The Blog

Meaningful Marketing Start-ups: Outbrain

This is the second post in a continuing series about new start-ups that are leading the way in creating tools that big and small brands alike can use to deliver Marketing with Meaning to their customers. Unless otherwise noted, I have no personal or business ties to the companies I feature. If you think you have a company that deserves a spot here, drop me a line.

A couple of months ago I got a Twitter message from Gilad de Vries, the VP of Digital Ventures at Carmel Ventures, one of the largest venture capital groups in the world. He shot me a direct message asking if we could chat. Now, normally I don’t take a “Twitter cold call” from people, and there are many companies that are eager to work with us so I have lots of screening steps. But I was intrigued to get a message like this from a VC VP. I’m glad I did respond, because I got the chance to learn about Outbrain, a company that Carmel Ventures is investing in that is a no-brainer for any company that is producing meaningful content.

Outbrain is the company that manages the list of links you often see at the end of articles on sites such as CNN and USAToday. No, not those annoying ads for cheap teeth whiteners, but rather the links that say, “If you like this article, you might also like these.” Outbrain’s team has spent three years perfecting an algorithm that ensures that these links are as relevant for the reader as possible. It has the ability to plug in these useful links to nearly any content provider’s content management system, and the company finds that one of these links are clicked for about 5% of the readers of any given article. It’s no wonder that sites as diverse as National Geographic, The Sporting News, and The Boston Globe are using Outbrain.

But the magic comes in Outbrain’s meaningful marketing business model. In addition to providing links to other articles within a given media property, Outbrain has permission from content owners to include sponsored links to outside articles. In its simplest use, if your brand is creating content consumers will enjoy, you can pay Outbrain on a cost-per-click basis to make your articles and videos appear on sites such as CNN and USAToday as content, not as advertising.

Here’s what that might look like for American Express. The company is already providing a lot of great content on its OPEN Forum, and it worked with Outbrain to put a relevant sponsored link in an article at The Daily Beast.

Outbrain helps solve one of the killer issues for brands that have a right to win and a desire to publish meaningful content: How do I get people to discover it? With Outbrain, brands can set aside a budget to drive traffic and pay on a cost-per-visit basis, just like Google AdWords, which many are using today. But I would argue that Outbrain might bring better traffic than Google. With Google, people are hunting for a specific answer and leave once they find it. With content browsing through Outbrain, people are in a relaxed reading mode and are more likely to explore your site further.

The company further nails the experience for the marketer with its website analytics tool. Just log in to your account and you can see how much traffic you are getting and which articles are generating the most engagement. You also can manage your budget quickly and easily in real time.

Outbrain has a few additional benefits that I love. First, brands with a lot of content can actually install the Outbrain plug-in on their own sites and improve readership within the site, as well as earn credits with the company by allowing sponsored links to other brands. Second, it can be used to drive traffic to content that is completely outside of the brand’s control. For example, a major automotive brand used Outbrain to send traffic to bloggers who had said positive things about one of its new models.

In reviews like this I always feel compelled to share some of the negatives and watchouts, but I can’t find much to not like here. The only questions to me lie around how much traffic Outbrain can actually deliver, and whether or not the people who come in stick around and return. But Outbrain will work with any brand at a reasonable test budget to get real-world data to answer these questions. I believe in it so much, I’m actually testing the plug-in here on this blog!

It’s rare that I see an idea that is a complete win-win-win for the consumer, the marketer, and the start-up business. If you brand or client is publishing content, Outbrain is a no-brainer to test and learn from. Please reach out to Gilad and tell him Bob sent you.

Weather Channel App Ad Analysis

A few weeks ago I wrote about how mobile advertising is failing to work for either consumers or marketers, and today I wanted to quickly share another example of how it is falling down in other places.

As a frequent traveler, I have really enjoyed the Weather Channel app for my new iPad. It has a beautiful interface that quickly allows me to pull up local weather conditions, forecasts, and a predictive radar map. In fact, the app is much better than the Weather Channel website, which is cluttered with ads and links. However, its iPad app advertising model is cloudy, and I don’t see the forecast getting much better.

Naturally, the Weather Channel is trying to turn its app into an advertising medium, and it includes a marketing message on the loading screen and an ad unit in the lower left-hand corner of the local conditions page. However, there are a few obvious problems that should turn off marketers and consumers alike: First, I have been getting the same ad for the Cadillac CTS-V Coupe ever since I first downloaded the app. It is pretty obvious that The Weather Channel either has had no other advertisers embrace its iPad app, or the Cadillac brand dumped a ton of money to buy up the inventory in an effort to “own” this new channel. Either way, it’s a waste of their money and my time.

The second problem is that the ad itself feels very heavy-handed and simple-minded. As you can see from the screen shot above, the same “Perfect Conditions” ad unit is displayed no matter what the weather forecast is. Whether it’s beautiful and sunny or rainy with flood warnings, it’s always “perfect conditions” for a CTS-V Coupe!  Both Cadillac and The Weather Channel would have been smart to have a few versions of the banner creative that actually change based on the weather conditions you pull up. For example, if the rain is pounding, the ad unit could describe a safety feature of the car. Just acknowledging the current forecast adds relevancy, which rewards the user and increases the likelihood of action.

The heavy-handedness continues in the links under each day’s forecast–note the “Perfect conditions for a dream drive” repeated three days in a row, again, no matter what the forecast is. This was obviously something The Weather Channel threw in to make the Cadillac team feel even better about its media buy; however, it is irrelevant for the user and looks lame. This makes one remember that checking the weather does not mean someone is in the mind-frame to start exploring new car options.

Yes, it’s still early for this new medium and over time improvements are likely. However, there really is no excuse for this ad overload out of the gate. The Weather Channel should not make the same mistakes on the app that it has made on its website; and if Cadillac is the only advertiser, then use the extra impressions to advertise new cable channel shows or explain in-app features. Finally, Cadillac should take the time to try something new and relevant in this new medium, rather than repeating the same, tired single banner ad.

Meaningful Marketing Start-ups: SaveWave

It’s been a little more than two years since our launch of the Marketing with Meaning platform on this blog, and nearly a year since the publication of my book on the topic. One of the interesting things that has happened since I’ve been trying to drive this new paradigm of marketing is that I have come into contact with a wide range of individuals around the world who also believe in our cause. It’s a delight to log in to my email, Twitter, or blog accounts each day and find a random message of thanks from someone who has just discovered what we’re aiming to do.

As a spokesperson for this next evolution of marketing and a strategy leader at a digital agency, I also have a chance to connect with entrepreneurs who are building businesses based on the shift toward Marketing with Meaning. While there are some people trying to create businesses based on shoving interruptive ads in front of our faces, a handful of start-ups are working to build platforms for marketers to add value through their advertising. So in the next few weeks I plan to feature a few of these businesses here. Unless specifically called out, I have no financial ties to these companies; rather, I believe that their success will serve as a catalyst for the movement that we desperately want to see supplant the old approach–so I want to give them whatever helping hand I can. And in a few weeks I will even be able to share a meaningful marketing platform that we have been working on for more than a year here at Bridge Worldwide!

First Up: SaveWave

SaveWave is a rare example of a start-up that was spawned from a large company–that itself is part of a much larger organization.  The company was recently formed as an offshoot of Upromise, the multi-brand loyalty program that helps people save money for college. Upromise itself is a great meaningful marketing platform that I had a chance to work with when I worked in marketing at P&G.  It has helped people save billions and generates huge results for its brand partners (see my previous post here). Because of its success, Upromise, in turn, was purchased by Sallie Mae a few years ago. In June, some of the key founders of Upromise saw a huge opportunity to take a piece of Upromise’s success model and create something new.  Such “intrapreneurship” is praiseworthy on its own, because it can be so difficult to build something on top of your day job and get the parent company to embrace a concept that is outside its usual business model.

SaveWave was created to channel a very powerful tool: access to product-level purchase data at more than 27,000 retailers in the U.S. Getting access to this UPC and shopper card data and building the trust of retailers comes from years of work by Upromise. Now this access will allow SaveWave to help marketers create other offers and promotions that are based on understanding whether a specific transaction occurred.  This unlocks an incredible amount of potential for meaningful marketing. The first and most obvious use of this system is for mobile/digital couponing, which Upromise has actually been offering since 2008; but this also allows for much more, for example:

  • Brands can partner with retailers to make personalized offers to customers. Instead of one-size-fits-all coupons, you can test various alternatives and vary your offer according to customer type.
  • Marketers can go beyond just offering cents back, and instead could allow customers to earn other “rewards,” such as frequent-flier miles, iTunes songs, or Starbucks cards.  These latter alternatives can be much more meaningful in that they are “real” benefits that you can feel and spend, whereas $.50 savings on a $100 bill at the checkout lane is not registered as a real savings by shoppers. Meanwhile, marketers can purchase these kinds of rewards for less than the actual cost of redeeming a coupon.
  • SaveWave plans to “white label” its tool with one or more APIs. In other words, they want to provide the back-end engine that a thousand other big companies, entrepreneurs, and app-builders can use to create their own meaningful marketing tools.  We’re already assessing the tool for our clients and our own app ideas.

Nothing is easy in the start-up world, of course, even if you have competitive advantages such as SaveWave’s data access and a nice first round of venture capital funding. I think the company’s main challenge will lie in figuring out how to stand out among a very wide swath of competitors. Digital and mobile couponing is a no-brainer and will eventually happen; the result is that everybody is going after the prize.  I think the key to success will be to actually get relationships up and running quickly, using big deals to lead to drive positive momentum.

So if you’re on a big brand or working on a way to make digital coupons and rewards do more for your business or clients, check out SaveWave and contact my friend Brendaen Makechnie over there.  Tell him that Bob sent you.

And so another personal venture into the new is complete. Following in the footsteps of services such as Second Life and Pointcast, I have now decided that Foursquare is no longer for me. It has gone down a personal “hype cycle” in my life–going from interesting to integral to ignoble in just a few months. Where once I was checking in with glee and sharing my whereabouts with new collections of friends, now I’m moving on with life and onto Facebook Places. My personal journey is one that others have also reported, and I think a look into why Foursquare worked for a while, and how others continue to be a part of my life, shows a path to meaningful platforms.

What I Loved About Foursquare

I got into Foursquare big-time back in March 2010 during the annual SXSW event. I attended with a small group of Bridge people and we had fun checking into new places and tracking each other’s locations around Austin. I was immediately attracted by the fact that you could walk into a restaurant and find a digital trace of other people who had been there in the months, days, or minutes before. The app allowed me to share my experience with Facebook friends and Twitter followers, and I was delighted by the chance to earn fun badges. And as a digital marketer I also saw firsthand the promise of location-based services.

Over time I tried to build Foursquare into my routine around town. I would meet people for a drink at a bar and excuse myself to check in, and I would dutifully add new locations to the service in order to “get credit” for my appearance. As a digital marketing consultant, I also began to speak glowingly of the possibilities of this new service

Where It Fell Apart

But soon the bloom came off the Foursquare rose for me. The first negative came in my attempt to work with the company on behalf of some of our very large clients. Phone calls went unanswered and scheduled phone calls ended with me sitting on the line waiting for their side to pick up. I quietly advised my teams and clients to wait until the company got its act together before we went further down this road. As a user, I also started doubting the value of this once-cool toy. I began to hear stories of people getting burglarized when they were not home, and my wife wondered why I was telling the world when I was out of town and she and my girls were alone.  The “Honey, I need to understand what’s new in digital because it’s my job” excuse goes only so far, especially when there is no real utility in Foursquare at the end of the day.

And here we come to the real issue: There is no clear reason to install and use Foursquare. It is a toy that entertains for a few days or weeks, but at the end of the day there is no reason to make this a habit. Hardly any stores or restaurants pay attention to the service by, say, offering free offers with check-ins. The mayorships and badges seem silly after a while.  And your friends tend to get tired of seeing where in the world you are.

Meanwhile, Facebook has come into location services with something that works much better. You can utilize your current friends list rather than starting from scratch with a new network, and check-ins can link directly to the Facebook pages of where you happen to be. Stores and restaurants can do marketing on their Facebook pages and offer information or special deals. Foursquare is still figuring out how to build a business and service users and marketers. But Facebook has this down already.

The Lesson: What New Apps Need to Succeed

In looking at a wide range of new digital services, I believe some patterns begin to develop. And the biggest one that I see right now, across everything from mobile apps to social media services, is that success comes in degrees based on whether the new company has the following:

  1. The Toy Factor — When people can download your app, try something new, and show their friends you have yourself a great “toy.”  Foursquare is a toy. It has novelty, a link to the real world, and some games including the chance to earn badges. This is enough for people to download and play with for a few days or weeks, but it won’t last forever. The gang at Foursquare is still keynoting conferences and now has some investment dollars, but I believe the time has gone. The company should have built these next two factors into their initial design.
  2. A Valuable Tool–Once past the toy factor, your app needs some kind of useful service in order to succeed. Facebook, for example, started out for most of us as a clever toy that allowed us to play with self-expression. But many of us started using the service to communicate regularly with our friends. And because it was so useful, we built it into our daily habits and rituals. Foursquare could have created a simple way for retailers to communicate with the people checking into their businesses. Or it might have been launched with a focused purpose of helping people find money-saving offers on the places they visit. Now an app called Shopkick is showing it the way in this direction.
  3. Meaningful Marketing Model–Here’s where a lot of services have still not cracked the code, and where there is still tremendous opportunity for today’s start-ups. For marketer-supported services, you need a business model in which the advertising itself adds value to the service. Facebook is a great tool, but it still hasn’t shown that the little-seen ads on the right-hand side can drive marketers’ business. The best example of success here is Google and its AdWords service. The company started with a new search algorithm based on human link sharing. This was immediately a new “toy”–and because the results were so much more accurate, Google became a valuable tool. When the company created an advertising model based on search, everything came together; Google search ads are relevant to the searcher, and the marketer pays only when a desired action takes place–so there is a win-win-win that has created a +$20 billion business for Google.

I’m obviously simplifying the world of digital services and apps here, but I think this list helps to put a lot of things competing for our attention into their place.

Like a lot of people in the digital marketing industry, I’ve spent a lot of time looking ahead into new advertising formats to help my team and clients understand where the future might take us. Mobile is one specific area that has taken a lot of my attention lately. Starting with the iPhone, we have seen how a well-designed device, fast (3G) connection, and app development/download platform have done for mobile users what broadband did for Internet access. Consumers are used to upgrading their mobile devices rapidly, and the draw of smartphones is expanding rapidly. Nielsen recently projected that U.S. smartphone penetration will surpass 50% in 2011.

Naturally, with the growth in users and their use, marketers want to connect with consumers, and big and small companies alike are jumping in to fulfill this new need. Google and Apple are at the center so far, with an ecosystem of technology startups and traditional marketers leaning in to play ball. But their approach so far is much different, and shows some of the challenges of launching a new marketing platform with meaning. I wanted to take a few minutes to explore their choices and differences so far.

Google Mobile Advertising

Google got in recently with its purchase of AdMob, a company that has worked with many common apps to place ad units onto the screen.

What Works

  • Google has applied its $20 billion-a-year AdWords model to the mobile space by creating a simple, self-service advertising process that allows big and small companies alike to put ads on the market in minutes.
  • These ad units can be served according to location, fit well with the existing measurement services that companies already use Google for, and results can be compared easily across platforms.

What Doesn’t

  • The consumers’ experience is pretty poor at a “moment of truth” when ads start to appear on their favorite apps. Because anyone can advertise on Google Mobile for pennies, it will attract some of the worst advertisers in the market. Chegg textbook rentals are relevant for a tiny percentage of Pandora users, and several friends of mine have been served an “Are you the father?” banner ad.
  • There is no room for creativity in the platform so far. The simple text ads look starkly poor when placed within some of the best apps, such as Pandora. Such companies are ceding their precious pixels to ad units that degrade the experience for their users. Is it any wonder that I recently saw the ad below on Pandora, advertising its ad-free model–and this banner looks a lot better!

Apple’s iAd Platform

Apple, too, got into the mobile marketing game by buying another company. It acquired Quattro Wireless earlier this year to get into the game. However, its approach has been entirely different from Google–befitting a company that trademarked the expression “Think Different.”  The company announced that it was shutting down Quattro’s existing business and putting all of its developers into building out a completely new iAd marketing platform. While Google/AdMob tacked on something quickly to its existing business, Apple is taking time to do for mobile marketing what it has done for laptops, MP3 players, and mobile devices.

What Works

  • The actual ad units are rolling out slowly, but are rich media that is designed to take advantage of the unique properties of the iPhone and iPad platforms. You can see from the video below in which Steve Jobs shows a couple of mockups of ads for Toy Story 3 and Nike.
  • Apple is ensuring that only large, committed advertisers are getting into its new platform. It is inviting a handful of big, mass marketing spenders such as Unilever, Disney, Nissan, and Citigroup. It is also forcing the companies and their agencies to work through Apple’s development process. This means that when you see in iAd for the first time, it will probably be something relevant and special.

What Doesn’t

  • If you have an iPhone or iPad, have you seen an iAd yet? Didn’t think so. Because of Apple’s high standards and long production and approval process, there are only a handful of these in the wild to date.
  • There are many other issues with the tightly controlled iAd platform. For example, it doesn’t tie in to existing measurement tools, the ads are non-standard, and the spending commitment and cost-per-click is high for an unproven media.

My take:

As you can see, the two companies’ approaches are virtual mirror images of each other. The strengths of one are the weaknesses of the other, and vice versa. But to borrow from an expression I heard in my first job sacking groceries at Kroger, I think Apple is working hard while Google is hardly working. As a company, Google has made its fortune by creating a simple advertising unit that works extremely well when paired with search–an activity in which the advertising itself can be useful at a key moment when people are looking for the right place to go. But Google had not been able to apply this model to its other tools such as Gmail and Google Docs, in which people are using the software for other purposes. In these spaces, the AdWords are mainly an irrelevant distraction. I see the same in its mobile platform so far.

I like the fact that Apple is working harder to make a more powerful, meaningful advertising platform. I have argued in the past that it will face many struggles, but I like the idea that the company is taking the longer-term view and trying to define a better way ad model. It is not choosing the easy path of slapping on an acquisition or an existing model just to be “first” in the marketplace. I still believe that most marketers should develop actual, added-value apps themselves versus buying interruptions on the iAd platform, but I am encouraged that Apple is thinking differently and putting its thoughts into real action.

Special Author’s Note: If you have read down this far, you are likely a regular reader and enjoy this content. If so, you probably noticed that I’ve cut back the number of posts I write each week–dropping down from three posts per week to about one. This is intentional and will be the pattern going forward. I love blogging, but have got some other big, Marketing-with-Meaning-related projects that are forcing me to cut back on new content. Plus, I’ve really found that Twitter is a much better place for me to share thoughts, links, and insights in a way that is easier for me to share and for you, dear reader, to consume. Thanks for your readership and understanding!

Back to Marketing Basics at the Blackberry Farm

This year I started a new tradition with our Strategic Planning Group at Bridge Worldwide. We’ve been taking the afternoon of the first Friday of each month to get out of the office and experience something together. While it’s great to do some team bonding, the main reason for these events is to give ourselves some firsthand experience in something new that might spark insights and ideas for the work we do every day. After all, marketing to me is really about figuring out how the world works and what people want. So by getting some new life experiences and seeing people in different situations we can be better at our jobs. Last week I decided to take the team blackberry picking, and the purpose of this post is to share a few things that we took away from the experience.

We spent last Friday afternoon across the river in northern Kentucky at Barker’s Blackberry Hill Winery. It is literally a mom and pop farm located past a maze of gravel farm roads that barely register on Google Maps. We all eventually managed to find the place and discovered a lovely few acres of blackberry vines at the top of a small hill. The older couple who runs the farm pointed us to a pile of buckets and boxes and set us loose picking up and down the rows of fruit. Within minutes our hands were purple from picking the delicious fruit and—being strategists—we all started working out the best way to find and pick the most/best blackberries possible. We shouted tips and discoveries over the vines and smiled as some of our team members’ children shouted with glee. After picking for about an hour we headed back to the small farm shack to weigh our berries and pay for hauls. I think the price was something ridiculously cheap, like $2 for a bucket, and $2 per pound of berries. As we left, the owners gave us printouts of blackberry storage tips and handed out Popsicles for the children.

It was a great afternoon, and we finished it off by debriefing over beers on the backyard deck of one of our team members. There were a few key takeaways that we all agreed on:

  • There is something powerful in the “return to basics.” The more digital we become as a society, the more people will start to feel a desire to “unplug” and have some RL (Real Life) meet-ups and hobbies. And the more things we can consume cheaply, the more people will start to feel a desire to invest time and money in things that are rare and antique, and that take time, skill, and patience to attain. We see this in the rise of knitting shops, organic farming, backyard chicken coops, and letter writing on hand-printed stationery. An interest in growing and picking your own produce is a great example of this return to basics. We enjoyed seeing our hands turn purple and us getting lost on gravel roads just to get a few pounds of fruit.
  • Experiences are everything. One of the quotes that I threw out a lot for our team is that, “For the rest of your lives we will remember going blackberry picking together as a team activity.” I have often written in this blog about the impact of experiences, and data that shows how people value and recall experiences at very high levels. Building on the previous point, at a time when anyone can get anything they want online or in stores, we are compelled to look for the new and the rare in experiences that are truly unique and more memorable than any mere purchase.
  • It is something children and parents can enjoy together. As a parent I can tell you that it seems increasingly difficult to find activities that everyone fully enjoys together. I feel like I have to drag my kids to my favorite restaurants, and they have to drag me to watch the latest kiddie movie at the theater. But blackberry picking is great fun for anyone, and something even more enjoyable when you do it together. One parent’s son said that blackberry picking was like “hunting for treasure” and I think he really nailed something deep for me, too. There is something deep and timeless about exploring the outdoors and discovering the treasures of nature—whether it is a plump blackberry, a turtle in the creek, or that perfect climbing tree.

Of course we also gave some thought to how brands might embrace small farms and handpicked produce to advance their marketing objectives. A few brands are already getting close to this area. For example, Kraft’s Triscuit brand is starting do things to embrace and encourage the home farming movement. At this website, the brand shows a map of home and community farms throughout the country. It is also teaming with an organization called Urban Farming to start 50 community farms, and included seeds in specially marked boxes. Meanwhile, the Cascadian Farms brand at General Mills, which is one of the largest organic food companies, has taken to the Facebook world of FarmVille, where people can grow virtual, branded organic crops.

I think there is a big opportunity for a leading food brand to do more to help create experiences like ours. What if a brand such as Cascadian Farms, Green Giant, or Birds Eye actually discovered small farms near major markets like the one we visited and partnered with them to encourage more people to have a picking experience? There could be various ways that the brand could partner with local farmers—perhaps investing a few dollars to improve their operations or upgrade their websites. (This one for our blackberry farm is broken, for example.)

But the bigger lesson here is that we all need to get away from our desks together once in a while and return to the RL. You just might discover a new way to build your business, and yourself.

Not All Wi-Fi Wants to Be Free

One of the most common complaints among fellow business-travel road warriors is the high cost of Wi-Fi outside the friendly confines of our offices. It’s a topic that comes up continually in hotel lobbies and airport terminals as we struggle to stay connected with the flow of business. We all go through gut-wrenching internal debates about whether or not we should expense the $14.99 for a day of Internet access just so we can sync email and maybe Skype the kids before bed. Why is it—we often wonder—that Wi-Fi is free at Starbucks and McDonald’s, yet we must put up outrageous charges where we need it most—where we are already spending hundreds of dollars for hotel rooms or plane tickets? A recent article in Slate has gained some attention in suggesting that the time has come to free up Wi-Fi at every business. While that would be nice, the law of supply and demand won’t change things, until someone recognizes the opportunity for Marketing with Meaning.

In Slate, author Farhad Manjoo tells the story of how Starbucks was recently pressured to offer free Wi-Fi service because a plethora of its competitors have provided the free access—ranging from McDonald’s to nearly every corner deli and independent coffee spot. He writes that many mid- and low-budget hotel chains have begun to offer free Wi-Fi, including Best Western, Comfort Inn, and Holiday Inn. According to Manjoo:

“The sooner that hotels, airports, convention centers, and other similar places realize this, the happier they’ll make their customers.”

Sounds great, but don’t hold your breath. Just because people want, nay, need something for free does not mean that they will get it. The real purpose of my post today is to remind us that the simple economics of supply and demand come before any Wi-Fi routers go up.

In general economic terms, free services are most likely to occur when three rules apply: (1) the cost to provide the services is low; (2) consumers specifically desire the free services; and (3) and competition is also offering them for free. For example, restaurants provide free salt, pepper, and sugar at your table. The cost of these condiments is very low, people want or need access to them while eating, and because so many restaurants provide them for free it would be ridiculous to start charging. In the hotel market, we similarly see free shampoo, soap, in-room coffeemakers, turndown service, and wake-up calls.

Wi-Fi passes these tests in some cases. In the U.S. at least, Wi-Fi is very cheap to install and provide and it is definitely a service that consumers desire. However, competition is where things get dicey. Restaurants and coffee shops feel the competitive pressure because people have a pretty broad choice of where to sit down and spend their money. One could literally drive by a dozen spots in less than five minutes looking for those that have a “Free Wi-Fi” sign in the window. The same goes for those mid- and low-budget hotel chains, as they are frequently huddled together along the same interstate exit.

But this competitive shopping process is very different for high-end hotels and airports. The competitive options for business travelers are much more restricted in these markets, and Econ 101 tells us that less competition means monopoly-like “rents” can go to the seller. Yep, it’s unfair and economically inefficient when Delta charges $9.99 for Wi-Fi on a one-hour flight, or when your $400-a-night W Hotel makes you pay $19.99 for 24 hours of its horribly slow Net access. But these services become huge moneymakers when you are stuck with few options.

The other free market “failure” here is that most end users of high-end hotels and airfare are not the ones actually paying for the Wi-Fi access—it’s actually the employer who gets stuck with the bill when the expense report is turned in. This is similar to the reason our health insurance costs keep going up—the end patient is agreeing to (or even asking for) medical services that he or she never pays for. Now, just because all three of these guidelines are in effect does not mean that companies will choose to offer free benefits; but it does mean that this becomes a true marketing choice and investment—and I believe this can be one of the most meaningful marketing choices a brand can make.

There is one great airline example about how bucking the charging trend can be a marketing win. Charging for checked baggage is an interesting case where a reduction in competition led companies to cut back on a service that everyone enjoyed for free for years. The few big players—Delta, Continental,  American, and others—are now reaping big bucks thanks to this shift in the market. In 2009 they collected $13.5 billion in “ancillary services fees”—which mainly consists of new baggage fees.

But building on its Brand Purpose of “Democratizing Air Travel,” Southwest Airlines saw a huge opportunity in this shift. It was the one major airline that refused to charge its customers for up to two pieces of checked luggage. Not only did it keep its free baggage benefit, but it created a marketing campaign around “Bags Fly Free.” The results are pretty amazing: Southwest gave up an estimated $300 million in profit by forgoing the fees, but its differentiated service allowed the company to gain an additional 1% share of the market, which translated into $900 million in additional revenue—not to mention earning it ongoing customer trust and brand loyalty at a moment of truth. This was a marketing investment that clearly paid off.

What I find interesting is that it may be that only those services that “violate” my three rules above are noticeable by consumers and should actually be considered marketing investments. When you and all of your competitors offer something it is no longer differentiated, meaningful marketing, but rather just a cost of doing business. At what point does Wi-Fi at a restaurant just become the equivalent of ketchup?

Wi-Fi on airlines or high-end hotels is far from destined to be free, but it does offer an opportunity for brands to stand out by offering it. I am starting to see movements in this direction. For example, last week Sheraton offered me free (but slow) Wi-Fi because I am a Gold Starwood Points member. And Delta provides free Wi-Fi in its Sky Club lounges.

Perhaps there is an opportunity for an airline or hotel chain to differentiate by offering free Wi-Fi credits or codes directly to the company procurement and travel managers who are paying for accommodations at the end of the day. Imagine a loyalty campaign or points program targeting these key decision makers. Working through a travel provider such as American Express, Delta, or the W Hotel could offer free Wi-Fi to heavy corporate buyers. This could help break through the clutter, reward the most valuable end customers, and win a nudge of business when prices are about the same. Another “scale” option is to partner with a company such as Orbitz or Travelocity to show people that free Wi-Fi is, say, a $14.99 value when the price search results appear. A customer might decide to pay an extra $10 for a hotel room when he knows the $14.99 Wi-Fi comes free. And remember, the incremental cost of a hotel offering this benefit is near $0.

You might find it useful to use this post to trigger a thinking exercise on your brand. What is a service that your customers will appreciate, that has reasonably low costs to execute, and that your competition isn’t offering yet? You might just uncover a powerful Meaningful Marketing idea.

Product Demos That Earn Attention

A little more than a year ago I wrote one of my most-visited posts about the power of engaging product demonstrations. If you haven’t read it, take a look. The purpose of this post is to revisit demonstrations with two killer examples that I saw just yesterday morning.

First, there’s the video above of the new Dyson Air Multiplier fan, above. The next chapter in Dyson’s re-think of age-old contraptions, this time we see a playful series of balloons sent through Dyson fans. The result is clever and interesting, and perfectly highlights the reason for shelling out a few hundred dollars for a new fan: It’s simply gorgeous. This two-minute film has been viewed by more than 725,000 people since late May.

The lesson here is that new products can be incredibly interesting. We like seeing what’s new, and continue to spend money on innovative items that can make our lives better. It’s the same reason that people spend billions of dollars a year on products sold in TV infomercials; in fact, I recall TiVo reporting that some of the least-skipped ads are two-minute infomercials.

The second example was forwarded to me from a friend. Instead of a new innovation, this is a series of videos for a brand in one of the oldest commodity product categories on the market: the DieHard battery. You might remember the old DieHard commercials from the ’70s and ’80s that put car batteries in torture tests; for example, this ad in which a car on a frozen lake starts after sitting on the ice all winter.

Now DieHard is back in the demo business in a much more updated way, showing that even an existing brand and category has the ability to amaze. The dramatic movie-announcer-like voiceover is back, but just about everything else is different. Check it out:

There are some other examples of the ads that I love. For example, this one of innovative musician Reggie Watts. It’s pretty easy to measure success of these demos based on the number of views. Reggie Watts is getting up toward 900,000 views, and the Gary Numan example above is at 75,000 in less than a week.

While these companies are polar opposites in many ways, their viral product demos have a few things in common:

  1. Presented in video form, which allows for a full sight, sound, and motion experience as well as easy sharing
  2. Brought to life in very creative ways, not just a side-by-side demo with blue liquid and before-and-after shots
  3. Go beyond the 30-second interruption, allowing space for a story to develop and for content to be enjoyed, on the consumer’s terms

Embrace Benefits for Loyal Customers

On my way back from the Cannes Advertising Festival a few weeks ago a couple of work buddies and I decided to take a break and take advantage of our European travel to stop in London for a day at Wimbledon. I’m not a giant tennis fan, but I love any opportunity to experience a remarkable event. So it was a no-brainer to cross the channel and splurge on a day at Court 1 in this historic facility. But my “Marketing with Meaning” hat never comes off, dear readers. While enjoying the matches and sipping my new favorite summer drink, Pimm’s, I noticed something that sparked this blog post…

In the program for the event I noticed a full-page ad for HSBC—captured by my iPhone in the photo above. As you can see, HSBC offered free strawberries and cream for its cardholders at the matches. It struck me as a terrific example of Marketing with Meaning, and perhaps a new trend that other brands are picking up on.

Another great example of a brand that is providing added value for its loyal customers is Lexus. I recently had a chance to prepare a presentation for a group of Lexus dealers, and through the process of researching their work discovered how many of these independent businesses are similarly doing special things for their owners. For example, in several major cities around the U.S. local Lexus dealers have arranged for free, private parking for its car owners. You can find this benefit at the BankAtlantic Center in Tampa, at the Texas Rangers ballpark and AT&T Performing Arts Center in Dallas, and at the U.S. Open tennis championship.

All too often in banking, automotive, or other businesses, current customers get little care and feeding once the bank account is open or the car drives off the lot. In these and many other industries (e.g., phone service, credit cards, cable TV) a vast majority of marketing dollars are put against acquiring new customers. Marketing managers become completely focused on cost-per-acquisition and churn rate, but rarely think about how the easiest sell is the one they’ve already made.

There is tremendous opportunity for brands to win by moving more of their marketing budgets to the benefit of current, loyal customers. Broadly speaking, there are two main benefits of this approach. First, there is almost always an opportunity to sell more products and services to those who are already buying from you. Car makers can convince you to put another one of their vehicles in the garage or upgrade to a new model faster. Banks have an opportunity to cross-sell countless other financial services.

But the second, often-ignored benefit of marketing to your current customers is that it can be a way to impress and win over new prospects. This ad for HSBC naturally advises current cardholders of a special treat, but in doing so it also shows all non-HSBC customers how well this bank treats its own. Similarly, Lexus understands that free, premium parking means that friends will want to ride in the Lexus owner’s car and thus get a free sample of the riding and service experience. And in both examples, the brand has chosen special, high-end events where the prized, highest-income customers attend.

How might you use marketing dollars to benefit your best customers while attracting prized prospects to your side? Or if you are already providing valuable services to current customers, how might you better show prospects what they are missing?

Looking Back on Our Burning Question at #Canneslions


“Wow!”

That was my first line to kick off our seminar at the Cannes Lions International Advertising Festival on Friday, June 25. “Wow!” is also the easiest way for me to describe the amount of work we put into the event, and the combined reactions of those who had a chance to join our seminar. After months of planning and preparation we pulled off our first-ever seminar in Cannes at the annual gathering of the world’s leaders in advertising and marketing. Although I am still in a bit of a daze since coming off the stage nearly two weeks ago, my mind is already racing to develop ideas for the next big way that we can spread the next evolution of marketing. But before rushing on to what’s next, I want to capture and celebrate what we pulled off here.

Before I go on, though, I suggest that you invest the 45 minutes to view our complete seminar footage, which is up and available here. Or if you’re really time-strapped, first check out some highlights in the YouTube video above.

Recap

Way back around October 2009, our President, Jay Woffington, and I had lunch with Jim Stengel, former Global Marketing Officer of Procter & Gamble and now global speaker/consultant and professor at the UCLA Anderson School of Business. My book had just launched and Jim was continuing to spread his belief in brand ideals. We talked about our common desire to change the way marketing is performed, and we agreed that there was no better place than the annual Cannes Advertising Festival—a place where advertising and marketing leaders from around the world gather once a year to judge the best work, compare notes on where the industry is going, and bring back lessons that might be applied to the incredible changes surging through business and society today. We decided to team up and the folks at the Cannes Lions organization were excited to have us onboard for a seminar in late June.

In retrospect, deciding to do a seminar in Cannes and getting agreement from its leaders was the easy part. The real challenge lay in deciding what to do on our big stage. Thankfully we had some help. Two of our top creative leaders at Bridge Worldwide, Jason Bender and George Alexander, came up with the idea of asking a Burning Question. They argued that people in our industry are spending too much time searching for answers to questions such as: “What percentage of my budget should I spend on digital?,” “Do I need a new ad agency?,” and “What should my Facebook strategy be?” They reasoned that marketers are spending too much time looking for answers in new media tactics, and are therefore missing the big, fundamental shift that is happening in business and society. Their idea was for Jim and me to ask our Cannes audience a Burning Question, that, when asked, could help organizations hit the reset button and fundamentally adjust their methods to not only improve business results, but also improve life for customers, employees, stakeholders, and society overall.

To prepare for the event, Jim and I set up interviews with key leaders at some of the world’s largest marketers in the world. We were blown away to get 100% of our requests accepted from IBM, AT&T, Kraft, P&G, Levi’s, Luxottica, Pepsi, and Samsung. We flew camera crews around the country to ask these leaders our Burning Question and learn about how they recognized a need for change, the initial efforts they are making to shift, and the business and stakeholder benefits that are resulting from these early efforts. We were surprised to hear similar stories, and eager to share them with our audience in Cannes and beyond.

And to engage with more than the relative handful of folks who can go to Cannes, we sought to bring marketers around the world into the discussion. On BurningQuestion.com we asked people to post what they believed are the questions we should be asking ourselves. And we even ran a contest to bring two people over with us based on their personal efforts to improve the marketing world. Our winners were Stan Phelps, who is pioneering a new way to “give a little something extra” through his Marketing Lagniappe project, and Tyson Adams, a budding “philanthroprenuer” who just started a business called liveGLOCAL, that sells high-quality coffee and provides books for children in Laos for each bag sold. Both guys are incredible leaders who will continue to drive the next evolution of marketing in their own unique ways.

The Results

After a week of final-final preparation and taking in the other seminars and award-winning work in Cannes (see my blog posts here, here, and here), I was very eager to finally take the stage on Friday. Overall I was very pleased with the seminar. As you can see in the full-length video, we did a lot of things to drum up excitement and ensure that no one was disappointed to be sitting in our session on a Friday afternoon. I think we were able to weave together many threads that were running through Cannes all week and give the group something to thinking about, our Burning Question:

“How can we, in marketing and business, hold ourselves to a higher standard to create a positive impact on those we serve, our employees, and even the world?

After the seminar we invited everyone in the audience up to the roof of the Palais to continue the conversation. I loved the chance to meet people from places as diverse as Ecuador, Turkey, India, and Australia—all struggling to figure out where the marketing world is going, and all coming away with some new thinking that they can apply to their brands and businesses. I gave away a few hundred copies of my book and collected a pocketful of business cards from potential clients, partners, and even competitors who wanted to keep talking about how we might work together toward this common goal. (Check out some of the after-seminar photos below…)

I find that it’s always hard to look at the time and money investment of an event like this and figure out if it was worth it. This was the biggest thing our agency has ever put on, and ultimately we are betting that by driving the industry conversation forward we will attract new clients and further build our business. Just like all of you, we are betting that we will succeed by creating Marketing with Meaning.

The work is not over, however, as we’ve come back down to earth and back to our desks and day jobs. We are working on plans to further share our seminar and the hours of amazing interviews footage with industry leaders. Jim and I even have a few requests to repeat the performance at industry events and corporate training facilities.

And, of course, I’ve already started thinking about what we could do in Cannes next year. I think the topic will only be hotter in 2011, and we want to continue to build on the momentum we have started. I would love your ideas and feedback in the comments below!