New Media Disintermediation of Traditional Business Structures

The Boston Consulting Group, in their Harvard Business School publication examines the impact new information technology will have on business strategy. The authors of the work, Evans and Wurster (2000, p 72) describe the disintermediation wrought by the new media as a “technology [that] allows for the richness/reach curve to be displaced, allowing new players to offer greater reach and greater richness simultaneously.” This results not in a re-segmentation of the old business but in an industry transformation to a new model.

This is happening with newspapers, a dismantling and reformulation is underway driven by the relentless economics of the new media. In their consulting work with Newspapers, The Boston Consulting Group (p 42) has observed that “Newspapers exist and can survive and profit as intermediaries between journalists and readers, because of the economies of scale in the printing press.” Journalists had no direct access to readers.

Newspapers are vulnerable to new media at critical points in their value chain. The most critical being classified advertising, which is a natural for on-line publication. As Evans and Wurster note (p 42) “classifieds account for about 40% of a newspapers revenues and only 10% of its costs…. If classifieds are lost, most newspapers would become financially unsustainable.”

This is the impact of new media on the existing business world. When its existing value chain is unraveled, companies in general, but newspapers specifically for this post can no longer subsidize poor performance of editorial or political commentary by combining them with other links in the chain. The profitable links of old that at one time were capable of carrying dead weight are now under relentless profit pressure.

Reference
Evans, Phillip and Thomas Wurster (2000). Blown to Bits. The Boston Consulting Group. Harvard Business School Press.

Prisoner’s Dilemma in Web Data Mining and Direct Marketing

Morse and Morse have recommended a virtue theory framework to govern the impact Internet data mining and direct marketing have on privacy. They argue that corporate financial interests must be moderated by obligations to the society that gives the corporations their existence.

Their solution is for business to be temperate, a key virtue factor in their proposed framework. Temperate behavior for Internet data mining and direct marketing involves a balance between the two roles inherent in the new business empowering technologies. These technologies act as both social agents and as economic agents (Morse and Morse, 2002, p 93).

In a standard MBA text on ethics, Business Ethics, DeGeorge (2005, pp 498-500) reinforces the Morse and Morse argument for temporance with the observation that the assumption of anonymity is not valid with the Internet yet it is the intuitive expectation of consumers based on their brick and mortar experience.

Additionally, like them DeGeorge advocates informed consent as a primary prerequisite for Internet marketing activity in general, and this of course includes data tracking and data mining in particular. Both DeGeorge, and Morse and Morse conclude that privacy risks on the Internet are serious enough to have precedence over economic benefits.

I believe that the Prisoner’s Dilemma Model can provide a complimentary perspective to clarify aspects of this argument. Data mining and its resultant direct marketing have created a Prisoner’s Dilemma between corporate marketing and individual’s who surf the Web.

Game Theory has been integrated into economics and allows for the expression of social goods in equilibrium analysis. Velasquez (1992, p 321), gives a good definition of one model in Game Theory, the Prisoner’s Dilemma, which is a relationship between at least two parties where each party is faced with two choices.

They can cooperate with the interests of the other party(s) or they can compete with the interests of the other party(s). The payoff is no gain if everyone competes with each other, a stalemate. If all parties cooperate with each other there is a moderate but steady gain. If one party chooses to cooperate but the other party chooses to compete instead, the competitor makes a substantial gain.

This seems to be the state of Internet tracking and data mining today. Consumers are implicitly cooperating with Internet data mining companies. These companies on the other hand are choosing to compete and risking the cooperator’s privacy for the sake of greater, one-sided financial reward.

According to Cooter (see Berkley), repetitive transactions with informed consent are less likely to result in competitive behavior. Instead, they will have the more efficient long-term solution of both parties cooperating. I believe that here is where informed consent will change the nature of the tracking and data mining activities on the Internet.

As this relationship matures, consumers will become more aware of the risks data mining is taking at their expense. Tracking and data mining are repetitive transactions, with a potential benefit and risk. The benefit is an economic good while the risk is a social good. When both sides are aware of what is taking place, the cooperative option of modest but mutual gain is favored in the Prisoner’s Dilemma model. The temperance suggested by Morse and Morse is the favored outcome that grows out of full disclosure.

References

De George, Richard (2005). Business Ethics. Pearson/Prentice-Hall.

Morse, John and Suzanne Morse (2002). Teaching Temperance to the “Cookie Monster”: Ethical Challenges to Data Mining and Direct Marketing. Business and Society Review, Vol. 107, No. 1, pp. 76-97, Spring 2002

Velasquez, Manuel (January 1992). International Business Morality and the Common Good. Business Ethics Quarterly. Retrieved from Taking Sides, 9th Edition. Newton, Lisa and Maureen Ford Editors. McGraw-Hill

A Pirelli Short Film

Pirelli has always had attractively pioneering marketing. It is characterized by facility and skill among tire companies, front running many with flamboyant calendars (see Pirelli Calendar ). Adopting short films is not such a leap for them and The Call is certainly more interesting than watching the Michelin Marshmallow Man try to get his Marshmallow Dog.

Pfanner (2006, pp1-2) gives some insight into this campaign. It was the first time Pirelli worked with Leo Burnett and behind it was concerns with the declining effectiveness of traditional media advertising. Traditional advertising seems to be dissolving before our eyes. It is no longer the altruistic industry that gives us free TV, but now has an appearance more like a monolithic parasite draining money from its corporate host.

Pirelli backed its bet on short film marketing with 60% of its marketing budget according to Pfanner (2006, p1). Why?

"Many advertisers are worried that traditional ways of reaching consumers, including the 30-second television spot, are losing their power to persuade."

Their tag-line “Power is nothing without control” is catchy. However, to build long-term relationships, the slogans should be consistent with the customer’s experience with the company. Duncan (2005, p 15) says that “ interactions with customers send some of the most impactful messages that customers receive about a brand.”

Curiously, Pirelli has had some scandal related to its level of concern for safety. Lawsuits allege that it had foreknowledge of safety problems but did not take action. Many complain, see AllAutoWorld .

All in all, though, the campaign was a hit. They even have a short film out now with Uma Thurman (see Pirelli on YouTube ). Same theme.



References
Duncan, Tom (2005). Principles of Advertising & IMC. McGraw-Hill
Pfanner, Eric (January 29, 2006). On Advertising: Film or Ad? Ask Pirelli. International Herald Tribune. Retrived on August 23, 2008 from http://www.iht.com/articles/2006/01/29/business/ad30.php

The Cluetrain Manifesto: Should Anarchy Replace Structured Communications

First published online and then as a book, The Cluetrain Manifesto (see their website) was an apocalyptic warning. Things were unraveling. Systems were broken. The Internet unleashed long-term trends that would assert themselves.

“Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations.”


Many acted. Microsoft and IBM both have employees talking directly to customers. In fact, Joe Cox reports (see Microsoft Watch) that Microsoft has over 5,000 employee blogs and quite often Microsoft makes major product announcements only on these blogs, not incorporating one or another of its marketing agencies.

How effective are the differnet implementations of the Cluetrain Manifesto?

John Cass is a marketer and a researcher at Forrester and has made a startling finding (see his blog ). Dell and Macromedia use a dedicated approach, and control communications that uses Social Media rather than take the wide-open approach of IBM or Microsoft. Dell and Macromedia are doing quite well with such an approach. Cass notes that

“Macromedia and Dell empowered employees with resources, while IBM and Microsoft give only verbal encouragement without the backing of cash and resources. There may not be a difference in strategy between the dedicated approach and the cluetrain manifesto, just in tactics.”

He highlights two of the manifesto theses, 48 and 51:

48. When corporate intranets are not constrained by fear and legalistic rules, the type of conversation they encourage sounds remarkably like the conversation of the networked marketplace.

51. Command-and-control management styles both derive from and reinforce bureaucracy, power tripping and an overall culture of paranoia.

But he concludes that anarchy does not work. While the Cluetrain Manifesto helped focus attention on change that is needed for marketing communications because of the Internet and Social Media tools, "[it] did not provide a really effective road map for how to open up a company.”

Marketing communications is a discipline. By focusing their Social Media efforts on smaller groups capable of effective marketing communications, and providing them with support, Dell and Macromedia have been effective. Microsoft succeeded when it provided the logistics to trained communications professionals like Robert Scoble. Cass says:

“Maybe in the process of encouraging open conversation, companies like Microsoft and IBM have failed to give the training, tools and tactics necessary for success. While, Macromedia and Dell’s focus on a smaller group of dedicated people has produced more results.”

John's book is:

The New Media Collaboration Project

The Collaboration Project is a vibrant community of public administrators working to improve government services through the use of social media. The Project works in conjunction with the National Academy of Public Administrators commissioned by Congress to provide an independent perspective for resolving the most complex problems facing large organizations. While primarily focused on government, the Collaboration Project can provide insights to commercial uses of social media as well. It is located at CollaborationProject.

The Pillar Post for the Project’s blog expresses the Project Mission, to foster a “conversation about Web 2.0 and how it can be used to solve some of the critical problems facing America.” It also gives an overview of the database of case studies on the use of new media, as well as the content section of the site with detailed research, some by the Project and some by the New Paradigm organization.

Some highlights in the Case Studies database include:

American Solutions For Winning the Future
"A wiki site to draft proposals, create teams, post comments and rewrite proposed solutions to the problems America faces."

Federal Enterprise Architecture Data Reference Model Working Group
"Uses social media for information exchange processes to enable national information sharing."

Flu Wiki
"The purpose of Flu Wiki is to help local communities prepare for and cope with a possible pandemic influenza."

NASA World Wind
"Social Media as a way to continuously expand the data and imagery available in World Wind."

National Institutes of Health on Second Life
"Second Life, the virtual world filled with avatars, creates opportunities for members of the NIH community to become more accessible."

NOAA Virtual World
"Thanks to Second Life, people can now be educated about the Earths' environment in a myriad of ways."

Office of the Director for National Intelligence Intellipedia
"Intellipedia is a peer-to-peer online collaboration network built on the same open-source software used by Wikipedia which allows intelligence analysts to share information."

Peer-to-Patent Project, US Patent and Trademark Office
"Social media organizes public participation to improve the quality of issued patents."

Washington D.C.'s Citywide Data Warehouse
"The District of Columbia was searching for a way to improve service delivery, drive efficiencies, enhance public safety, and reduce costs."


In addition to the case studies, research papers are published. These are located at ContentLibrary. A Blog has been deployed and its latest post is titled Most Companies use Games; Shouldn’t You?

This site has promise and is well worth tracking.

WordPress Blog: Closed Nature of an Open Source New Media Tool

There are a variety of new media software applications that provide blog, wiki and forum functionality on intranets. Open Source new media tools offer a platform independence advantage when compared with the comprehensive Microsoft SharePoint Portal Suite. SharePoint is tightly integrated with Windows and Internet Information Server (IIS). Platform independence has proved true of CanvasWiki, Galleon, and Mango Open Source.

WordPress surprised us.

It requires MySQL to operate (see WordPress Support Post) Database independence through ODBC has been available for 17 years so it is surprising that an open source design would not have considered it.

That aside, the installation process was a breeze, the famous five minute install. The software is located at WordPress Download.

Our platform is Windows 2003 Server with IIS. Our database is SQL Server so we needed to install and configure MySQL, available from Sun at MySQL Download. Again, the MySQL installation was very straightforward. We use a graphical user interface to administer MySQL available at Kovocs. Our installation steps were:

1. Install PHP. An MSI file for the Windows version of PHP can be downloaded from http://us3.php.net/get/php-5.2.6-win32-installer.msi/from/a/mirror


2. Once PHP is installed, we added index.php as index page in IIS.


3. Create a folder in Inetpub\wwwroot to hold the blog


4. Create a database in MySQL


5. Change wp-config_sample.php to wp-config.php


6. Edit wp-config.php and add db info


7. Start Firefox and open Inetpub\wwwroot\thefolderyou justcreated/wp-admin/install.php
   

WordPress has proved to be full-featured, and very flexible. It lends itself very well to a professional appearance.

What happened to MSN?

The nature of the competition between Google, Yahoo and MSN is search market share. Site Seeker notes “Market share. Google, Yahoo! and MSN are all competing for our attention. More users equate to more revenue via pay per click ads and other advertising opportunities.“

There is a rolling might to Google, which has been completely unaffected by either Microsoft or Yahoo. The explanation is ethics.

McLaughlin (2002, p 117) notes that 60% of adult Internet users are unaware of search engine marketing and that only 1 in 6 Internet users can tell the difference between unbiased search results and paid advertisements. Furthermore, 80% of these users when informed, ask that search sites disclose the practices of paid placement and paid inclusion.

The FTC (see Wouster, 2005, p 3) mandates that “clear and conspicuous disclosure” is necessary for both paid placement and paid inclusion. Truthfulness and disclosure is also part of the commercial world's view of social media ethics prescribed by David Scott (2007, p 205):

• Transparency - Never pretend to be someone you are not.
• Privacy.
• Disclosure - Tell people about any conflict of interest.
• Truthfulness.
• Credit.

From the perspective of the government, and from practioners like Scott there is an admonition for truthfulness, and therefore disclosure.

Is there an impact of ethical advertising on the bottom line that would discourage businesses from applying moral principles? McLaughlin (p 119) notes that “MSN seems to serve the companies [who advertise] corporate needs as much as searcher’s interests.” On the other hand, Google is “the best of the bunch at identifying ads.” What has been the impact on market share? Stepforth has charted MSN market share for the year 2005-6.

What’s it look like over a longer haul? Worse!

Search Market Share

Year/Source ............................Google ......MSN

2004 (see Yahoo) .....................36.5 ........15.5

2005 (see Highbeam) ...............41.4 ........13.7

2006 (see Seroundtable) ..........53.7 .........9

2007 (see ReadWrite Web) .......67 ...........5.25

Conrad (1904, p 212) said, “Anything merely rational fails.” Ethics attempts to deal with the complexity of the real world. Our rational models, in order for us to think with them, are abstracted and focus on only some aspects. What we leave out can drive us to the desperation of trying to buy Yahoo.

References

Conrad, Joseph (1904). Nostromo. Wordsworth Editions Ltd (January 1, 1998)

McLaughlin, Laurianne (2002). The Straight Story on Search Engines. PC World.

Scott, David (2007). The New Rules of Marketing and PR. John Wiley.

Wouster, Jorgen (June 9, 2005).STILL IN SEARCH OF DISCLOSURE. Consumer Reports Web Watch.

Service Level Agreement for Social Media Services

Social Media tools can enhance the collaboration and relationship building an organization has with its various integrated communications publics. Marketing aside, functions such as employee relations, investor relations, government relations and vendor communications can all be enhanced through these tools. Both commercial packages such as Microsoft Sharepoint Server and Open Source software such as Mango, CanvasWiki, Galleon, WordPress, TypePad and many others are also available. Software as a Service blogs such as Blogger.com can be used as well.

Groups using commercial or Open Source social media need to enlist the services of information technology professionals to support the system. To eliminate misunderstanding and wrong expectations, a service level agreement should be executed between the IT support professionals and the group using the social media.

The service should be described and the functions provided should be listed. These should include the maintenance functions that will be needed and the time windows when maintenance will be performed. Also those functions that are specifically excluded should be listed. Another important point is to identify who is responsible for customizing the site.

The high level information technology architecture should be described and this should include the security model. Performance goals to get a blog site back in operation should be established , and a set of response performance measures should be agreed to.

An example agreement is located at Social_Media_SLA

New Media Will Challenge Intellectual Property Claims

New media allows each of us to publish our own works, with the illusion that we have copyrighted the material published. However, only the legally proficient will be able to truely establish an enforceable copyright. They know how to properly register the idea and define its scope, and also to discover and contest unauthorized use. Although, there is talk of a poor man’s copyright, “the United States Copyright Office makes clear that the technique is no substitute for actual registration.” (see Wikipedia Copyright)

Powerful companies are preparing defenses against accusations of copyright violations of other’s intellectual property. They are buying and building huge copyright and patent portfolios, and using them in marketing communications. Because of their skillful legal council, they have been able to gain ownership of very fundamental processes. This is especially true in the computer field. For example, Microsoft has patented the understanding of music (The Day the Music Died)

Subtle marketing communications will scare corporate procurement away from weak patent defenders to the strong. For example, in its public relations Microsoft contends that Linux has stolen and violated 235 of its patents and copyrights (see Fortune ). Corporate procurement now faces future charges of knowing violation of intellectual property protections and the ISO 19770 standards on Intellectual Property if they switch from Windows to Linux.

The Open Source community is intransigent in its position. Richard Stallman says software should be free. The community deftly argues that ideas in the computer industry are communal mathematics and should be treated as such (like Folk Art).

Microsoft parries Stallman and says that open source has been reckless with intellectual property. Microsoft has additionally formed a relationship with SuSe Linux and as part of that relationship, SuSe Linux now pays Microsoft royalties on the 235 violations (see Money Mag ), establishing a precedent, and undermining the other Linux vendors and the Open Source Community in general.

The Open Source community has been outflanked by a combination of marketing communications and partnering relationships, which one could argue are also part of marketing communications.

In the end, Microsoft is now accused of stifling Open Source with “patent warfare” see (Patent Colonialism ) Folk culture is indefensible because it cannot hire the marketing communications expertise to lay out effective strategy and legal talent to execute winning tactics. Powerful multinationals will own all human ideas and moralize that we, the great unwashed are ethically violating their intellectual property rights when we try any innovation by our lonesome.

The New Media will accelerate this confrontation by enabling the masses to publish. Many will wonder how you can patent the concept of music. The Open Source community understands the legal intricacies the powerful companies are employing and work within that framework. Not the masses. I suspect they will want common sense.

Phaeton: New Media IMC

Although VW had a highly successful marketing campaign for their New Beetle, there is another VW brand that did not fair so well, the Phaeton. Still sold in the rest of the world, it was withdrawn from the U.S. in 2007 after three years. Although VW seemed to hit, mechanically at least, all the IMC tactics and tools that made the New Beetle a success, there was not much buzz for the Phaeton.

This should not have surprised VW. The iconic Beetle still had traction a generation later, a part of our retro-chic culture today. The New Beetle IMC job was to reacquaint old friends for $16,000, the Phaeton IMC job was orders of magnitude harder, to turn strangers into friends, and charge them $74,000.

The VW corporate theme is advanced and innovative transportation solutions. They used the new media in the Phaeton rollout to the U.S., including short film. Here is their introduction to the Phaeton.

VW worked with new media such as RoadandTrack.com during the introduction of the car through traditional press releases given to interested magazines. What's new Volkswagen.

Why didn't the new media rally behind this introduction like they did the New beetle? A critical news value is impact - what is the magnitude of the news event. Also is there a human interest angle? Not much with these - no nostalgia, no fond memories, no traction from clever old ad campaigns that revolutionized IMC as did the Beetle.

One wonders why, since VW already owns Audi, Bugatti and Bentley, they would want to also make the VW brand name synonymous with high end luxury cars. Nevertheless, their chief engineer thought it a good idea, and here they are sponsoring golf tournaments with the new VW Phaeton brand name, trying to make it a high-end marque. Miami sponsorship.

They did a good job with these. They had Indy 500 champ drivers taking the golfers for test drives. This would seem to be opportunities for local media to cover the story but not many takers. Early on there was incredulity about the price tag for the "people's car."

They do have video news releases (VNRs). There are also short film documentaries about the Phaeton on youTube that make it look exciting. Here is an example: Utube.

Steve Parker at Automotive news pretty well sums up the attitude from the press about the Phaeton: "It's a fantastic, fun car --- But VW has a division named Audi to sell cars in this price class" (seeBrand issue - AUDI not VW division).

The car is a wonderful machine. It is the only car to win the International Forum for Design. It has input from the Bugatti, Bently and Audi divisions of VW. It is the only car to win the gold award at the Iternational Forum for Design (see DesignWinner).

I think this was a failure because they should not have spent so much on a good car to put it in an odd market niche. How consistent is the Phaeton with target segment for VW?

Mobile Marketing for the National Gallery of Art

A proposed mobile campaign for the National Gallery of Art will use QR Codes to integrate National Gallery print materials with its online assets. QR Codes are a special type of barcode that is optimized for use by mobile devices. Smith (QR Codes) echoes the view of many. He observes that QR Codes and mobile form factors link print media with the Internet. By strategically locating QR Codes, mobile readers of Gallery print media can link to the Gallery Web site, getting more in-depth coverage, and the other useful online services.

By using a QR Reader, such as a mobile phone with camera and QR software, one can jump from the print world to the online world. This is unprecedented value for the customers of the Gallery store. As an example of QR Codes, consider Leonardo’s Ginevra de’ Benci. The URL for the web page with the detailed explanation of the painting is Ginervra, while the QR Code for that URL is below.

Gallery print materials for the book store will have QR Code to link to always up-to-date reference materials on the works of art or the artists. By also forwarding users from the Gallery Web site to associated blogs, and community sites further information becomes available and communities of interest can be accessed from print materials.

For a comprehensive look at the potential of mobile marketing at the Gallery, see Redmond Review Gallery

Fractal Art in Mobile Marketing

Fractals provide useful video art for mobile marketing. Large and amorphous patterns crystallize into smaller, distinct shapes. Or the logistic equation can be graphed in reverse from chaos to tipping point to order. The advantage of these as dynamic logos is that a small code module can be downloaded to create them rather than the download of a large video. The downside would be security concerns.

An example is the Focusing Triangles Fractal with code included in this post.

'******************************************************************************************
' This program creates a diffuse pattern and focuses it to a crisp, smaller triangle.
' Author: George Ray
'******************************************************************************************
Option Explicit
Dim iGMR, RandNum As Integer
Dim gmrDenom As Double
Dim gmrAx, gmrAy, gmrBx, gmrBy, gmrCx, gmrCy, gmrPx, gmrPy As Double
Sub Main()
gmrDisplay.BackColor = QBColor(0)
gmrDisplay.Show
Call gmrLogo
End Sub

Sub gmrLogo()
gmrAx = 5000 / 4
gmrAy = 3000 / 4
gmrBx = 4000 / 4
gmrBy = 5000 / 4
gmrCx = 6000 / 4
gmrCy = 5000 / 4
gmrPx = 5000 / 4
gmrPy = 4000 / 4

gmrDisplay.PSet (gmrAx, gmrAy), RGB(255, 0, 0)
gmrDisplay.PSet (gmrBx, gmrBy), RGB(255, 0, 0)
gmrDisplay.PSet (gmrCx, gmrCy), RGB(255, 0, 0)

gmrDenom = 1.5
Randomize
For gmrDenom = 1.2 To 2.2 Step 0.4
For iGMR = 1 To 10000
RandNum = Int(3 * Rnd + 1)
If RandNum = 1 Then
gmrPx = (gmrAx + gmrPx) / gmrDenom
gmrPy = (gmrAy + gmrPy) / gmrDenom
gmrDisplay.PSet (gmrPx, gmrPy), RGB(255, 0, 0)
ElseIf RandNum = 2 Then
gmrPx = (gmrBx + gmrPx) / gmrDenom
gmrPy = (gmrBy + gmrPy) / gmrDenom
gmrDisplay.PSet (gmrPx, gmrPy), RGB(0, 255, 0)
ElseIf RandNum = 3 Then
gmrPx = (gmrCx + gmrPx) / gmrDenom
gmrPy = (gmrCy + gmrPy) / gmrDenom
gmrDisplay.PSet (gmrPx, gmrPy), RGB(0, 0, 255)
End If
Next iGMR
Next gmrDenom
End Sub

If you have difficulty with the code, please post a comment and I will try to help.

The Backend Mechanics of SMS Mobile Marketing

The Short Message Service (SMS) is a network protocol for sending short, usually text messages to wireless devices . Sarah Perez (see Perez on Mobile Mktg),says that SMS is a growing trend in m-commerce. SMS has many features that support m-commerce, which include (see Adobe on SMS)

1. Built-in Authentication
2. Secure Communications
3. Interactive Communications
4. Mobile devices already include the client

Cell phone carriers, such as Sprint or Nextel, provide SMS gateways for the transfer of text messages from computer to mobile phone. These gateways are the foundation of the mechanics for an organization, be it an aggregator mobile marketing service or a commercial business entity, to implement a mobile marketing campaign. As mBlox notes (2006, p 6, see mBlox on SMS), there are over “a dozen US-based carriers to serve all their customers. As such, SMS connectivity provided by any single carrier would be incomplete.”

The solution is to determine the carriers that service the customer publics targeted by the campaign. Their SMS gateways are published and provide the hook for a database driven campaign to reach the customer. For example, Wikipedia has a list of mobile phone SMS gateways by carrier (see SMS Gateways in Wikipedia).

Duncan (2005, p 392), says an important aspect of mobile marketing is that “messages can be targeted not only by individual cellular phone number but also by time and location of targeted customers.” Having a relevant customer database is critical, so that demographic and psychographic characteristics can be used to customize message content and to insure that only customers interested in the message are included in the distribution.

An example data retrieval from a customer database using the ColdFusion language common for Web projects is:

(cfquery name="gmrMobile" datasource="heat")
SELECT
LastName, FirstName, CarrierGateway, Phone, Demographic1, DemographicN, Psychographic1, PsychographicN

FROM dbo.Customer

WHERE
dbo.Customer.SelectCharacterisitic = #CampaignCharacterisitic# and dbo.CustomerOptIn = ‘YES’
(/cfquery)

To send the message from our computer based application to the customer cell phone, we need to combine the cell phone number and carrier to form the correct gateway address. The process using our results above is:

(cfset gmrgateway=" #gmrMobile.Phone#" + “@” + #gmrMobile.CarrierGateway#)

For example,

Assuming my phone number is 800-555-1212 and my carrier is Sprint, the Sprint SMS gateway is messaging.sprintpcs.com according to Wikipedia. So my email from the computer would be sent to the gateway

8005551212@messaging.sprintpcs.com

which in turn forwards it to the SMS client on my cell phone.

A function would be called for each customer record returned from our database call in a loop. The function call looks like:

(cfinvoke component="Your.Component.Name" returnvariable="SendMailSimpleRet" method="SendMailSimple")
(cfinvokeargument name="strTo" value=" #gmrGateway# ")
(cfinvokeargument name="strFrom" value="Your_Name@Your.Company ")
(cfinvokeargument name="strSubject" value="Your Mobile Topic")
(cfinvokeargument name="strBody" value="Your Mobile Message")
(/cfinvoke)

The “your mobile message” in red would be formulated based on the customer demo and psychographics.

The code for the SendMailSimple function above that sends the mail to the SMS gateway is
(cffunction name="SendMailSimple" hint="Send Mail Simple" displayname="SendMailSimple" returntype="string" output="true" access="remote")
(cfargument name="strTo" default="" required="true")
(cfargument name="strFrom" default="" required="true")
(cfargument name="strSubject" default="" required="true")
(cfargument name="strBody" default="" required="true")

(cfmail from="#ARGUMENTS.strFrom#" to="#ARGUMENTS.strTo#" subject="#ARGUMENTS.strSubject#")
#ARGUMENTS.strBody#
(/cfmail)

(cfreturn)
(/cffunction)

References
Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.

Microsoft and New Media. Port25.

There is a growing belief that the Internet is a more interesting place than the PC and that the next generation of software will be developed on the Internet. Such work is furthered by the Open Source Initiative, which encourages the sharing and contributions of the wide audience on the Internet. Open Source software strikes at the essence of Microsoft, the value add it gives to the environment is offered for free by open source.

Microsoft must address the emergent open source software. The most important publics are not only the open source community, but equally government and large corporate customers. Social media can give Microsoft both feedback information as well as voice for its open source related messages. Port25 is a Microsoft blog for interactive communications about open source.

Naturally, Microsoft puts a positive spin on the Port25 mission. “Port 25 is about having a healthy conversation with customers and the industry wherein people can talk openly and honestly about their biggest interoperability challenges, whether it is on UNIX, Linux, Windows, or among other open source packages.” The pillar posts for the blog were published in March 2006 and stressed the interoperability theme. A prime example is at http://port25.technet.com/archive/2006/03/31/Faces-from-the-Collective_3A00_-Shared-memory-anyone_3F00_.aspx and is a video interview with a noted Open Source guru who had been hired by Microsoft.


The site seems to be in decline. Over the past two months, only seventeen posts have been made. Here is an IceRocket trend graph:



My conclusion in reading the Port25 postings and responses is that Microsoft is trying to send an interoperability message to the three publics I mentioned above. Only the Open Source technical public is commenting. This is no interactive communication with strategic buyers. Top Microsoft management should engage in this blog to expand the scope of interactive communications to also capture strategic buyer interest.


To read a more complete analysis, see Redmond Review Port25.

Social Media at the U.S. Mint

The U.S. Mint is a revenue-generating agency that has a profit making relationship with its numismatist public. The U.S. Mint for Kids site (Link to Mint for Kids) is good case study for analyzing how the ethics of marketing to children would apply in the new media.

A Detailed Site Description
The U.S. Mint handily describes the site as a “fun, educational tool to generate interest in coins the U.S. Mint and U.S. History.” The site displays animated cartoons appropriate for children. It also has coloring pages related to the topic of the U.S. Mint and coins. For older students, there is an on-line library, and downloadable articles on topics related to coins.



It also has 21 games ranging in difficulty from simple to complex. All of the games involve a trivial pursuit theme, naturally related to coins. All in all, this site has comprehensive information about the products it sells in an age appropriate, attention getting format.



Does the Site Work in Promoting Coins?
According to Director Michelle Bartrum, (See Wiley) the Mint’s revenue generating activities were ideal for the Web. After her introduction of Web marketing, sales at the Mint jumped from $2000 per week to $1.4M per week. She also introduced a series of communities of interest accessible from their Web Site.

David Scott’s ground-breaking book The New Rules of Marketing and PR could have used Bartrum’s strategy with kids as a case study to reinforce his points about “thoughtful and informative” content driving marketing (p 31). David continues to emphacize content on his blog, see Optimizing a Site.

Bartrum’s stated purpose in creating communities of interest was “to develop an ‘online community’ of coin enthusiasts that return to the site over and over.” This not only included kids but a special effort was made to reach out to kids.

Is it Ethical?
In his book, Business Ethics, DeGeorge (2005, pp 343-344) discusses the morality of marketing to children. Marketing intended to be manipulative is generally held to be unethical. Because of their unique vulnerabilities, children are more easily manipulated and so precautions are necessary.

Young children are very impressionable and believe most of what they hear and are unable to clearly separate truth from fantasy. Adolescent children can critically attack fantasies but are still vulnerable because of their social insecurity. The morality test is "does the marketing coerce or manipulate?"

According to this standard, the U.S. Mint for Kids site is right on the line. It is reaching to an interested segment of young children, with a potentially high frequency. It is driving home the allure of coins. It has effectively increased sales. In reviewing the site, though, the intent seems to be information rather than manipulation.

The Word of Mouth Marketing Association, WOMMA prohibits marketing to children under the age of 13 as unethical (See Media Post or WOMMA). According to this standard, the U.S. Mint is unethical since it has clearly defined marketing goals and tactics it is employing to reach pre-teens. I do not consider the U.S. Mint Kids site to be unethical. Integrated Marketing Communication per se is not unethical and the U.S. Mint Kids site does not attempt to exploit the mentioned vulnerabilities of young children or adolescents. The WOMMA Code does not seem realistic in this regard.

The law pertaining to child web marketing is the The Children's Online Privacy Protection Act (COPPA) (see EPIC) and it prescribes limits to the “collection of personal information when a child participates in online games and contests.” Naturally, the U.S. Mint did not violate the statutory restrictions.

Buzz Building Basics for Blogs

Yaro Starak has published ten techniques to create buzz for a blog (see Blog Buzz )

I am experimenting with Starak’s first tip and have created five pillar posts for my blog, which is about new media. He also recommends preparing a steady supply of other postings on new media that can be added to the blog so it doesn’t get stale.

My first buzz building technique is to do what both Starak and Scott recommend and comment on other blogs. Scott (p 211) says “Commenting on other blogs and including a link back to your own is a good way to build audience.” I plan to go to the blogs that have high traffic according to IceRocket, for “new media”, “integrated marketing communications” as keywords.

My second buzz building technique is to find a blog carnival on “new media” or “integrated marketing communications” and submit one or more of my blog posts. I will go to blogcarnival.com to find appropriate carnivals.

My third and longer term buzz building strategy is book-marking. I have included widgets on my blog for book-marking with Del.Icio.Us and Digg so others can bookmark my site. I will bookmark my blog with my accounts on these sites once everything is ready to go. According to Arrington (2008, p1 ), Yahoo has integrated Del.Icio.Us into its results rankings. Del.Icio.Us book-marking can improve the search results ranking for my blog.

Here is the html for adding a link to Del.Icio.Us book-marking:

(a onclick="window.open('http://del.icio.us/post?v=4&noui&jump=close&url='+encodeURIComponent(location.href)+'&title='+encodeURIComponent(document.title), 'delicious','toolbar=no,width=700,height=400'); return false;" href="http://del.icio.us/post")
(img src="http://redmondreview.com/Cases/save_del2.JPG" /)
(/a)

Here is the html for adding Digg book-marking:

(a title="George's%20New%20Media%20Review%207"" href="http://digg.com/submit?phase=2&url=http://gmrwvu.blogspot.com/" target="_blank")
(img src="http://redmondreview.com/Cases/save_dig2.JPG" /)
(/a)

Another buzz building technique that Starak recommends is Trackbacking. This is including my posts references to other popular blogs on new media and integrated marketing communications such as Paul Gillin’s blog, and David Scott’s blog. Unfortunately, blogger.com does not support TrackBacking at this time (see BloggerCom_TrackBack ).

SMS Sender

The SMS Sender is javascript that formats an e-mail from your computer for delivery to your phone company's sms-email gateway. That gateway then forwards the email as a text message to your cell phone. On your cell phone, if you reply to that text message, it goes back to the gateway and is converted to an e-mail and sent to your email service.

It shows the mechanics of how a computer can send and receive messages from a cell phone and this is the essence of how sms marketing is done, except this is using your email client for demo purposes.

The javascript code is:

(SCRIPT LANGUAGE="JavaScript")(!--
function getLink(text) {
for (var i=0; i(document.links.length; i++)
if (document.links[i].href == text) return i;
return null;
}

function gmrAddr() {
var output = 'mailto:';
for (var i=0; i(document.smsGateways.selectName.length; i++) {
if (document.smsGateways.selectName[i].selected) {
if (output == 'mailto:')
output += '?to=' + document.smsGateways.selectName[i].value;
else
output += '&to=' + document.smsGateways.selectName[i].value;
}
}
document.links[mailtoLink1].href = output;
}
//--)(/SCRIPT)

(FORM NAME="smsGateways")
(select name="selectName")
(option value="@messaging.sprintpcs.com")Sprint Mobile(/option)
(option value="@vmobl.com")Virgin Mobile(/option)
(option value="@vtext.com")Verizon Mobile(/option)
(option value="@teleflip.com")Teleflip(/option)(/select)
(/FORM)

(A HREF="mailto:gmr" onClick="gmrAddr()")Send Mail(/A)

(SCRIPT LANGUAGE="JavaScript")(!--
var gmrMail= getLink('mailto:gmr');
//--)(/SCRIPT)

Microsoft and New Media. The Yahoo! deal.

Microsoft needs a revenue source for its products and services in a future contended by Software as a Service, and one characterized by increasing acceptance of Open Source. Microsoft recently lost in its bid to acquire Yahoo with its well defined new media offerings coordinated with advertising revenue.

A Redmond Review article, (see Redmond Review Yahoo) cites physicist Mark Buchanan's report on mathematical studies of networks that show the phase of super-connected hubs (such as Google and Yahoo today) eventually give way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Furthermore, according to Arms (2002, pp 211-215) there is no goal of indexing the Internet entirely by any of the search sites. There is a higher return on investment for improving the secondary aspects of the search tools so they integrate better with revenue generating functions such as advertising or sales of the web search engine for corporate knowledge management software solutions. We have reached a point where the technical costs to overcome the limitations of web search engines is prohibitive and a plateau in functionality has been set. As with airports, other sites will eventually catch up with the leaders, and not much will distinguish one from the other.

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from mass advertising the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a relevant message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

Failure to buy Yahoo was good fortune for Microsoft, the price was dear and prospects not as profitable as imagined. Super-connected nodes in an aristocratic network often give way to more egalitarian networks over time, their advantage then lost. That time is now for Google and Yahoo.

References
Arms, William Y. (2001). Digital Libraries. The MIT Press.

Duncan, Tom (2005). Advertising & IMC. McGraw-Hill/Irwin.

The Impact of Data Quality on New Media Applications

Many of the new media applications discussed in this blog make intensive use of data stored in enterprise repositories. Such repositories can include not only the traditional customer databases, and site visitor data mining stores but also blogs and wikis, which are stored in relational databases. Supply chain applications make intensive use of data stores such as inventories and suppliers.

Data Quality problems impact a wide variety of information technology projects, and of course this includes those involving new media. In a 2005 report, Gartner estimated that data quality problems will compromise 50% of data mining projects or result in their outright failures.

Donald Carlson, director of data and configuration at Motorola discusses data qulaity problems with supply chain projects, "We have had major [supply chain] software projects fail for lack of good data." Craig Verran says that “We see 20% duplicate supplier records." He is assistant vice president for supply chain solutions at The Dun & Bradstreet Corp. His group assists clients with improving the data quality of their supplier data files. [see ComputerWorld]

How should the project manager protect the social media project from data quality torpedoes? At minimum, a data cleanse phase should be part of the project. Depending on the criticality of the project and the extent of the problem, such an effort should be a separate, preliminary project. A business case must be made that justifies the extent of project clean-up effort.

What types of data errors might a project manager encounter? Jack Olson (2003) in his book “Data Quality” explains the concept of data profiling in great depth. Here are is his error typology:

1. Column Property Analysis: Invalid values



2. Structure Analysis: Invalid combinations of valid values, in this case how fields relate to each other to form records.



3. Simple Data Rule Analysis: Invalid combinations of valid values, in this case how values across multiple fields in one file relate together for valid sets of values.



4. Complex Data Rule Analysis: Invalid combinations of valid values, in this case how values across multiple fields in several files relate together for valid sets of values.



5. Value Rule Analysis: Results are unreasonable.

What are our options with bad data? There are three choices with the bad data: 1.) delete it; 2.) keep data as is; and 3.) fix it. There may be statutory or standards reasons that preclude you from deleting the data. Not all data is fit for use by the business or operational process you are improving or introducing with your project, so you can’t keep it as it is. The cost of fixing the data or the staff time it would take may be prohibitive. Where you draw the line depends on the impact of bad data.

References
Gartner (2005). “Salvaging a Failed CRM Initiative”; Gartner: SPA-15-4007.

Olson, Jack (2003). Data Quality; Morgan Kaufmann Publishers.

Age Compression

Clif Bar has successfully targeted children, the market for their zBar product. Why would kids be interested in a healthful energy bar. There is also a psychographic trend in play.

CLIF BAR has hit upon age compression effectively. Kaplan (2001, p 1) says “The other trend is psychographics and is known in the entertainment and toy industry as age compression. This, more specifically, is a very strong trend where young children want to grow up faster than ever before.”

They may also be in the psychographic segment that Duncan (2005, p 228) calls skippies – School Kids with Income or Purchasing Power.

References
Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.

Kaplan, Henry (July 9, 2001). Company Interview Excerpt
HENRY KAPLAN - NEWKIDCO INTERNATIONAL INC. The Wall Street Transcipt. Retrieved on May 24, 2008 at http://www.twst.com/notes/articles/map615.html

Fundamental Attribution Error

O’Brien (2007, p 1.) says that “People don’t merely form first impressions; they become attached to them. Social scientists have given this phenomenon a name: the Fundamental Attribution Error (FAE).” This is true forming an impression about people or brands. Often the first impression about a brand comes from the brand name, so FAE considerations should be evaluated in selecting a brand name.

Gawronski (2007, p 367-9) argues that culture plays an important role in how the FAE operates in forming first impressions. This is consistent with Duncan (2005, p 135), and I quote, “Cultural values that relate to clothing, music, food and drink can determine the appropriateness of marketing…”

Duncan then gives an example about selling alcohol in a Muslim society. I would add that this could be true in the U.S. as well, for example an alcohol salesman trying to sell prospects or customers at a local AA meeting would probably be considered inappropriate. Likewise, certain brand names may be culturally or socially inappropriate, for example Redskins.


References
Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.

Gawronski, Bertram, (2007). Fundamental attribution error. In R. F. Baumeister, & K. D. Vohs (Eds.), Encyclopedia of social psychology (pp. 367-369). Thousand Oaks, CA: Sage. Retrieved on May 24, 2008 from http://publish.uwo.ca/~bgawrons/documents/G2007EncycFAE.pdf


O’Brien, Timothy (September 2007). The Power of Personal Branding: Creating Celebrity Status with Your Target Audience. Dynamic Graphics. Retrieved on May 24, 2008 from http://www.dynamicgraphics.com/dgm/Article/28801

Measuring the Effectiveness of a Website

Chen and Wells (1999) have defined a measure to evaluate the effectiveness of a Website -Attitude Towards a Site (AST). To conduct the measurement, judges will evaluate a site based on three categories of characteristics: 1.) Entertainment, 2.) Informativeness and 3.) Organization. Chen and Wells selected the characteristics in each category from a literature search of prior studies and analysis on attitudes. They used willing MBA students as the site judges (p 29). Chen and Wells (p 33) qualify these results.

“It should be noted that this formula represents evaluation of this particular set of Websites by this particular set of raters.”

Different scores will come from different psychographic types. Lisa Sanders (2007, p 1) advises Website designers to use the concept of “personas” when creating a site. Personas are ”archetypical characters [who] represent specific consumer segments.”

So instead of doing the measurement with a handy group of available workers, use sample groups from the VALS, PRIZM, TR or other psychograpic segments making up the target audience and have them do the measurements.

The approach that Chen and Wells used by selecting available students is probably fine for a general packaged goods site like Coca Cola where there is an even distribution among psychograpic groups. However, some products will have more narrowly focused audience characteristics and so the AST measure of the site’s effectiveness would be more accurate if the judges doing the measurement have those characteristics themselves.

How should we measure a creative effort? Many methods exist for Websites. Chen and Wells (1999) have theirs. Jenamani, Mohapatra and Ghose (2002) have theirs. Green and Pearson have theirs. When we talk of such measuring, I like to keep in mind one of my favorite quotes, so although lengthy, I paraphrase it here (see Steinbeck, 1941, p 2-3):

"The Mexican Sierra (a game fish) has 17 plus 15 plus 9 spines in the dorsal fin. In the lab the way you count them is to open an evil smelling jar, remove a stiff colorless fish from formaldehyde, and count the spines and write the truth.

In open water, the Mexican Sierra is a rapid swimmer. If it strikes hard on the line so that our hands are burned, if the fish sounds and nearly escapes, and finally comes in over the rail, his colors are pulsing and his tail beating the air, a whole new relational reality has come into being.

It is good to know what you are doing. The man in the lab with his pickled fish has set down one truth about the spines and has recorded many lies. The fish is not that color he sees, not that texture, that dead, nor does he smell that way."

References
Chen, Qimei and William Wells (October 1999). Attitude toward the Site. Journal of Advertising Research. Retrieved from EBSCOHOST on July 8, 2008

Green, David and Michael Pearson (Fall 2006). DEVELOPMENT OF A WEB SITE USABILITY INSTRUMENT BASED ON ISO 9241-11. Journal of Computer Information Systems. Retrieved from EBSCOHOST on July 5, 2008.

Jenamani, M and P. Mohapatra and Ghose S (2002). Benchmarking for Design of Corporate Websites. Quarterly Journal of Electronic Commerce. Retrieved from EBSCOHOST on July 8, 2008.

Steinbeck, John (1941). The Log from the Sea of Cortez. New York: Viking.

Good and Bad Brand Names

According to Duncan (2005, p. 80-81) the key characteristics of a good brand name are 1.) It incorporates the benefits in the name; 2.) Has a positive association to some cultural touchstone; 3.) It is distinctive; 4.) And it is easy to spell and say. These will be the criteria used to evaluate the brand names I consider to be appropriate and those that are not.

Two good brand names

Microsoft
Microsoft has the world’s second most valuable brand and its brand name is a part of that value. It ranks only behind Coca Cola, and has a brand valued at nearly $60B, according to InterBrand (August 1, 2005, P 94). Here is a link to the top 100 brands: Top 100 Brands .

Microsoft’s brand name incorporates the benefits or services that are gained: this company’s products are for people who need software to do tasks on a microcomputer device. Additionally, the brand name is easy to say and spell. Finally, I think is has had a positive association with smallness. Kearns describes how Microsoft does not understand big enterprises and its primary customer base is small businesses. A geek's Small is Beautiful

I would also add to small businesses, small departments in large organizations. I have been in both situations in the mid-to-late 1980s and there was a large grass roots movement of small organizations that looked at Microsoft as providing information technology we could afford and use. It turned out to be true. The momentum from its successes in small organizations propelled Microsoft to its position today.

Polo
Duncan (2005, p 147) says: “Aspiration, status, and luxury are themes frequently used in marketing communications.” The Polo brand expresses that in my thinking. Polo is the sport of aristocrats. So I associate it with class, and since I have airs above my station it appeals to me. It is also simple – easy to say and spell.

In Time magazine, Koepp (September 1986) quotes NY Times fashion critic Bernadine Morris referring to Ralph Lauren and Polo: "He's acquired a certain reputation for clothes that are, you know, with it. But not too with it. Not enough to shock the boys at the bank." That is the sense I get from the brand name also, stylish rather than formal but acceptable anywhere. An appeal to upper-middle class aspirations. Bernadine on Ralph.

Two bad brand names

Old Crow
One brand name that seems inappropriate to me is Old Crow. This is the brand name for a bourbon whiskey originally distilled by Dr. James Crow, the inventor of the sour mash process for manufacturing bourbon. The name is simple, but has depressing connotations. I associate the name with dereliction. It says to me that the benefit of using this product is I end up with a sign around my neck, “Will work for alcohol.”

Breen (2007, p 87) discusses a fortress brand and I think the point can be extended as a fortress brand name also. He says “the successful brands stumble: They fail to evolve. Bangle calls them ‘fortress brands.’ Deeply rooted in their heritage and values, they are inflexible, unmovable, and ultimately stuck in time.” Who do you love.

This happened to the Old Crow while its rival Jim Beam made early and profitable forays into premium and superpremium bourbons. America changed significantly from the 1950s through the 1980s and Old Crow had not kept up. Old Crow had gone into receivership in the 1980s and was acquired by its rival, Jim Beam. The 1980s saw an accelerating change in American drinking habits. Single malts and premium whiskies had captured the attention of affluent drinkers while vodka and rum appealed to the younger generation. Asimov (2007, p 1-2) gives a capsule summary of this trend during that time period. The Rise of Premiums.

In prior times, it had appealed to its colonial origins, which explained its brand name, as in this advertisement typical of its campaigns in the late 1950s and 1960s. Example Crow Ad. The historical appeal of its brand name no longer seemed relevant to the new America. In any case, with its losses from the shift in drinking taste, it could no longer publish effective advertisements to explain the funny name.

Today, some 30 years on, the name alone, without the advertising, projects it as a train-yard favorite. It rather suggests the use of industrial strength chemical extractants in its processing, with kool-aid like substances added afterward to hide the clorox aftertaste. Today, Jim Beam and its holding company, American Brands relegate the Old Crow brand name to its low-end offering.

Beam offers an interesting contrast in its advertising during that tumultuous time. Example Beam ad. Sean Connery was featured in its ads during the 60s and 70s. He seemed to me, at that time, to be considered cool to all age groups. American Brands seemed to have the pulse of its target segment in terms of both product innovation and brand image. Today, very few people understand the Old Crow Brand Name and by its lonesome it sends negative vibes.

Redskins
The Washington Redskins football team has a great history on the gridiron. However, this is another case of America changing and a brand name that is stuck in the past. Today there is a rising level of complaints that the brand name is a racist slur, insensitive and insulting to a significant group of Americans. I think as this movement (to change the name) becomes more prominent, the brand name will be increasingly associated with base and backward prejudice. Time to rethink.

The coalition against the name is not relying merely on moral suasion. It has filed action with the trademark section of the US Patent and Trademark Office. According to AP (August 2006), three trademark judges agreed with the complaint and were ready to revoke trademark status. A successful appeal has stopped this action for now but has not stopped the determination of the groups organizing to oppose the name. Redskins Name Problems

References
Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.

Life Time Value

A customer’s Life Time Value (LTV) is based on a common management process of discounting future values or revenue flows by a discount rate so they can be compared with cost outlays to decide if we stay in business doing some action or another. Spiller and Baier discuss Life Time Value on pages 18, 75-76.

Group 3 (see Foreman, 2002) holds that LTV analysis is no longer relevant “because it’s difficult to focus on speeding bullets.” They further assert that with modern interactive technology, “a better price, better service or a wider selection could be just a keystroke away. This makes customers less committed, not to mention completely undermines the LTV model.”

My first thought about less committed customers is the discount rate would reflect the risk of lower future revenues caused by this diminishing commitment. It also struck me that discounting future revenue streams is standard financial business practice that has spread to IMC.

When dealing with other people’s money, such as shareholders or other investors, we incur a fiduciary responsibility. To protect our stakeholders and ourselves we follow standard business practice unless we think we can make a better case for not following it that will hold up in court if it comes to that. Muir and Schipani (2007, p 2) also remind us that in addition to tort action, “regulatory use of finance theory” is now part of the corporate governance mandated by Sarbanes Oxley (SOX). SOX was passed to keep investors from getting fleeced by fountain pen conspirators masquerading as management.

The argument Group 3 is making, by my reading, is that because of the rapid change in the competitive landscape, future revenues will be less than expected. Their implicit assumption is that management cannot distinguish service or product from competition except by price and hence the dismal outlook for future revenues. It is not at all certain, however, that competition alone reduces us to fungible commodities. It also takes management believing that it has no other chips to play, such as improved marketing communication, superior customer service and the like.

Pine and Gilmore (1999, pp 1-3) show that exactly the opposite will happen when management has a more positive outlook and distinguishes the product or service of its company. They use coffee beans as the ultimate fungible commodity. They trace the costs through a brutally competitive minefield and Burger King has a low cost offering of Dewey Egbert coffee at $1.19 per cup. Yet Starbucks manages to sell an equivalent cup for $1.79. The difference is the creative work invested by Starbucks to improve the customer experience that allows them to charge a 60% markup over their competitors. We need to avoid making the ruinous assumption that competition results in a rush to the bottom with utter destruction of revenues.

On the other hand, social media is demolishing the business world. The Boston Consulting Group, in their Harvard Business School publication examines the impact new information technology is having on business strategy. The authors of the work, Evans and Wurster (2000, p 72) describe the disintermediation wrought by the new media as a “technology [that] allows for the richness/reach curve to be displaced, allowing new players to offer greater reach and greater richness simultaneously.” This results not in a re-segmentation of the old business but in an industry transformation to a new model. New models may very well not use the traditional practices of today, although this is only a possibility.

References
Evans, Phillip and Thomas Wurster (2000). Blown to Bits. The Boston Consulting Group. Harvard Business School Press.

Foreman, B. (2002) Are Lifetime Value (LTV) models outdated in the new world of global marketing? Group 3 Marketing. Retrieved August, 28, 2008, from http://www.group3marketing.com/downloads/LTVarticle.pdf

Muir, D. and Schipani, C. (June 2007). ARTICLE: THE USE OF EFFICIENT MARKET HYPOTHESIS: BEYOND SOX. Michigan Law Review. Retrieved on August 29, 2008 from LexisNexis.

Pine, J and J Gilmore (1999). The Experience Economy. Harvard Business Press.

Spiller, L. and M. Baier (2005). Contemporary Direct Marketing. Pearson/Prentice-Hall.

Elaboration Likelihood Model and Choice in Social Media

The Elaboration Likelihood Model can provide a framework for analyzing the most effective balance in the mix of social media you use for your communications. The best suited or least suited media for your communications depends on the individuals in the public to be influenced and the state of our communications with them. Since the receivers will be spread across a continuum of interest in your message, a mix of the media is appropriate, but what is the most appropriate mix.

Cacioppo and Petty define the primary relationships in persuasive communication as communication engagement and cognitive commitment. According to the model, the greater our communication engagement with the other party the more likely that party is to use what the model calls central route processing, which is to say a great deal of message related thinking. Media appropriate for in-depth thinking and evaluation of the message should be used in such a case.

When elaboration likelihood is high, topic-germane argument usually has the highest influence on the reactions to a recommendation. On the other hand, if communication engagement is low, what the model calls peripheral cues are best but only if they are crafted to allow the receiver to maintain a reasonable position without diligently thinking through the merits of the recommendation. In this case, more attention getting media that do not necessarily lend themselves to protracted analysis would be a better choice.

The 1986 date of the original work predates the wide-spread use of the Internet. However, a study at the University of Texas (see Cho) introduces a modified ELM that acknowledges key mediating variables. If they are considered, Cho concludes that ELM is adaptable to the Web. In addition to communication engagement and cognitive commitment, Cho also considers the correlation between the web site and category of communication, the attitude of a public towards a web site, and the attitude of a public towards web marketing communications. If we know enough about our publics, we can adapt ELM to the Web.

The social media I would place at the peripheral end of cognitive commitment, like sms ads, video short films and advergaming must have the message depth tested to see if the target public is ready to commit to processing it. On the other hand, the converse seems probable. When someone has reached the stage of seeking in-depth information about the topic, joining a blog, wiki or forum on the topic is a natural step.

Redmond Review has a comprehensive analysis, see Redmond Review Elaboration