse)

There is advertising on Bitrebels.com – and I’m sure somebody is paying fror those impressions and click-thrus.  Of course, some of the best advertising is content-specific. If you can put your product in front of a person who is already interested, you have a much higher probability of making a sale. Google makes Billions from this concept. Other companies, and many people also make big heaping piles of money from this simple concept.  But sometimes it fails. Sometimes the best content algorythms and the smartest advertisers promote their product in the wrong places.  And sometimes those failures are remarkable.

Here’s an example:  If you are reading an article discussing wrist-watches, how obsolete they are and suggesting a direct relationship to… say… buggy whips and egyptian pyramid blueprints… are you really looking to BUY a wrist-watch? Maybe not. The content is there, but the CONTEXT makes all the difference.  Here’s a screenshot of the advertisement, on the page focused on “Wristwatch Obsolescense.”

Although I have a great appreciation for why the watches are up to 80% off, seeing that advertisement on that page doesn’t leave me inspired to buy one.  (as an fyi – the link from the advertisement was this: http://googleads.g.doubleclick.net/pagead/imgad?id=CP6jxPL3spWLVBD6ARjvATII8BFY93VjUEI )  I suspect Google’s advertising bots, smart as they are, are still learning… but context is an enormously difficult thing to learn.

March 14, 2011 Posted by | Business, Competitive Advantage, Marketing, Search Engine Optimization, Social Media, Technology | 2 Comments

Audi, Lexus and Sponsored Tweets

Ive been watching Audi online more and more lately.  I went to a swanky VIP/RSVP thing at my local Audi dealership where they unveiled the fantastic new A8. It has a cockpit that is remarkable in every regard. My 2001 S4 seems as retro as a 57 Chevy by comparison.  I’m also kind of impressed by Audi’s push into the Superbowl.  The Kenny G doing Prison Riot Suppression video is the sort of quirky original thing that fascinates me. I have a search for @audi – on my Tweetdeck.

I was surprised this morning to see a Lexus advertisement on top of my @audi search in Tweetdeck.  There’s nothing new about advertising online using a your competition’s words, say as keywords and titles to SEO some people into your site instead of theirs.  Fans Flipping Out  on Bravo will remember Jeff Lewis getting VERY angry at a former business partner, Ryan Brown, for using some keywords a few years ago, and perhaps adwords to help his business. (season 3, of course) 

So – whats new here?   Lexus has sponsored @audi on Twitter. Anyone who has a stored search for @Audi in Tweetdeck and/or Hootsuite will see an advertisement for Lexus at the top of their stream.  Here’s what that looks like in Tweetdeck:

Certainly a delightfully creative way to advertise to your target audience.  Lexus – sombody there is Brilliant.

I think this interesting because LEXUS – sees Audi as serious competition for eyes, and buyers.  Lexus is so concerned about people following @Audi, they are paying Twitter for those responses.  Audi isn’t the only competition for Lexus. If I am in the market for a Lexus, I might look at other makes.  It occured to me that Lexus might be sponsoring other car brands as well.  Guess who else Lexus worries about… enough to pay for sponsored responses? BMW, Cadillac and Infiniti.  Lexus is NOT following Lincoln, Jaguar, Acura, Hyundai or Equus through.  (yet?) 

What do you think? Is this a new trend?

It is also interesting because other companies are sure to follow. Lexus is a leader here, and Twitter can surely use this for every other large company that wants to pro-actively protect their own brand, on Twitter, Tweetdeck, Hootsuite, etc…

February 3, 2011 Posted by | Competitive Advantage, Continuous Improvement, Marketing, Search Engine Optimization, Social Media | Leave a comment

The Cost to Convenience ratio

Bradford Cross wrote a great article on Measuring Measures “Why the iPad is Destroying the Future of Journalism.”

He was a bit off the mark in discussing Facebook, and could have provided more useful content by discussing Twitter because Twitter is a competitive microblogging platform that more directly delivers news-ish information.  His point was valuable because he focused on ways that media needs to address how it delivers unique content in a way that allows people to share.

Traditional media needs to ensure their cost to convenience ratio is favorable. 

What is that?  Here’s an example:  Your bank would love it if you, personally, used them for CD, Checking Account, Savings Account, Car loan, mortgage, IRA, online banking, online bill-pay, mobile banking and every other consumer service they offer. They want you to use their atm’s, their branches, and every location they offer.  They want the fees, of course, but they also want to make it more difficult for you to go to another bank and start up all those accounts, at that other bank. If your relationship with your bank is deeper, it is more difficult for you to switch. That convenience has a huge value because of the cost of changing, in terms of time and aggravation.

When your personal cost of switching (in time, and aggravation) exceeds the pain you feel from staying with a bank, they’re a winner.  This applies for ANY business.

If your convenience exceeds the cost you’re charged for that convenience, you, as a customer, might be content to be their loyal customer for EVER. You may slide from being a customer to being an evangelist.  This works for a local newspaper too, which may have a virtual monopoly on newspapers in a regional or local area. In many cases when a local newspaper is the only game in town, it can afford to be sloppy and cheap . The Winston Salem Journal, for instance, recently fired their entire copy desk. For their customers, the cost of finding an alternative far exceeds the cost of staying a customer. In some cases, there IS no alternative.

Look at Hyundai’s new Equus. Car and Driver’s comparison shows that it essentially clones the Lexus LS460L . “When Korean engineers set about copying the modern LS, they swallowed their inventiveness and simply deployed a really good Xerox machine.”  They did it extremely well, and “as-tested LS460L cost 50 percent more than the Equus.”  That is a steep cost for the convenience and pleasures of owning a car with the Lexus name.  Ironically, it is similar to what Toyota did.  “Note the way the Equus undercuts the six-figure Lexus. Just like Lexus undercut Mercedes 20 years ago.”  Hyundai “xeroxed” the LS460L, and it has also copied Toyota’s Lexus business model to a certain extent. (Using Toyota’s business model against Toyota.)

Every business needs to look at the cost/convenience ratio that they provide. It is a real key to deepening customer relationships. Deeper customer relationships increast the cost of changing to competitors.  Successful businesses (Zappos, Amazon, Lexus, Hyundai, etc) aspire to make their customers happy because happy customers are loyal customers. Those customers are loyal, in part, because of the cost to convenience ratio.

Every Lexus’ LS460L that is sold this year is an example that the value of that loyalty… Every person who buys a Lexus LS460L is a person who is willing to spend tens of thousands of dollars for a Lexus, when there is a much less expensive substitute available. Those purchases show loyalty for Lexus’ past performance.

January 10, 2011 Posted by | Business, Competitive Advantage, Life, Social Media | Leave a comment

Black Friday is Dead

Black Friday, the Friday after Thanksgiving, is a day that combines a recipe of these ingredients: pent-updemand, planning for holiday gift giving, end of year bonuses, excessive credit, retailer desires, and a deluge of advertising across all forms of media. It is one day, marked in black, when retailers theoretically break even for the year. It is a day that serves as a standard measure of the economy.

According to USA Today, “Last year, the Thanksgiving shopping weekend accounted for 12.3% of overall holiday revenue, according to ShopperTrak. Black Friday made up about half of that.”

Link to Tombstone Maker
Black Friday is dead. Why? It is dead because people love options and alternatives, because some people hate crowds, and most of all because every retailer is now offering more and more options. Here are a few: Buy online, buy on Thanksgiving day, buy on Cyber Monday, buy a week before Black Friday, buy the week after or on any of the shopping days between Thanksgiving and Christmas, or – simply choose not to buy.

Breaking news today shows Black Friday sales rising modestly or enormously, but each article is just showing a small piece of the Black Friday pie.

Here’s some information from Yahoo: “U.S. online sales were up 33 percent on Thanksgiving this year, according to IBM Coremetrics, signaling irresistible promotions in advance of Cyber Monday, the kick-off to the online holiday selling season.”

Major media outlets like Reuters are saying that U.S. retail sales on Friday rose a mere 0.3 percent from the same period last year, while traffic rose 2.2 percent, ShopperTrak said. Heavily discounted merchandise may increase volume, but negatively skews sales data while cutting into profit margins.

But that is just a little piece of the real story. Paypal money transfers increased enormously, and further, Paypal data suggests that the “shopping season began on Monday, November 15, 2010.”

 How significant is that?  Here are some other tidbits of data: 

“Black Friday 2010 resulted in 21 percent more total payment volume compared to Thanksgiving 2010. PayPal saw 19 percent more payment volume on Black Friday 2010 compared to an average Friday in 2010.  PayPal processes 16.5 percent of U.S. eCommerce and 15 percent of global eCommerce.”

So – is there a 0.3% increase? Or a 27% increase?   Experts had forecasted a 2-3% increase

And many enormous retailers were open on Thanksgiving day. (Including  Sears, Toys ‘R’ Us, Kmart, Walmart, Gap, Old Navy and others) My local CVS pharmacy was open until Midnight on Thanksgiving. Many of these retailers had Black Friday deals available early. Many online businesses offered Black Friday deals early.

The cumulative effect is that Black Friday isn’t comparable to last Black Friday because the buying has been moved to a multiple-day, multiple medium affair. What was once confined to a day and a physical location is now everywhere over several weeks.

Black Friday is dead. We will still have a “Black Friday”, and will still call it Black Friday, but sales will begin earlier and earlier and last later and later. Combining that flexibility with online sales will mean that at some point, we might start calling it “Black November-December”  Whatever it is, and whatever it is evolving into, it isn’t Black Friday anymore.

What do you think?

November 28, 2010 Posted by | Business, Life, Marketing, Social Media | 1 Comment