Crowdsourcing Is Not A Viable Business Model And Here's Why

Crowdsourcing is to 2009 as Twitter was to 2008. It was the sparkly object that many assumed was the second coming.

I'm a little sick of it, to be honest.

Don't get me wrong - I'm all for innovation. But I'm not for innovation without strategy, without a vision that goes past the next few month. Crowdsourcing is the fool's gold of internet business models.

This ire has been building, but is partially due to reading Rick Liebling's new e-book Everyone Is Illuminated. Rick has been doing some brave thinking about crowdsourcing and I applaud his effort with this e-book. It's other experts I take issue with.

Which experts am I talking about? The ones who claim that crowdsourcing will replace agencies. Those who think you get better ideas from the crowd than individuals who study this process everyday. If that's you - you're in my sights.

This is all to support Rick's point that crowdsourcing is a means, but not as an end in itself. That gem of an insight is a hard truth proven by what has worked...and what hasn't worked.

What Could Work?

As far as I can tell, there are two things that crowdsourcing does correctly, which Wil Merritt, CEO of Zooppa describes on slide 30:

  1. High levels of consumer brand engagement
  2. Insights that brand communications generate

Well, that's true if everyone keeps participating. Sweepstakes have a long history of success, but those usually require 10 seconds of thought - not the hours required for most advertising/marketing efforts. For every winner, you produce thousands of losers who just wasted their time. Not exactly inspiring.

(These two benefits are likely preaching to the choir and the insights are from a small vocal minority, but whatever...)

But OK, let's assume these are true. I will give you those two points. Now let's look at what crowdsourcing doesn't do.

What Definitely DOESN'T Work

It may have been said before, but let's review what crowdsourcing definitely can't do for you:

  • Brand strategy - The insight and planning that lead to long-term success.
  • Integrated campaigns - Want your campaign to work across print, TV, and web?
  • Production - For all the hype about things being easier to produce these days (and they are), can your crowdsourced winner write, design, and use motion tools? Doubtful.
  • Measurement - Who is pulling your data and analyzing it? Not the crowd.

These are just a few..."pain points." But it's a tough reality for the most optimistic of a very idealistic people. Idealistic to a fault, in my opinion. Take this quote from Zooppas' Merritt again:

"Today CMOs like to claim that the true owners of their brands are customers [True]. If they truly believe this what could be better than to allow customers to create their own messaging about the brands they own and love, and to enable them to share enthusiastically these messages with their friends and family."

OK, there are two things here.

For one, no one's trying to stop anyone from sharing messages. In fact, social media strategy is all about getting others to share your message. That's not revolutionary.

Secondly, what kind of logic is this? I believe my teeth to be my own; that doesn't mean I should give myself a root canal! I'll leave that to the experts.

WHY Won't This Work

Should agencies be concerned the crowd will steal their jobs? In short: no.

  • The Work (Usually) Sucks: Rick is totally correct when he says, "I don't think crowdsourcing creative content is going to raise the value, and therefore fees, of creative work." Doritos might get lucky once, but after that commercial airs, so what?
  • The "Pay" Sucks: John Winsor, CEO Victors & Spoils, had this to say about a crowdsourcing price model: "Get more, pay less" (slide 6). That's more of your work, while paying less money to you. Sound awesome, right?
  • The "Side Pay" Sucks: Rick points out that this is more of a zero-sum game - like Highlander, there can be only one (winner). It's not like the World Series of Poker where pros eliminated early could make money off other marks.
  • The Lack of Perspective Sucks: Evan Fry, also of Victors & Spoils, tells the story of Steve Jobs' horrendous iMac name which a long-term agency partner was able to dissuade him from using (slide 20). You don't get that brand strategy perspective from the crowd.
  • The Brand Guidance Sucks: Spike Jones speaks some truth (slide 24):

"So you REALLY want to base your entire brand...on creative that is pinned to a two-sentence description of what you're looking for? By a bunch of people that want to make a quick buck?...Now do you really think that you are going to get anything of value?"

Means, Not Ends

All due respect to Rick, but I think he buries the lead in this ebook (as have I...duly noted). The real key insight here - and I haven't heard this from others - is that crowdsourcing is a tactic, but not a viable business model.

Rick states it succinctly (slide 44): "But I fear that many brands are using crowdsourcing not as a means, but as the ends."

That's the key idea. Sure, get the crowd involved; solicit their opinions. That will provide the engagement and insight.

But handing over the keys to your brand and letting the crowd control it? No way.

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7 Reasons To Stick With Agency Smarts Rather Than The Wisdom Of Crowds

Baby in bath

I was catching up with my Beancast podcasts yesterday morning at the gym and found episode 71 to be a real gem.

In this podcast, there is a fascinating story about Unilever's brand Peperami forsaking their agency in favor of a crowd-sourcing/consumer-generated content method (found around minute 53 of the podcast).

As this blog is a celebration of new media and consumer control of brands, you might think I'd laud this as a great move. Surprisingly, you'd be dead wrong.

Before I launch into why I think this is a bad decision, let's get a couple of assumptions down:

  • Yes, I work at an agency. But please presume that I am able to take an unbiased view of this story as (I like to think) I do of anything else I write about here.
  • I don't know anything about Peperami's agency, Lowe. They could have been doing a dismal job, but that's immaterial. The issue of this post is whether the wisdom of crowds (hat tip to James Surowiecki) is better than an online marketing agency.

On the Beancast, the guests discuss how Lowe, the agency in question, created the "Animal" campaign for Peperami which was terribly successful. But, once the campaign was up and running, Peperami felt that the agency was no longer necessary.

Crowdsourcing is really cheap while agencies can be expensive. Crowdsourcing is in; traditional advertising/marketing agencies are hurting.

So why in the world is it smarter to stick with an agency rather than outsourcing your marketing needs to the community?

Just like stage-diving, it's sometimes stupid to trust the crowd. Here are 7 reasons to stick with your agency rather than crowdsourcing your marketing.

  1. Repeatability - Your agency gave you the big idea - You've Got Milk, you'll Just Do It, you're Living Strong. What happens when you wake up the morning after that idea has gone stale? Where does the next big idea come from? Who knows the history of your brand? A 15-year-old with Photoshop? Good luck.
  2. Scalability - As in the Peperami example, let's assume a campaign is already established. What happens when it explodes on a global, rather than just national, stage? Are your servers prepared? Can you translate it? How many banner ads can you create per hour? How many consumers can you help? If your agency's ideas are as good as they should be, consider who manages these tasks when they're gone.
  3. Staffing - Speaking of help, who is doing the day to day work after you fire your agency? It isn't the crowd, believe me. Can you hire developers, designers, copywriters, and anyone else you need, all at a moment's notice? Agencies have experts like these ready whenever you need them. You...don't. (Not to mention needing someone managing the brilliant crowdsourcing experiment too.)

    Consider the Ajira Airways site. This airline doesn't exist - it was created solely as an immersive experience for rabid LOST fans, courtesy of ABC (only noticeable in the footer). That unique experience is simply impossible for a guy in his basement to create while aligning this creativity with business objectives.

  4. The Ruse of Savings - Bill Green, Publisher of Make The Logo Bigger, added this insightful comment on the podcast:

    "It's not that they [clients who drop agencies in favor of crowdsourcing] want better ideas. They want cheaper [ideas].

    Creative has always been the lowest priced - when you're doing TV, they're going to make their money on the TV end of it and the production end of it. You can't tell me that they aren't still going to have to go out and get a production house and buy the media. None of those elements are going to discount their price.

    They're not saving anything by doing [crowdsourcing]. I find it ridiculous to say that 'We'll go out and find a couple of kids just out of art school to come up with our ad campaign.'" (minute 104)

  5. Accountability - If you work for a public company, you probably need to clear this decision with someone. At the highest levels, that's the stockholders. Are you prepared to tell them that your marketing budget (though reduced) is now being funneled to a retiree who won your crowdsourcing campaign? Plus, if it goes sour, you just replaced your agency's head on the chopping block with yours. Have fun with that.
  6. Safety - The agency I worked for previously dealt only in online marketing for rare or orphan diseases. The writers and designers on staff had the experience to keep the clients from any trouble with the FDA or other regulatory bodies. The client often didn't realize this. Like a lot of other good pharma-familiar agencies, it was just a value-add. There are companies in many industries that need this kind of guidance from their agencies.
  7. Decency - OK, this is just my opinion, but I certainly would not work for a client who made such an illogical, but hugely impactful, decision. To make a move to a new, better agency I can understand, but thinking you can handle it all requires such hubris that I'd be hesitant to deal with that company. Ever. If other marketing folks are like me, you'd better pray that this crowdsourcing experiment works out.

Maybe Peperami believed the social media pendulum had swung far further than it has. By that, I mean the strength of the consumer in regards to ownership of the brand.

Wise up. From Mitch Joel:

"The idea that the consumer is now not in control is anathema to what most people think. The general drum-beating is that the consumer is in control, not the company. But it's not true." (page 94)

Someone still needs to guide the strategy. Someone needs to come up with the big ideas, the tag lines that seem so easy your mother-in-law could create them (but somehow, she never does). Someone needs to stay up to date with emerging trends, new technology, and the ever-evolving world of media.

Is that you?

If you're in charge of a big brand, or can't do it all no matter your size, perhaps you'd better take another look at your agency. Maybe it's not the right one for you. Great, change up - it happens all the time.

But throwing the agency baby out with the marketing bathwater - that's just crazy talk.

What do you think? We would love to hear your thoughts in the comments section below.

P.S.: Brian Sheehan has some good comments about collaboration regarding this story.

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Super Bowl 2009 Ads - Social Media Engagement In The First Half

family-watching-television

$3M for a 30-second ad?

Sure it's crazy, but unlike in years past, advertisers have the opportunity to make that $3M work for them long after Super Bowl memories have faded.

First, there's the initial press. TNS Media reports that Super Bowl advertising has huge holding power. Data shows that people do wait to see the commercials all the way through the game. Then for a few days after, you get tons of online conversation swirling around your brand. (TNS was also able to rank the total media coverage last year - it will be interesting to see if these 10 brands lead the pack in terms of social media integration this year.)

But, for all its holding power, the Super Bowl is over within a few hours. How do advertisers get their money's worth? How do consumers create dialogue with select brands?

Getting The Most For $3M

Of course, the real way to really get the most for that $3M is to engage your customer. I mentioned previously some of the ways to engage your audience online and I've been tracking these attributes during the game. Here is what I have been watching for:

  • Pre-game engagement: Could customers submit their own ads in hopes of having it shown? Was there any aspect of user-generated content (UGC)? Did the brand allow customers to vote on which ad was shown?
  • During-game engagement: Was a URL displayed during the ad to drive traffic and attention to the brand? Where there opportunities for real-time interaction? Were customers encouraged to vote or otherwise voice their opinion?
  • Post-game engagement: Were there opportunities to engage the audience after the game? Could customers join a social network? Could they sign up for a newsletter featuring advance product information?

The Run-Down

Here's my list for the first half of Super Bowl 2009:

Second Quarter:

  • Land of The Lost (Movie Trailer): URL (LandOfTheLost.net)
  • Doritos (Power of crunch): UGC (Crash the Super Bowl)
  • GoDaddy (Danica): URL, commercial continued online (GoDaddy.com)
  • Pepsi Max ("I'm good"): URL (RefreshEverything.com)
  • Pedigree (Get a dog): No engagement
  • Budweiser (Horse brings branch): No engagement
  • Budweiser (Horse love) - 60 secs.: No engagement
  • Star Trek (Movie trailer): URL (StarTrekMovie.com)
  • Gatorade (Mission G): URL (MissionG.com)
  • Cars.com (Confidence): No engagement in commercial, but ad protagonist does have Facebook page
  • Hyundai Genesis (Yelling):
  • eTrade (Babies): URL (eTrade.com)
  • [Good call-out to NBC.com and Hulu]
  • Pixar (Up): URL, Verbal ask to go to Disney.com
  • Bud Light (Chalkoard): No engagement
  • H&R Block (Death): URL (HRBlock.com)
  • Teleflora (Talking flowers): URL (Teleflora.com)
  • Cheetos (Pigeons): URL with prominent written call-out (Cheetos.com)
  • Monsters Vs. Aliens (Movie trailer): URL (MonstersVsAliens.com)
  • Sobe (3-D dancing lizards): No URL, but bought Google ads against Monster vs. Aliens and sending traffic to branded Sobe YouTube channel (hat-tip @Scorecard)

Did I miss anything? Feel free to leave comments below if I left anything out or misreported on an ad. If you'd like to follow along in real time, you can find me at @MarketerBlog. I will post the second half's analysis directly after the game.

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Nothing Funny About A Good Online Video Business Model

Courtesy of gapingvoid In their new September issue, Fast Company magazine features a fascinating story about the comedy web video business and how it's almost impossible to make these websites profitable.

They lay out many of the current business models, but I think an addendum is useful. In this post, I will outline a mindset that hurts that industry, what the current business model is and why it doesn't work, a suggestion to ensure profitability, and the business model that can make an online video site profitable.

First, The Mindset

We tend to think about web videos as a "thing." It is a product. It is content.

Forget this mindset. If you're a video producer, web video might be a tangible thing that comes from tangible people sitting around your tangible office. But it's not.

For your audience, web video is an experience. There's no actual product for the viewer - the video elevates the spirits or gives us hope or connects us to others. It has more in common with a trip to Disneyland than it does with buying razor blades.

So stop thinking of a video as a commodity and start thinking of it as an experience you provide for your viewer.

Second, The Model

As the Fast Company article points out, the prevailing business model is advertiser-based. This has been the case for most things in the U.S. for more than half a century.

However, the advertiser business model cannot support web video. Consider it: the marketplace is fragmented, niche sites have the most loyal visitors, online is still new to many advertisers, audience has a decreased appetite for ads, and the content (at least on the comedy sites) is oftentimes...edgy, to put it diplomatically.

Even off-shoots of the advertiser model don't work, such as product placement and sponsored shows. The huge conglomerates that have the money to invest in these small comedy sites only know these sorts of models - give the product away in exchange for some advertiser time.

No matter how many times you throw money at the problem, this business model still doesn't work.

But that doesn't mean web videos will never be profitable. (Misters Murdoch and Branson, please have your assistants print out the following explanation.)

One Suggestion

First, just a suggestion: keep the suits as far away from the video production as possible. Nothing kills comedy like business people.

You want to appeal to college kids? Hire college kids or recent grads to do the show. Fast Company points out the CollegeHumor.com, a site still operated by the creators, plays well with YouTube and still cleans up at the bank.

"The site has attracted advertisers such as Motorola, Fox, and Subaru and reaped $4.2 million in ad revenue during the first quarter of the year. CollegeHumor is profitable - the only profitable major comedy-video site."

You do what you're good at and hire people to do what they're good at. (This applies to most businesses, not just online video, by the way.)

One Solution

OK, you've been waiting for that business model that will work better than advertising, right? This is how major media companies can succeed with online video.

Here it is, step by step, just for you titans of business:

  • Take all the money you would spend on focus groups and market research.
  • Invest this money into your online video business.
  • (Once the site is up, collect the bits of ad revenue and re-invest it.)
  • Use the website to do all the market research you would have done for your other shows.

Web video sites can be profitable when the "product" is not the web video. Websites are the perfect venue for market research. You can find out anything you want - people are dying to share their opinion for free!

Can't decide between jokes for a sitcom? Film them both and let the website audience vote. Feature pilot shows on your website and only air the most popular ones. The money you save from traditional research and focus groups (much less money lost in terrible shows you would have aired), will more than pay for your video website.

Eventually the website might make money and that's fabulous. Until then, use it as a seed bed. Test out new acts, try out new jokes, ask your audience's opinion, and gauge their interests. Web video sites can have immense value if they are viewed as research laboratories instead of content production facilities.

But what do you think? Maybe advertising just isn't being done correctly for these online comedy sites to become profitable? Maybe a subscription model like The Bitterest Pill podcast would work? Let me know what you think in the comments section below.

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Writing Content In A Web 2.0 World

You've heard all the hype about Web 2.0, but what does it all mean? How will it affect your business? How do you communicate with potential readers and customers in this new era?

My free white paper, Writing Content in a Web 2.0 World, answers these questions and:

  • What exactly is Web 2.0?
  • How should your writing style change?
  • How has online interaction changed and what will this mean for the future of business?
  • What is the secret new currency in this market?

Download the white paper here: Writing Content in a Web 2.0 World

(The white paper is in PDF format. Download the latest version from Adobe here.)

And of course, please join the conversation! Leave comments here with your thoughts and suggestions for this or future white papers.

I considered requiring you to subscribe to my enewsletter to download the white paper. After all, if you were interested in this subject, it's a sure bet you will be interested in my other content.

However, I've decided that this requirement does not fit well with my overall strategy or the community environment found in a Web 2.0 world.

Rather, I would just ask that you consider subscribing via email or RSS. Thanks!

eNewsletter Winners and Losers: Threadless vs. The New Republic

In the inaugural eNewsletter battle, I pitted Moosejaw vs. Cool Hunting. Today, I'm placing two more eNewsletters in a Mason jar, screwing on the cap, and shaking it until only one remains. The winner: ThreadlessThreadless 1 small

Threadless is an online t-shirt manufacturer based in meat-space in my new home, sweet Chicago. They also possess an undeniable cool factor and loads of fun-ness. Here are some reasons why you should sign up for their newsletter:

  • Threadless' business model is based on a Web 2.0 mindset. They have a constant open call for t-shirt designs which are then voted on by the community. The top vote-getters are made into shirts and sold online (and a recently opened retail store). Plus, they've thought through the process from the buyer's POV: even if a shirt is sold out, you can vote for it to be re-made and notified when it is.
  • Because new design are always being voted on and shirts made, Threadless boasts a constantly changing inventory. That means the eNewsletter is always fresh and innovative.
  • They offer incentives tThreadless 2 smallo draw the best designers for their business. Winners make money if their design is chosen. This avoids a slew of "Don't tase me, bro!" knock-offs.
  • Simply put, Threadless gives props. The eNewsletter starts (after a helpful index) with that week's winner (image #1), followed quickly with the four new shirts being printed that week (image #2). This puts the best material above the fold, and creates buzz machines of the featured designers. Plus, it further stimulates the community. Everyone loves feeling like they voted for a winner.
  • Threadless uses what they've got. They turn designs into art and advertise it in the eNewsletter. They get corporations and bands to sponsor shirts (i.e. "Iron & Wine <3s Threadless"). They podcast about, you guessed it, t-shirts and cool stuff.
  • Recently, they have been adding local elements. Image #3 shows a recent art show they held in their retail store. This gets (possibly new) groups of buyers in their store, gives a boost to a local artist, and generates oodles of street cred.
  • While they don't feature it in their Threadless 3 smalleNewsletter, they do offer space for regular folks. T-shirt buyers can post photos of themselves wearing the shirt on its order page. Forget models: these people are hot, creative, and the best possible influencers for the brand.
  • The eNewsletter is an accurate reflection of the brand and tells the same story. In the best of worlds, your outbound communication, website, retail store, brand, etc. all has a consistent tone, message, target audience, etc. Threadless lives in the best of worlds.

The loser: The New Republic

The New Republic (TNR) is a centrist-leftist twice-monthly journal of politics and culture. It's not a bad magazine per se, but the eNewsletter is all types of awful. [Full disclosure: I used to work for a competitor/ally magazine.]

  • It doesn't say anything. Most of the content in the eNewsletter is a list of recent blog posts. However, with the all-too-clever titles, it's usually impossible to discern what a particular blog post is about. What other critical information do they provide? The time and date?! Who cares? Let's assume that it would be a wise business practice to increase your writers' fame. Maybe you should list the author's name next to their post. Then, I could follow along day to day and learn who I especially like. Encourage fans; don't make it more difficult for them.TNR small
  • The eNewsletter suffers from premature erudition. In other words, its info comes too soon. Barely have I finished reading yesterday's edition and another is at my doorstep. Relax. If you publish twice per month, don't feel pressured to bang down my door with your email every single day. I don't want to start taking you for granted, baby. (Don't worry, premature erudition happens to a lot of eNewsletters. Honest.)
  • Ads galore! I would love to see how much space is taken up with ads versus content in this email. I count one banner at the top, two banners along the side, and there was another ad at the bottom that I cut. Add in the masthead and there's not much space left for actual content. Imagine a television show where more than half of the running time was taken up by ads. Would you be more or less enticed to watch it? Cripes.
  • This might verge on petty, but my last point is simply to stop trying to be all things to all people. Not many magazines do well with both politics and the arts and you're not The Atlantic. Being center-left just makes everyone annoyed. I'm a big fan of picking one thing and being the number one resource about that thing. No offense TNR, but you just aren't definitive enough for me. (Oh, and that ship logo is bizarre.)

Is there an eNewsletter that you think is due for some praise or derision? Send me an example at ireallylikerobots [at] gmail [dot] com and it might be featured in the next eNewsletter battle.

Super Bowl Ads Fumble

Hey, remember the Super Bowl and all those cool ads? Yeah, me neither. I could have bookmarked the URLs of company's whose ads I enjoyed or told my friends about cool microsites I experienced, but I didn't because the web was largely forgotten in this year's ads. URLs were printed small and almost always at the end of the ad, there was only one example of user generated content, few (if any) microsites to continue the experience after the game, and generally poor use of search. What a waste of $2.7M.

Michael Estrin of iMedia Connection has a good wrap-up and several interviews of note. The question he pursues: where was the web? From Estrin's article: "It was like we went backwards this year," says Sean Cheyney, VP of marketing and business development at AccuQuote. "It's like we're moving back into silos. I was surprised that companies didn't do more integration. The web was an afterthought for most of the ads."

Beyond the 30-second Spot

AOL's Annual Super Bowl Sunday Ad Poll ranked the Bud Light Dalmation-Clydesdale-Rocky ad was America's favorite, yet it did not even have the requisite web address at the end. Here are a few quick ideas of ways you could have capitalized on this success (call me for more - my freelance rates are very reasonable):

  • Contest to name the Dalmatian and Clydesdale
  • Start a rivalry between Bud and Bud Light (represented by the dog and horse) similar to the Bud Bowls of the 90s
  • MySpace page wraps in spots (Dalmatian) and tough-guy horse stuff (Clydesdale)
  • Facebook app that allows you to send a Bud Light to a friend
  • Advertising tie-in with the new Rambo movie (I imagine there's audience cross-over with Rocky)
  • Jab back at the new Miller Lite spot featuring...Dalmatians and Clydesdales
  • Create a site where you integrate this ad with other Bud Light Super Bowl ads (have the dog breathing fire, the horse flying, etc)

Budweiser, what do you pay these marketing guys? Hire me or any 15 year old and you'll get more web marketing bang-for-your-buck.

Failure to Launch

Any marketer worth their snuff - nay, conscious in the last year or two - knows that search is an integral part of any campaign. So, why this MediaWeek report:

"70 percent of Super Bowl advertisers bought some paid search ads on either Google, Yahoo, MSN – up close to 20 percent versus last year. But just 6 percent of advertisers used their 30-second spots to direct viewers to the Web, and the vast majority (93 percent) failed to buy search ads for alternative terms that were related to their ads, such as their spokesperson’s names, slogans or taglines."

MediaWeek is reporting on a Reprise Media scorecard that goes into more detail. I find it amazing that roughly 93 percent (of the 70 percent who bought ads) failed to think of these ads from the user's perspective. Your uncle Jimmy had knocked back a six-pack and was in the grip of a food coma when he saw Naomi Campbell dancing with a bunch of lizards. When he stumbles to the computer, he is not going to search for SoBe Lifewater. He's going to search for "hot model and dancing lizards." Little surprise that SoBe also ranked as a "fumble" on Reprise Media's scorecard.

I Get By With a Little Help From My...Oh, Forget It

Only Doritos had the cojones to use user generated content. Despite it being ranked near the bottom, I thought the ad was okay. Doritos had a nice intro to the commercial, but I would have loved to see it end with the singer crunching into a Dorito. Cheesy, perhaps, but so is the product. My message to Frito-Lay/PepsiCo (who own Doritos): Don't be rash in firing your advertising company. It is better to work with someone willing to take the big risks and use the medium that appeals to your audience. These are the folks with the potential to blow people out of the water.

Also, not a single advertiser drove viewers to their MySpace or Facebook page - there was zero social networking involved. Believe me, this isn't because people aren't using Facebook anymore.

Fox did drive people to www.myspace.com/superbowlads though, which is a nice way of increasing the ads value with a measurable online component. Of course, for $2.7M, I'd be wanting a little something extra too.

No one is complaining about a game of two huge franchises in the largest media markets where one of the teams has the chance to have a perfect season (and finally shut up the '72 Dolphins). But if you're an advertiser and next year pits the Titans versus the Buccaneers (no offense guys, but come on), you might want to start thinking about your other options. Joe over at Junta42 has some great ideas for how to spend all that cash.

Online Life Game Amalgamations - Marketing To Detectives

Have you ever played an ARG? You might have and never known it. And it could be the most addictive thing in marketing in the last few years. ARG stands for "Alternate Reality Game", as written about in the January issue of Wired magazine. Just this past weekend, I stumbled upon one while trying to figure out what the heck the movie Cloverfield was about (after clicking the link, see the "viral tie-ins" section at the bottom).

First, let's get rid of the name. Alternate Reality? This ain't the mid-90s. Besides, it's not even accurate; there is nothing alternate reality about this process. I propose Online-Life-Game Amalgamations: OLGAs. Besides being more accurate (that these products operate online, in real life, and within a game in tandem), from a marketing perspective, doesn't OLGA present a more pleasant image/sound in the mind than ARG?

OLGAs differ from other marketing efforts because rather than trying to breach the consumer's interest through volume (push), they draw people in (pull). As the Wired article states, "That's why [Weisman, the 'creator' of OLGAs] opted for a 'subdural' approach: Instead of shouting the message, hide it." Thus, the consumer becomes a detective. Much like National Treasure, The Da Vinci Code, or anything by the immanent Paul Auster (especially The New York Trilogy), the author becomes part of the story, deciphering clues s/he had not realized were in plain sight, and needing to know not just where to look but to look at all. Again, from Wired:

"These narratives unfold in fragments, in all sorts of media...the audience pieces together the story from shards of information. The task is too complicated for any one person, but the Web enables a collective intelligence to emerge to assemble the piece, solve the mysteries, and in the process, tell and retell the story online. The narrative is shaped - and ultimately owned - by the audience in ways that other forms of storytelling cannot match. No longer passive consumers, the players live out the story. [my emphasis]"

You can read the article for background, examples, and a history of OLGAs, but I would like to flesh out three principles in this emerging field.

  1. Definite entry points: All of the OLGAs I have read about have definite entry points, though ideally multiple mediums would be used. The examples of the Nine Inch Nails Year Zero campaign used multiple websites, a message on an answering machine, and flash drives hidden in restrooms at concerts. The multiple mediums almost act as second opinions - they build off of each other and support the legitimacy of each other.
  2. Seamless integration into life: OLGAs derive some of their appeal from the way the games fit into a player's life. After a threshold of suspension of disbelief, these games feel very real. You are not going to a "puzzle" webpage and "playing." You are solving puzzles in real time with other people online.
  3. Less Is More: OLGAs succeed from a marketing standpoint not only because they do not feel like marketing, but because they do not beat their message into the head of the consumer. In this instance, whispering is better than shouting.
  4. OLGAs must be fair and have (some sort of) a conclusion: OLGAs tap into a primal human desire to solve things. From a dissertation on Paul Auster's novels: "As another version of teleological classic art, detective text is obsessed with closure; the end comes not only as a salvation of the reader but at the same time gives reassurance that the reader is not be wandering in a wilderness of ambiguous signs. Everything that happens in a detective story must be placed under the perspective of a final truth."

      OLGAs are not for everyone: both creating and playing. Companies should realize the immense amount of work involved - from scheming it up, to creating content, to placing clues in the real world, to monitoring players' progress. OLGAs burn through a lot of time and money. Likewise, companies should understand that their OLGA may not reach a huge number of people. Gauge response less on the number of people involved and more on their fervor. Remember that the fanboys are the ultimate evangelists.

      Finally, here's an article from MTV detailing some recent OLGAs. The critic confuses OLGAs with stupid publicity stunts, putting them both under the rubric of unconventional marketing. Truly unconventional, yes; but also in a class all of their own.

      Good For Consumers (And Businesses): Social Media Gets A Glimpse Of Measurable ROI

      We recently had one of the worst weeks ever. It included (but certainly wasn't limited to) taking the car in to replace an insanely expensive hose, losing our heat during a Chicago winter, getting sideswiped by a Chicago trolley right after leaving the dealership, and the subsequent arguing with and lying from the trolley driver to the cop about how she was not involved. Needless to say, there were not a lot of bright spots in the week. But when the dealership tried to squeeze another $470 from us for a CV boot, I did a little research. Yelp.com and a few other sites extolled the virtue of the mechanic right down the street. He did the job in a couple of hours for $188. Amazing.

      What does this all have to do with online marketing? Well, I was not surprised when I read this study from comScore. Not only are 1 in 4 internet users consulting reviews before purchasing offline, but they are willing to pay more if the service is ranked as excellent. It seem that after the year of exuberance that was all about Facebook and twitter, business is finally getting around to answering the question of how social media effects ROI.

      If you have been questioning this yourself, you are not alone. I have seen at least 5 webinars in the past week and a half on this question alone: How do we determine our ROI on social media? And there are two distinct undercurrents in this discussion: 1) a low-lying anxiety on the part of marketers regarding keeping up with current trends and 2) trouble convincing an old-school CEO or other higher-up that this is of value to the company. I am a victim of the former and may blog about it in the future, but relief for the latter is beginning to emerge.

      Among the best of the webinars and white papers discussing social media ROI are those from TNS Media Intelligence/Cymfony. Anyone who is trying to convince their fellow employees about the value of social media must read their white paper, Making the Case for a Social Media Strategy. (Just so you know, I'm not connected to the company at all - I just really do like their work.)

      They begin by going through an evolution of digital communications and present research on what people are doing online. They then explain how social media is a blurring of communication and content (the two activities people do the most online) and give salient examples of how struggling industries (especially newspapers) are embracing social media and seeing profits skyrocket. Among the quantifiable ROIs:

      • momentum
      • influence
      • prototyping
      • direct conversion of buzz into sales
      • market feedback/testing
      • crowdsourcing
      • recommendations

      And each of those quantifiable ROIs has at least one example from a major, dynamic company. Consider these:

      • Crowdsourcing: "Intuit created a community with discussion boards on their site so customers can help each other with questions...According to Business Week, this community now has over 100,000 members discussing topics across 50 subject areas." CEO Steve Bennett's 2005 annual report letter to shareholders stated, "positive word of mouth creates a durable advantage for Intuit that translates into sustained revenue and profit growth."
      • Recommendations: "Analysis of [Petco's] web traffic revealed that users that [sic] sort the list of products by customer ratings spend 41% more than users who search with other methods like popularity or price... Emails that feature customer review content receive 50% higher clickthrough rates."

      Helpfully, there are also cases where social media hurt companies, but a fair review notes that it was not the tool that caused the problem, but the poor PR skills of the company. Many are not adept at responding quickly, especially to a crisis situation. These examples serve as a good warning to be prepared for what you are about to take on.

      In the end, social media is just a tool. But this study and others can give you the quick-and-dirty version (with stats) to help convince your more traditional bosses. It's a scary new world but at least we're all in it together.