The Customer in Control

Derek Brown
January 20, 2009
AMCHAM Marketing Committee

© Derek Brown 2008

Seeing
Awareness
“Whatever can be done,
will be done. The only
question is will it be
done by you or to you.
Just don’t think it won’t
be done.”
Social Media Consumption - Global
• Blog Readership among internet users…
– South Korea - 77% read each week compared to 58% reading mainstream press
– Globally - 73% of internet users reading blogs with 48% reading weekly
• Across 29 countries surveyed social media consumption is up
– 83% watch video clips, up from 62% in the last study in June – 59% weekly
– 78% read blogs, up from 66%
– 57% of internet users are now members of a social network
– RSS consumption is growing rapidly up from 15% to 39%
– Podcasts are now mainstream digital content, listened to by 48%
• Social media is a global phenomenon – Top Markets…
– Blogging - China 70%, Philippines 66% and Mexico 60%
– Social Networking - Philippines 83%, Hungary 76% and Poland 76%

By Universal McCann, Brand Republic 24-Apr-08

But it’s bigger than that…
Mega-Trends
“To find something comparable,
you have to go back 500 years
to the invention of the printing
press, the birth of mass media”
Rupert Murdoch

Fragmentation of Attention
A little history…
Tracking the Untracked…

300+ digital TV channels on a typical US platform

and of those
only 40 are actually measured by Nielson

“The thing that we found out is that actually

40% of the audience is actually watching those
channels that weren’t even measured,”
Vincent Dureau, the head of television technology at Google
Google research from millions of set-top boxes:
Trying to Reach Mass Markets
• #1 TV Show watched regularly by households
– 1970: „All in the Family‟ 60% of households
– 2007: „American Idol ‟ 17% of households (Source: OMD)
• TV spots to reach 85% of the UK population
– Late 1980‟s 3 spots
– Today 180 spots (Source: Campaign 2005)
• Nielsen US data (2007)
– The average U.S. home receives 118.6 channels
– And tuned to16, or 13% of available channels
• At least 10 minutes per week
The Tidal Wave of Messages

Consumers exposed to 3,000+ ad messages a day

50+ different types of in-store communication (POPAI)

Research indicated that shoppers passes 1.6 items

every second. In a 30 minute shop that would mean they
pass 2592 pieces of communication.
 “Heaviest TV Viewers
Are Also Heaviest Users of Internet;
30% of In-Home Online Activity Takes Place
While Simultaneously Watching TV”
 Your customer isn’t paying
attention like the old days…
The Long Tail
Long Tail Example

Amazon gets ½ their revenue from titles that

Barnes and Noble doesn’t even carry.
 Everything else
is the top selling product
Filters
November 2008 American Stats
• 146 million people watched 12.6 billion
video clips - doubled in 20 months
• Conducted nearly 2.8 billion searches on
YouTube, about 200 million more than on
Yahoo
Source NYT & comScore
Changing Reader Patterns:
The Power of Links
• Discovering new blog content
• 38% - blog links
• 34% - web search
• 11% - search engines
• 39% blog links = trusted recommendation from a person
• Blogs are not consumed in isolation
• 49% of blog readers and 71% of frequent readers read
more than one blog per session

http://www.retailerdaily.com/entry/blog-influence-on-consumer-purchases-surpasses-social-networks/
 This is an algorithm or
consumer driven process
that is largely
out of your control
The Changing Customer
Customer 1.0
• 1950 through 1960‟s
• Dutiful Consumers
– Introduction of Mass Production and Mass Media
– Opening of National and Global markets
– One-size-fits-all
• Retail Channel
– Rise of department store and catalogs
• Demand outstripped Supply
– Newly affluent consumers with a limited range or brands
and products
Customer 2.0
• 1970 - 2000
• Manufactures expand choice
• Retail Expands, malls become destinations
– Category Killers; Walmart, Warehouse Clubs
– Ultra-niche channels and Specialized Catalogs
• Online appears and Retail builds new channels
– Consumer Buying patterns change, more fickle
– Customer service, returns, 24/7, online/off-line
• Consumers expectations change
Customer 3.0
• Massive variety of channels
• Infinite array of options
• Consumers Dictate how they purchase and consume
• Using community-based tools for decisions
• Uncontrolled conversation between consumers
Your customer is always one
click away from goodbye
So where does this leave us?
 Exploding
Media
Channels

Business &
Marketing Fragmented
driven to Consumers
change
The Internet,
Digital Content,
Web Services
and eCommerce
Social
Everything
Networking
Else is selling
connects
more than
across
ever
boundaries

UGC
Customer
takes control
The Perfect Storm
meets FMCG
Social Media Ad Pain
We then ran those numbers through our Salience product to extract entities which included quotes
about #Motrinmoms, twitter names, places, companies, etc. From there we could see who had
more than 1% of the tweets, which we plotted as being positive or negative. This was a feel for
influencers. From that information we determined if tweets were more negative or
neutral/positive in regard to #MotrinMoms and saw that if you pulled out all of the neutral tweets
(those with a sentiment of zero) we ended up with 58% negative tweets and 42% positive
tweets. But whereas most campaigns are measured as neutral/positive vs. negative, that
overwhelmingly shows that this session would have been 65% positive/neutral vs 35% negative
 Was this a time for
PR Crisis Management
or an opportunity
to engage and excite?
Marketing 101
Old 4Ps Marketing

Customer
Value Creator

Product

Place

Price
4Ps

Promotion
WEB2.0 Marketing

Customer

Content
Product (WEB2.0 Brand) Creator

Place (online, offline)

Price ($, time, ease)

5Ps
Promotion (Integrated Marketing)

Participation Publisher
(Conversations)

Online Visitor
Research

Listening
Emerging Methods
•

del.icio.us
Your Homework
Try a search…
• “your company/product sucks”
• “your company/product problem”

Are you listening

to what people are saying?
Marketing

Talking
TALKING
TALKING
ROI Impact
• Consumer tends to stick with their early brand
• $5 per month x 40 years = $2,400
• Profit Margin 20% = $480 LTV

• Site costs worldwide = $3M

• Breakeven = 6,250 girls become consumers
• 1% of site traffic conversion
 Sales

Energizing
And why do this?
• eBags: 76% of purchasers used the online reviews
– Forester Research ROI:
$200K investment = $400K Profit first year
• Petco : customers who browsed by rating were 49%
more likely to buy
• Less than 25% of ecommerce sites have reviews but
96% who have them rate as effective
 Support

Supporting
Development

Embracing
The Conversation
before the sale
“We think the future of advertising is great products
that have marketing embedded in them.”
Jeff Hicks
CEO
Crispin Porter + Bogusky
October 2006

Source: DMNews - http://www.dmnews.com/Embed-marketing-in-products-Crispin-Porter--Bogusky-CEO/article/93204/

“Something remarkable is worth talking
about. Worth noticing. Exceptional. New.
Interesting. It‟s a Purple Cow. Boring stuff
is invisible. It‟s a brown cow. …
Remarkable marketing is the art of
building things worth noticing right into
your product or service.”

Seth Godin
Author / Speaker / Marketing Expert

Source: Purple Cow / Seth Godin / Page 3

 PRODUCT

PACKAGING

DISTRIBUTION

CRM

ADVERTISING

CONSUMER

Old Marketing
 PRODUCT

PACKAGING

DISTRIBUTION

CRM

ADVERTISING

CONSUMER

Modern Marketing
When it all comes
together
Thank You – Q&A