Marketing 2.0 (long read!)

February 6, 2011 § 2 Comments

 

My first contact with Marketing was almost 4 years ago when I joined the Corporate Supply Chain Management at Siemens and was responsible for the global procurement strategy for marketing spend. My first mistake towards the word “marketing” was my association with “advertising”, which I consider not a challenging-enough task and was the reason why I rather studied engineering in the first place. Very soon I discover how wrong I was. I missed completely the fundamentals of marketing like understanding the market, creating a customer value proposition and developing a marketing strategy and plan. Advertising was just a minor part of the implementation part, in better words of marketing guru Seth Godin, “Marketing has to come before the product, not after”.

4 years later and some MBA classes afterwards, I think to know what Marketing really is. Or do I? Well, I better do, cause I am now co-founder of foodieSquare (an online marketplace that connect food lovers or “foodies” with unique and authentic european artisan producers) where I am leading the marketing silo. For this reason I desperately had to become a marketing expert in weeks and very soon I was able to identify that there was this old traditional Marketing or Marketing 1.0 (which I just couldn’t identify my self with) and there was the future of marketing, the new marketing or as I call it Marketing 2.0.

You should know more about me to understand why I I was asked to co-found foodieSquare to become the head of “new marketing”! My passion in life is technology and I do feel to understand it like no other by experiencing the impact of technology in my personal life. I just like to feel the way the new technology impacts me first, hence I try as much technologies as I can. This enables me to understand the effects of technology on consumer behavior and the consequences of new technologies on business and society in general. I am very grateful to had Enrique Dans as professor of Information Systems at IE Business School. I realize that I am not crazy to have this passion about technology and understood why I was the few of my class to see that things had changed. In my view, there is nothing greater than to see such big technological changes occur in such a short time and it fascinates me to think about all the new business opportunities around it! But there is a catch: You have to be willing to change yourself in order to lead change. Now, I can see more clearly how technology has become the main driver for marketing and how things have changed for marketers.

I liked to call this new marketing “Marketing 2.0” and there are some few people in the web that also use this concept even though it is not institutionalized yet. This is why it is important to describe it a little bit better. Lets start with what is not. Marketing 2.0 is not digital or online marketing (Please avoid the mistake I did when I thought marketing was advertising!). Yes, it’s true, the new marketing was triggered mainly by the creation of the internet and all the new technologies that had evolved since then (i.e. Social media). Things have changed, marketing is different now and technology has allowed us to pick and choose what messages we want to get and when we want to get them. No wonder why Internet is outpacing TV for time spend and this is because now more and more people are connected to the internet, and most recently, to social networks like Facebook. “We are going to see this huge shift where a lot of industries and products are just going to be remade to be social” (Mark Zuckerberg during an interview with 60 minutes, see minute 10:40”). And this is already happening. An HBR article from this december issue states that social technologies are helping—if not forcing—brands to form new kinds of relationships with customers. Other study says that Facebook is been used by 81% of Y-Gen users daily and there are studies that say that 63% use social media to engage with brands and more than 50% say that Facebook, blogs and brand videos affect their opinions about products.

So, if you are a traditional marketer, you are in a big trouble cause you are not going to reach your customers as you used to do. For me, the new marketing is about understanding how consumer behavior is shifting and hence, how the marketing approach has to change. We now know that marketing is not advertising, so Marketing 2.0 is not about creating online campaigns, digital banners or viral videos (Something being viral is not, in itself, viral marketing) either. Marketing 2.0 is more about adapting new ways of interacting with consumers that will result on a shift in the marketing process, culture, strategy and plan! It is now all about engaging communities by collecting more and better data and using it efficiently to add value to the community. Hence, the fundamentals of Marketing are still there (Creating Value, Capturing Value and Sustaining Value) but the way we now segment and target the market and how we do positioning has changed drastically. You cannot longer market to the anonymous masses, because they’re not anonymous and they’re not masses!

Not been part of the “Marketing 1.0” world has been a clear advantage for me, cause I am not biased. Patrick Spenner mentions for example that the problem of traditional brand-management models aren’t up to the current task is because they are designed for an outdated organization structure and depend on people with the wrong skill sets.  If I had to describe Marketing 1.0 in a short sentence I would summarize it as the one way communication channel build by companies, not communities.

Challenges of Marketing 2.0

After some few weeks working for foodieSquare I have quickly realized all the challenges I am and will be facing as head of “new marketing” and will affect my marketing plan. But also established small and big companies are facing these! After some some research, here is what I think are the biggest challenges to face in this “new marketing” era:

Creating good content: you have to have something worth to talk about to your community that brings value. It doesn’t help to advertise your company in forums or send promotional emails. Probably they will be ended in the spam email folder or you will be removed from forums. Because only relevant and useful content will be shared by user of your community, focus in content is the prio 1 in the Marketing 2.0 world.

Bringing value to the community: Creating content that is valuable for the community is crucial and hard to do. You just don’t create a community but rather you participate in one. Hence, the first thing to do is to understand your community. You also have to understand the actual communication landscape in order to select the right tools to interact with your community. This can be for example: blogs, twitts, emails, advertising (online, offline), Facebook App, Interactive Ads, Semantic web, Tablet and Mobile Applications, etc.

Understanding customer behaviors: With so many changes going so fast, how customer behaviors change is the first thing you want to watch. In order to understand these changes, it is important that you, as an individual, are also willing to change. Kevin Colleran, Global Account Lead at Facebook and also considered Facebook’s employee #2 after Mark Zuckerberg, suggested during a digital natives debate to try to live a day in your customers’ new media mix:   “For example, if your target customer spends five hours a day on Facebook; sends 120 text messages and half a dozen tweets a day from a smartphone and posts photos, videos, and blogs around the clock; “checks in” regularly using Foursquare at favorite retail locations to become “mayor”; relies on a plethora of mobile apps like Google Maps to get from one place to another, RedLaser to check prices on SKUs at Kroger or Best Buy, and Fashism to crowd-source advice from others while shopping; goes online at RueLaLa and GILT for flash sales just when the boutiques open; and subscribes to Groupon or LivingSocial for alerts on local deals, there’s a good chance you might want to know what it’s like to live a life like that.” “There’s an equally good chance that knowing what it’s like to live your customers’ media might change the way you use marketing and media to reach, influence, and interact with your customers. It might even change what you do radically.”

Shifting the Consumer Decision Journey (CDJ). David Edelman in his last HBR article comes to the point by defining the new consumer decision journey: consider, evaluate, buy, enjoy, advocate and bond. He mentions how for marketers, the old way of doing business is unsustainable and that why they need to realign their marketing strategy and budget with where consumers are actually spending their time.

 

Aligning the internal organization: It is a common mistake to think that technology has only revolutionized how companies and consumers interact and fail to recognize the internal organization implications for companies. As described by Patrick Spenner, in “Why you need a New-Media Ringmaster” traditional organization have several department in contact with the customer like customer support, corporate affairs, marketing, etc. In the current hyper connected world the chances of missing what customers really wants is high under such organization structures. Roland Smart, a Marketing 2.0 consultant, says it even clearer. “Marketing 2.0 is about opening your company to the community but also about opening windows between your organizational silos so they can talk to each other and share resources”. The latest article from the McKinsey Quarterly regarding Web 2.0 and networked enterprises also confirms, based on empirical analysis, the importance of pushing toward fully networked enterprises. They suggest companies to integrate Web 2.0 technologies into employees day-to-day activities, to break down the barriers of organizational change and finally and most important use technology to connect customers, business partners and employees! Clear winners are fully networked (internal & external) enterprises. The empirical evidence suggest a strong correlation between this companies and a greater market share.

Develop (or hire) the 2.0 skills: Reorganizing wont help much if the wrong people are designed the wrong marketing strategies and plans. Marketing 2.0 require people not only with digital savvyness but also those who can following skills mentioned by Patrick Spenser: integrative thinking, lean collaboration skills and high speed! Furthermore, it is crucial to develop a total new function within companies brought up to the media by Scott Brinker, marketing technologist blogger and President and CTO of ION Interactive. The new role is called the Chief Marketing Technologist (see slides from Scott here), a marketer who is also a technologist and act as a hybrid between Marketing, IT and reports directly to the Chief Marketing Officer. His/her mission is to “help the CMO translate strategy into technology (and vice versa), Choreograph data and technology across the marketing organization and fuse technology into the DNA of marketing practices, people and culture. Brinkers says, “Marketing most champion its own technology”.

So, for startups like the one I am founding it is clear that the role of marketing can only be found with the new marketing principles. At foodieSquare, acting as a Chief Marketing Officer and Technologist, my tasks will be to understand the implication of current and future technologies in the community and interact with them in the most efficient way in order to deliver a consistent message that is credible that will enable to build trust and loyalty with an emotional engaged community. For establishes enterprises the things to do are clear: reorganize, develop 2.0 skills, hire a CMT and make marketing own the technology, enable interaction within employees in order to better interact with customers. It is crucial also to focus on content and on delivering value to the community, gather as much data as possible and identify the right tools to use with you customers. Finally, get all this information and experience learned and put them in you marketing strategy and plan!

 

Scott Brinker predict that in the next 5 years we will see an explosion of marketing technology. I guess he is right when he says that Marketing must control its technological destiny! At foodieSquare, I will make sure we will!

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Notes from the European E-Commerce (EEC) in Madrid

October 27, 2010 § Leave a comment

Today I had the pleasure to attend the European E-Commerce Conference in Madrid. Overall great keynote speakers!

The whole thing was more USA and Social Media/Digital Marketing oriented and less eCommerce but I think it was good so.
The eCommerce tool is just the commodity and there is not much to talk about. In the other hand, there is much to learn on how to implement eBusinesses that are really successful using the newest of the trends like making eCommerce platforms more mobile, personal, social and local (as described by Google).

From the conference I missed only more questions from the public, I guess spaniards were shy to speak in English (for those who can speak it!).

See below my notes (unedited) from the conference:

Brian Wiegand (CEO Alice.com)
– serial entrepreneur
– important is also to create value for shareholders.
– innovation and passion (reinvent how things are done in the traditional way).
– Bizflings, Nameproject, Jellfish sold to Microsoft.
– CPG (Consumer Packaged Goods).
– Private levels challenges the industry. Retailers are making own products. Best customers are your worst competitors. Private levels growing fast!!!
– Media is changing. 3 to 3000 channels! Media fragmentation. Relationship of suppliers with Retailers not consumers! Consumers hate advertisements. Companies relying in traditional advertising are not getting the sales they use to make.
Responds of suppliers? More and more adds!!! (wrong approach)
– Desintermediation. Manufacturers are the fastest growing segment online.
– Alice.com specialized marketplace. Supplier decides the products. Supplier is the retailer. Suppliers get all the data!
– adding coupons in the future. Free samples.
– free shipping and better prices otherwise why buy online!!!
– Logistics: taking care by suppliers.

Victoria Ransom (Wildfire)
– facebook represent the biggest change to marketing. More than google. Facebook beats google.
– earned, owned, paid media. 3 tips of digital content.
Earned media: 90% trust friend recommendations.
36% becoming fan on FB are more willing to buy!
– more creativity and patience is required to build relationships with FB fans.
– Consumers do engage with brands.
– 3 ways to use FB marketing:
Grow: grow existing audience! cross promotion with newsletter, website. Encourage friends to spread the word. Facebooks ads (give them a reason to click, don’t drive people outside of facebook, advertise to friends of fans, check out blog.wildfireapp.com) Do promotions. (keep it simple, photo contest easier than video contest; make it social, price to winner and price to the one that referred to winner; personal! aim peoples interest! Passion!)
Engage: tell (careful with FB algorithm!) ask questions! (u need comments) ask for likes! tap. Quality>quantity. Deals, entertainment (games, quizzes), exclusivity.
Monetize: coupons. Special deal.

Ge Wang (Smule)
– social music.
– what people can do with technology and not the other way around

Clay Bavor (Google)
The evolution of eCommerce (The google perspective)
– 2005 The world was old back then!!
(presentation tips: context related, very good!)
– Trends: mobile, local, social, personal
People love shopping from their phone.
Google goggles. Google shopper. Visual, audio search enhance shopping.
Google product search. Already in France. Soon in other European countries. Ezevidra@google.com
– How to evolve: bet on the Internet, be found, try new formats (sitelinks), optimize for mobile, be social, personalize, get local.
– Google shopper. Visual, audio search enhance shopping.

Tom Ryan (CEO of Threadless)
– DIY day every quarter. Pitch of ideas.
-build a community better of what people are already doing.
– 3 groups: artists, recommendations, buyers.
– Act human: authenticity is non-negotiable
– learn to let go & give control to your customer.
– marketing is the result of great products.
– great products want to be shared.

Roundtable: Logistics
– customers pays one way or another for delivery. There is nothing like “free delivery”. If margin of sale is high enough, delivery can advertised as free.
– home deliveries is the easiest way to do. Deliver products where you are.
– enable delivery options (immediately, delayed, etc). Coordinate this with the logistic partners.

Reí Inamoto (Chief Creative Officer, AKQA)
– The best advertising isn’t advertising.
Storytelling + Technology
Storytelling + Media
“we are not in the business of keeping media agencies alive” CMO of Nike
“Advertising is the price you pay for having an unremarkable product or service” amazon CMO
Tradigital.
Peoples behavior are changing fundamentally.
Production + Communication. New frontier of what we do.
Product development talking to Marketing (Chief Marketing Technology officer)
From Storytelling to Storyenabling.
Fiat Eco:)rive.
Product design + Storytelling
Functions + Emotion

Post from my iPhone. Sorry for all typos!

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