Banner Advertising on Social Networking Sites

After insulting the VP of a major banking firm, I decided to email her an unsolicited idea for her internet marketing strategy. Perfect timing, right?

Anyway, I had listened to this VP describe a campaign for a newly launched banking product, and felt there were better ways to utilize the banner advertising they had developed. Thus far, they had pretty poor click-thru on their banner ads, using them primarily on bankrate.com. Why the poor response? I don’t think it is because of the banner design, which I felt was pretty compelling and interesting. I think the ads were ineffective because internet users are becoming increasingly blind to on-line advertising.

Since I am fascinated by social media and how it is affecting consumer behavior, I think there are ways that companies can compromise between traditional methods of marketing and opportunities opening up in the web 2.0 environment. In the case of these banner ads, I thought that compromise could be between incentives (aka bribery) and referrals on social networking pages.

Here is the scenario:

New Banking Product is geared toward young, affluent, internet savvy consumers. It’s likely that they network with other young, affluent, internet savvy consumers. So, once this customer is approved via the product website (which is the only way it is available), the customer is thanked, then offered the opportunity to be entered into a drawing for a very cool tech gadget in exchange for posting a banner for the product on their Facebook/MySpace/blog, etc. They only had to post it for a short period (3 days, or so). The banner could even be modified to say something like “Check this out…I did.”

The banner is now in front of the demographic the bank is looking for, and is vouched for by the original customer. The banner becomes much more relevant, the bank is given the opportunity to strengthen the relationship with the customer, and the customer becomes a voice for the bank.

Obviously there are caveats. I have not discussed or even explored the technological requirements involved, the methods of ensuring compliance with X days posted on the site, or the advertising restrictions on networking sites in general. Also, it is obviously crucial to run this type of strategy through the company’s brand filter to ensure it makes sense with their business objectives and relationship strategies.

Still, I think it’s an interesting tactic. Social media is increasingly about participation between consumers and businesses, about conversations and experiences, and about indirect methods that grow (or aim to develop) positive brand attributes. This tactic is far from that personal dynamic, but I think it’s on the path.

So, how did this VP reply?

"We know we need to get into that space, but we're treading lightly, for not only budget reasons but we're a bank and there is fear in the hearts of our legal and compliance people!! Web 2.0 is all about getting other people to talk about you rather than us talking about us so we need to get there!"

Is Radiohead's Pricing Experiment a Sign of Things To Come?

By now, the Radiohead set-your-own-price-for-their-CD event is old news in the blogging world. 1.2 downloads in the first week at roughly $8 a pop. I'm not even a Radiohead fan, but I am intrigued by their unorthodox pricing experiment, and what it means to the future of transaction pricing.

Presumably, Radiohead wanted to tap into the emerging social networking phenomena. Their fans are likely an Internet savvy, texting-obsessed, MySpace lovin' group. It just so happens that this demographic is comfortable "sharing" digital versions of music with each other, or would maybe pay only for a song or two. Radiohead (and their label*) likely hopes to find extra album sales from these folks who would otherwise not have shelled out for the entire compilation. Their willingness to enter into this type of transaction is a proclamation that they respect and trust their fan base. As a financial consideration, it is evidence they are confident in their brand equity and reputation.

This pricing strategy is especially uncommon because it has to do with intellectual property. Simple economics dictates that if an owner of intellectual property is not compensated for their contributions, there is lack of incentive for future innovation (aside from artists, think pharmaceuticals).

However, as an adoption strategy, the logic behind this type of pricing isn't new. For example, weight management (and social networking) website thedailyplate.com (TDP) is a community of over 100,000 people using TDP's free on-line food tracking software to track their caloric intake. Users have the option of paying a fee for some lite-weight bonus features. And devoted TDP users do, despite the fact that the bonus features are little more than the addition of some cute graphics and priority for service requests. But their is no requirement, no hassling, no annoying emails, no pressure whatsoever to contribute. Those that contribute have determined there is value in TDP, and want to see it succeed.

Many websites offer free services, and (like thedailyplate.com) get much of their revenues from advertising. But with online ads having questionable relevance and low click-thru rates, they may have to modify their business model to stay profitable. Has Radiohead shown us that if there is trust and respect between business and consumer, the goodwill will work both ways?

This is a level of participation and collaboration that is relatively rare. Web 2.0 principles are ushering in new behaviors between business and consumer. Beyond marketing and communication, traditional pricing for products and services may be challenged by this participation-driven phenomena. As an afterthought, I'm struck by the similarity between Radiohead's fans determining their album's value, and tipping a waiter or waitress for their service. Could the the future of payment be determined on value after the fact?

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*Ammendement: According to The Week (11/9/2007) Radiohead released their album online with this pricing experiment without any help or guidance from their label. In fact, Radiohead frontman, Thom Yorke, says "...you have to ask yourself why anyone needs [a record label] anymore." The music industry's decaying business model is leading artists to explore new ways to distribute their work.

Keeping It Real

In my journey to learn more about the possibilities and the direction of the internet, I’ve come across a lot of blogs that talk about social media, social networks, social conversations, social media campaigns, social behaviors, etc. I am astounded by the sheer volume and depth of discussions about the topic. [But, of course, I am one of them, sort of.]

Anyway, I see posts like:

“…the scale of our social networks and connections, the velocity with which news and media travel and the impact this has on our relationships both 'offline' and online.” [read post]

and

"New types of web experiences are enabling people to go beyond just creating content; they’re allowing them to broadcast their personal context too. These “situational lifestreams” are a realtime flow of personal metadata, and it’s time to start thinking about how to design great experiences with them." [read post]

Pretty high-level smarty pants talk, right?

Then I read a post like Scalzi’s, How to Irritate and Annoy People in the Name of Blogging, and it gets me thinking. He has turned this fascinating world of intellectual blogging into something dirty. Well, to be fair, he thinks that many bloggers are simply “starfucking” to get more attention on their own blogs.

Truthfully, I loved this post. I “get” his angle. His words encourage me to write honesty and remind me that I have undertaken this blogging journey because I am passionate about learning.

But you know what? I eat this stuff up. Both the “starfuckery” speak (aka market speak) and the in your face talk. I think it is fascinating and I can’t get enough. I try to read as much as I can hopefully remember the good stuff.

True, I wouldn’t mind seeing less of words like buzz, change agent, and on-line/off-line, but keep the discussions coming.

Think Before You Speak

I recently told a vice president in charge of her company’s internet site that the design looked like information had been vomited onto the screen. Her eyes got wide and she said “Ohhhhh” in a very drawn out way. Luckily for me, the design was being phased out in favor of a new, more sophisticated one. One I liked. One I would not have so tactlessly insulted.

I wish I had better articulated my thoughts. What I should have said was that the new design gave priority to the various types of information on the page and that the color palette better segmented the different types of information. It was a more approachable, sticky design, compared to the original.

So the moral of this story is to think first and to articulate your thoughts in a way that can be taken for constructive criticism. Not rudeness.

PS - I later sent this VP an email with an apology and with the comments I really wanted to say. Thankfully, she replied that she took no offense at all, and that I should never apologize for being passionate about a topic. Very cool.

Beware: Proceed Only if Your Customer Loves You

When I applied to grad school, I needed three references. These reference letters were to be sealed and signed on the back flap to indicate that they hadn’t been opened (or revised and re-sealed, presumably by me).

That led me to think about references in the context of marketing and sales in a business environment. It’s common to include a reference list in an RFQ or when specifically requested by a potential client. But in what other ways could a reference person be leveraged?

Frederick Reichheld's well-known research indicates that the number one way to grow a business is via referrals. In the client satisfaction or customer experience world, the referring people are known as promoters (in opposition to detractors). These are the folks who would recommend you, your business, your work, to someone else. What if we could more proactively encourage our strongest relationships to spread the word? And with businesses relationships getting more personal and co-dependent, this tactic might not be so unthinkable.

Consider this scenario: An architecture firm, let’s call them AF Design, has a meeting coming up with a potential client (PC Firm) for a very large, significant, exciting, (enter your grand adjective here), project. PC Firm is interviewing several other companies to see who is the best fit to work with. The president of AF Design calls up John, the senior leader of one of AF's current clients. John and his well known an successful company, love AF Design and have worked with them for years. AF’s president asks John if he wouldn’t mind calling up the PC Firm and putting in a good word before AF’s meeting with them. John calls PC Firm, says a few kind words about AF, and leaves his number in case PC Firms wants to talk more after their meeting with AF.

Sure, I know this is not as simple as it sounds. I think there are some obvious things to consider:

Client relationship is special
First and foremost, the relationship of the business (AF) and the client they would like to make a referral (John)must be very close. In this example, AF must be doing outstanding work for this client, meeting all their needs and then some. Their relationship must be strong, deep and have many points of contact. It goes without saying, also, that John, in this instance, must be both personable and knowledgeable about the relationship between his firm and AF Design.

Timing is everything
Asking a current client to do this type of referral is very unusual. This is not a request one would make of a client on any type of regular basis. Also, being successful at this request would be made easier if AF had just completed a project in some exceptional way - for instance, 6 weeks ahead of schedule - or had done something out of scope without charging for it.

Furthermore, not every potential client is worthy getting this type of referral. It should be done on special occasions, when the potential project is critical to business objectives.*However, having never done this before, I would highly recommend doing this for a smaller potential account and test the waters to see how receptive a potential company is to this type of marketing.*

Give Guidance
When I asked the president of my company to write a reference letter for me, he said "no problem, but what do you want me to say?" Sometimes, people need a little direction. If your client is willing to do this type of referral, you might want to pass along a couple of points you would like mentioned. Some examples for AF Design are ways they helped grow John’s business, streamlined operations, cut costs off a specific design, etc - points that would be pertinent to the potential client. But make sure the referrer doesn’t feel pressured or that they have a job to do. The “coaching” call should be casual and brief, as should theirfollowing phone call to the potential client.

Know your audience (if you can)
The potential client receiving the referral – an unsolicited, out-of-the-blue referral, at that – should be the senior executive who will be at the meeting who will be making the final decicion. Also, if possible, AF should contact people within their own network to get a feel for what this person is like, to better sense if they would receptive to this type of referral marketing. I’d like to say that any information is better than no information, but wrong information is definitely not better than no information. So this is kind of tricky.

Non competing industry
It is absolutley, 100% critical that the potential client and the referring client are not competing for the same business. Asking McDonald's to recommend your company to Burger King is ludicrous. But asking them to recommend you to Home Depot is more acceptable.

There are probably more guidelines to this type of referral marketing, but I took a stab at at least starting the conversation. I’d like to know if there is anyone doing this already, how they approached it, and what the response has been. Every company is different. This is where a marketer’s intuition and gut play a big part.

My World is Expanding

Social media. Truthfully, it’s a new term to me, though I believe it’s been circulating for some time. I’ve heard old media and new media. But social media? I want to know more!

Wikipedia describes social media as, among other things, “…connection points… the creation of personal meaning and community building opportunities.” Sounds cool. What does that mean?

Social media is a cornerstone of Web 2.0 and uses new technologies (or existing technologies used in new ways) to connect people in ways email and regular old websites don't quite measure up to. Beyond Google, Amazon and Wikipedia, social media is exemplified in blogs, podcasts, online photo sharing (Flickr), video sharing (YouTube), vlogs, bookmarking sites (del.icio.us), and social networking (MySpace). And this is only the beginning. Get on Technorati.com, do a search on social media and you'll definitly get an ear - er - eye full. With social media outlets, niche interests can be explored and shared through these very personal and relevant connections.

And what about social equity?

I love this post from ExperienceCurve:

“My working definition of social equity for the moment is: “social equity is built by aggregating, connecting, reflecting and amplifying the all the small user contributions over time so the whole is worth much more than the sum of its parts.” Sort of like network effects, the more people using it and participating the more valuable your product or service.

This idea of social equity speaks directly to the effects of social media. It feels similar to brand equity, but with a more inclusive bent. Social media and the equity that can be generated from it allow companies and customers to have relationships that are more personal than ever before. That type of relationship can be daunting. The transparency and immediacy of social media means companies and customers will have to look at their current behaviors and see where there needs adjusting. Companies will have to learn how to interact with their customers on a very personal level. And in return, I think this new relationship encourages customers to show a level of respect they otherwise have not been encouraged to show.

A Passionate Message

This past week I was lucky enough to hear a speaker who truly inspired me. How often does that happen? In business school, I often am exposed to knowledgeable professors and insightful guest speakers. Their topics challenge my way of thinking. Sometimes, they make me feel both smarter for having listened but also more lost than I was before I heard the lecture.

But it is rare that I walk out of a class feeling that the stars finally aligned, that I am given a piece of information that I can embrace and use as a guide. And this guy did it. He told me to be passionate.

How cliché is that? Be passionate. Actually, he didn't technically say "Be passionate." In fact, this wasn't a feel good inspirational lecture at all. He talked about his companies, his role in them, his ideas, etc. But there was something about him that made me realize that passion would be critical to my life and career decisions.

Maybe it was his enthusiastic emails prior to the lecture when I started warming up to him. Maybe it was the way he spoke. Maybe it was the eagerness of his delivery, in his description of his work. Maybe it was the business-with-a-healthy-dose-of-creative vibe he gave out, which is more my comfort zone. Whatever it was, I finally saw the light. I want to be passionate about what I do. And I don’t want to be embarrassed by that passion.

[For the record, this speaker’s name was Mark Ballard, Vice President of Client Experience at Ann Taylor, and co-founder of Sugardaddy’s Sumptuous Sweeties (http://www.sugardaddys.com). And really, how can you not like a guy who brings the whole class brownies that retail for $4.50 each and are to die for delicious. Though never ask how many calories are in them.]

Welcome to wet foot

Today I begin my blogging journey.

I chose the name Wet Foot as a symbol of becomming immersed within a topic (getting my feet wet). I am searching for topics I am passionate about within marketing. Starting a blog feels like an appropriate way to begin - to encourage me to keep exploring, keep questioning, and keep learning marketing theories and tools that will guide my professional life. Hopefully, the blog will also help me stay focused and disciplined.

Let's see where this takes me.

kathryn