Luke Grant
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How To Be MVP Of The ROI Bowl

2/11/2016

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Which of the #Superbowl advertisers do you think will get a strong ROI on their $5 million investment? The one that is funniest? Most dramatic? Most shocking? Or even most "talked about?" It can be hard to measure, but one critical factor these days is social engagement, during and - even more importantly - after the game. Some companies even weaved a social engagement angle into the ads themselves (such as esurance with its re-tweeting sweeps concept).

Measuring the momentum built - and building on - social platforms is critical to maximizing the ROI outcome. Superbowl ads are designed to be memorable, impactful, and entertaining... But they still have to communicate a brand's value proposition and get the viewer want to take action - to know more about that brand or product.

This is especially true for the increasing number of emerging start-up brands that took the risk of running a Superbowl ad this year (SoFi, Dollar Shave Club, Apartments.com, Wix.com). In order to justify the $5MM cost to their execs and investors, marketers for these companies need to prove value beyond just "making a splash" and generating a day's worth of water cooler talk. That quickly fades, but getting customers to engage via social platforms, and keeping them engaged through content marketing, drip campaigns, product trial, and ongoing CRM techniques can be a winning strategy.

The article I have linked below does a good job of explaining how the goal of Superbowl ads is evolving over time - and how the new tactics can (and should) measure their success in new and broader ways.
http://www.adweek.com/socialtimes/super-bowl-ads-and-the-roi-gap-how-social-activation-measurably-grows-business-outcomes/633750 

Obviously the debate among marketers of whether Superbowl ads are a worthwhile investment is not new. But it gets much more interesting when you broaden the analysis beyond the spot itself and include the new technologies and practices that can turn that "splash" into a lasting wave that continues to build over time.

Leave a comment and me know what you think; which brands and companies successfully leveraged social engagement in their ads? What can they do beyond the ad itself to generate interest and brand engagement with their target audience?

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The Internet of Things: Is This The Year It Really Becomes a Thing?

1/5/2016

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​The 2016 Consumer Electronics Show (“CES”) show takes place in Las Vegas this week, and as usual there will be lots of speculation among attendees about which technology stories, products, and platforms will use the show to “break out” and gain mass consumer adoption. Last year, wearable technology – especially in the health and fitness category - was the buzz. Throughout 2015, wearables such as the iWatch and Fitbit surged into the limelight and became successful mainstream products (as evidenced by Fitbit’s successful 2015 holiday sales results).

But what about the often discussed “Internet of Things?” For the last 2 (or more) years, there has been a good deal of hype at CES and around the industry in general. Yet it still cannot be said that the promise of the Internet of Things (“IoT”) - a tech-driven utopia of connected smart devices that automatically optimize our world - has truly come to fruition. (Just ask Walt Mossberg for his point of view). Great technological development has occurred to be sure, and impressive new products are coming to market all the time. But I don’t think we can say that a world of connected smart devices talking to other and using data to optimize our lives has become a true reality – yet. Why has this not yet happened? What will it take for it to happen? When will this occur?

A few thoughts come to mind when wrestling with these questions; I discuss them below:

IoT technology standards are still in some conflict – prolonging the fragmentation of the market.
The common connection and communication protocols still have yet to be included on one common platform, and the biggest players in technology and consumer electronics are still sticking to their consortia to promote their standards as the one the world should adopt. This is part a marketing issue and part a technology issue: no one technology has yet emerged as a clear superior, yet (in my opinion) none of the sponsors have done a good job of making their case to their consumers – adoption has been slow and splintered. Unlike the brilliant marketing of, say, Apple – and how it attracted and converted a better part of the connected world to its closed-loop ecosystem.

Concerns remain about data security amongst connected devices.
These days, computers and phones aren’t the only things that can be hacked. As discussed in this recent article from Bloomberg Business Week, all kinds of connected devices are vulnerable to cyber attacks.  Many of these devices contain vital and sensitive personal information; some could be reprogrammed to cause inconvenience or even harm people. The internet of things is not just smart refrigerators and home automation, but more broadly consists of major industrial machines, power generation plants, medical devices, and vehicles. Until these security holes are plugged, it will be challenging for the market to adopt them in a widespread way. Manufacturers need to listen to customers and users to fully understand the vulnerabilities.

Applications have been more targeted at B2B instead of B2C.
The internet of things just hasn’t hit consumers yet, and the low awareness of the technology has kept consumer penetration below 10% thus far (although expected to increase dramatically in the next 5 years). In fact, it has been industrial corporations and technology-focused startups that have been the most active in exploring the applications of machine-to-machine connections. We have seen good use of the technology in the manufacturing and transportation sectors, with machines exchanging data to improve production yields or increase fuel efficiency. The product offerings targeted at consumers, while interesting and progressing, have yet to be a game changer that will bring the phrase “Internet of Things” into the national lexicon. However, companies such as Crestron, Nest, and new entrants like Canary are seeing increased penetration; this allows even the casual consumer electronics observer to experience the potential of IoT technology.

The Value Proposition still has yet to be articulated in a way that resonates with the broad market.
In a recent conversation I had with IoT expert & evangelist Greg Kahn, he made a great point – that the internet of things is currently seen as more of a macro-trend than a distinct product category. The connected world – and all of the high tech devices within it – is potentially so vast that the value can be hard to capture in a concise marketing message. Therefore, (I believe) marketers are struggling to convey the significance of this trend with the broad consumer market; there still needs to be a good deal of creating marketing and incentivizing done to drive the concept home. Only by delighting customers with great products and showing tangible, measurable benefits to consumers lives, will IoT enter the public consciousness in a way that mobile apps or the sharing economy have. Content marketing and effective storytelling will play a big role here. It will take time as leading brands focus on the specific value propositions of their technology platforms and product families.

By no means is the potential size and scope of the Internet of Things in question. It will still be a huge topic of discussion at CES (dozens of conference panels and keynotes will touch on the topic) and throughout the year(s) to come. The venture capital community agrees, with almost $8 billion invested in IoT startups since 2010, and that amount expected to roughly double in the next 5 years. The question is not if the IoT will become a thing, but when will that tipping point occur? Maybe it has already and we have yet to realize it – what do you think? Please leave a comment, and share this post with others if you find it interesting.

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What Businesses Can Learn From The Navy Seals

12/9/2015

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As I observed on the recent occurance of Veterans’ Day, I am grateful for everyone who has served in the military to help protect our great nation. Also, there are parallels and lessons to be learned from the military that can be applied to business practices as well.
This past summer I had the privilege of hearing a former Navy Seal and Seal team instructor, Andy Buchannan, speak at my company. It was a fascinating talk in which he not only described what a special group of people Navy Seals are, but he also skillfully applied the key tenets of Navy Seal Training to ways in which to improve business performance.
In his presentation Andy described the extraordinary levels of fitness, mental toughness, and teamwork required to become a Navy Seal – this is well documented (of Andy’s class of 140 entrants, only 32 made it all the way through the training), and Navy Seals are highly respected as some of the most skilled and reliable special forces in the world.
But Andy also described the approach that Navy Seal teams take to each and every one of their missions, and pointed out that companies and their teams can benefit from the same approach as well. Here are the five basic steps that he highlighted:
  1. Gather and analyze as much intelligence as possible – this often takes the most time for a mission but it is crucial to knowing the situation, assessing the risks, and designing a winning plan. Navy Seals spend as much time studying and analyzing information as they do anything else.
  2. Devise a detailed plan, and assume at least one thing will go wrong– Andy was quick to point out that things didn’t go according to plan on almost every mission, and that Seals are trained to “expect chaos.” This is why it is so important to work out back up plans for as many contingencies as possible – this applies to business project planning as well.
  3. Practice until it becomes a part of muscle memory – Navy Seals do countless dry runs of missions before the real thing, so that it becomes almost automatic. While it can be hard to do “dry runs” in a business situation, it does underscore the importance of having well-designed and repeatable operational processes that are consistently followed. This operational excellence then becomes the “muscle memory” of high performing organizations.
  4. Execute the plan - utilizing every bit of preparation, teamwork, and communication; make real-time adjustments as necessary. Here, Andy said that this is where the preparation and practice paid off. But he was quick to point out that successful missions also depended on constant communications between team members. If they weren’t communicating, they weren’t working as a team and thus endangering the mission.
  5. Afterwards, provide a rapid-retrospective for learning purposes – regardless of whether the mission went according to plan or not, without fail there would be a briefing amongst the team immediately after. This helped the team gain learnings that would be useful for future missions and for their practices in general. Business teams should adopt a “rapid retrospective” approach after each key event as well.
 So, today and every day, thank and appreciate our veterans (such as Andy) as well as our dedicated military personnel. Also borrow from their methods to help your business teams perform at a higher level.
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3 Take-aways from Airbnb’s “Spinal Tap Moment”

11/3/2015

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Building a brand is hard – especially in today’s ever-scrutinized media-centric culture. This is especially true for rapidly growing companies and start-up brands trying to get noticed amongst the flood of new competition, products, services, websites and mobile apps. Today’s marketers desperately try to draw customers’ attention to their brands, and often risk “disruptive” marketing tactics to do so.
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However, it’s also true that - as the members of the celebrated “mock-umentary” band Spinal Tap famously said - “It’s such a fine line between stupid…. and clever.”  The recently pulled local marketing campaign from peer-to-peer accommodation rental company Airbnb underscores just how true this can be. It also shows how tricky branding campaigns can be in today’s hyper-transparent world.

Airbnb's attempt at an edgy, disruptive message around its home city of San Francisco featured outdoor ads suggesting ways in which the city should use the company’s (formerly delinquent but now collected) tax revenue. The tongue-in-cheek suggestions included keeping the city’s libraries open longer, and filling expired parking meters. Unfortunately, Airbnb’s ads crossed the line from clever to stupid - they missed the mark in terms of tone and contextual appropriateness.  The ads were pulled in just a few days after many complaints from San Francisco residents and even some Airbnb employees.

Airbnb is a great company with a valuable service, but this was clearly a low-light for the brand, and an embarrassing gaffe by their marketing team. However, I don’t fault them for taking the risk of being disruptive.  As I said above, provoking thought and generating conversation can help brands get noticed by new customers, and can deepen engagement with existing ones. The mistake stemmed from losing sight of a few key brand marketing fundamentals – which I list below as take-aways from this situation:
  1. Know your audience – As the linked CNET article astutely points out, Airbnb should have known better than to be as tone deaf as they were. Understanding the needs and wants of those who will be seeing your ad is the first step towards positive engagement. It’s critical to ensure that your audience is in tune with your message, and will not only get the jokes, but also appreciate them.
  2. It’s not about you; it’s about them – Airbnb focused on its own tax plight with these ad messages, and the response was loud and clear: your self-absorbtion and presumption is a turn-off. What Airbnb failed to realize (or remember) with this ill-conceived campaign is that it’s not about the company’s opinion or agenda. It’s about customers - establishing an emotional bond with your target market. After all, branding is about getting consumers to desire a company’s goods & services based on emotion vs. a standpoint of assessing pure economic value.
  3. Advertising and PR are two different things – It’s easy to lose sight of this, but it can also be a critical mistake for marketing leaders. PR is the channel in which you can tell your story, describe challenges, and express your views. In fact, it’s expected (otherwise the press will do it for you). Advertising is to make people emotionally connect with your brand, and to become educated on the value of your products - period. Do not get these wires crossed, as Airbnb did this past week.
Consumers need to arrive at a place of brand loyalty on their own; it takes time and usually grows out of a series of positive customer experiences, as well as gestures and communications from the brand that support a sense of alignment between the company’s values and the consumer’s.

Start-ups move quickly, and they often feel as though they need to make “big statements” in order to remain relevant in the collective consciousness. What they also need to remember along the way is to never lose focus on delighting their customers. 

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4 Tips to Navigate A Sea of Marketing Technology

4/20/2015

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It’s no secret that marketing in today’s digital age is challenging and complicated, and becoming more so all the time. We live in an on-demand, hyper-stimulated world, where savvy consumers are armed with information and demand a high level of responsiveness and personalization to win their business.

Marketers need deep knowledge and versatility to keep up with rapidly evolving business channels (social media, e-commerce, mobile apps, etc.). They also have to mine big data, master content marketing, protect and perfect customer relationships, and tactically respond to nimble competitors. To do this in real-time, with a positive ROI, and under ever-increasing scrutiny can be overwhelming.

To top it off, today’s marketers are being inundated with sales pitches from firms that specialize in technology-based digital marketing and advertising tools – known as “martech” and/or “adtech” companies.  A massive industry has blossomed (growing to $120 billion within 10 years), consisting of over 1,800 companies - in over 40 areas of specialty – where the leading players are battling for (your) new business. There are even numerous industry conferences, blogs and publications to try and make sense of it all.

How does today’s marketer deal with this non-stop barrage of calls, e-mails, linked-in invites from vendors’ sales people? I wish I had a dollar for every time a mar-tech salesperson asked for “just a few minutes on my calendar” to pitch their “cutting edge technology” that would supposedly “make a huge impact on my marketing KPI’s and ROI” with “just a few lines of java script.” Not only is this stuff time consuming (a few minutes quickly becomes an hour) and confusing (lots of tech jargon), but it distracts from the daily job of executing the business at hand.  

How can you know to take advantage of the truly helpful stuff while not blowing your budget on unnecessary technologies, platforms, and tools? I have learned over my career as a marketing leader – often through mistakes – ways to “separate the wheat from the chaff” and engage useful vendors to help propel your marketing efforts forward.

  1. Know thyself. When speaking to martech vendors (or thinking of taking their calls), make sure you understand the benefits they can provide in the context of your business, its needs, and its constraints. Questions I constantly asked myself: “What do I need vs. nice to have? What are the strategic marketing objectives of our dept and our strengths & weaknesses? What can I afford in my budget? What am I able to measure & analyze? Can I integrate this with my IT resources? Who will run this vendor/platform/tool once purchased?”
  2. Let your KPI’s guide you. The best way to identify the marketing gaps - as well as if technology that can fill them – is to dig through your analytics and understand what your KPI’s are telling you. This will also help you articulate your needs and formulate strong relevant questions during the evaluation process. This leads to my next point…
  3. Ask tough, probing questions and learn to say “no” early in the process.You can always come back to a vendor down the road (don’t worry, the salesperson will gladly take your call), but avoid wasting time sitting through multiple rounds of sales calls just to be polite. If their product needs more than 1 or 2 demos to understand, then respectfully pass…
  4. Compare at least 3-5 competitors before pulling the trigger. This seems obvious, but you would be surprised how many times I have seen marketers get carried away by a skilled sales team, only to learn later that the mar-tech product was a poor fit for their business and/or inferior to cheaper alternatives. I like to work up a side-by-side summary of all the vendors in a spreadsheet, and then get all of the key stakeholders in a room and go through each element to determine the best overall fit for our needs.
Hopefully these tips can help you use your time, energy and resources more effectively to maximize your ROI while also maintaining your sanity. Please leave a comment to let me know what you think, or if you have other tips or ideas.


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Take-Aways From CES 2015

1/27/2015

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Having now had a little time to reflect on my observations of this year’s annual tech-fest that is The International Consumer Electronics Show (CES) (January 6-9 in Las Vegas), I would like to quickly share some thoughts on what I think stood out. Hopefully these musings are constructive and useful for past and future CES attendees alike.

A Higher Than Usual “Innovation to Marketing Noise” Ratio This Year – Over my years of attending CES, It’s become apparent that most of the hype for “innovative” products is really nothing more than marketing noise. Typically, you will see only a handful of products that are truly innovative in a given year. This year was a bit different – with a number exciting new categories emerging (see next bullet) There was simply more stuff to get excited about. This is important for this CE industry, as the main story for the past few years had been the dearth of truly new & innovative products coming to market. 


Hot: Wearables, Connected Things, & Drones; Not: Headphones & Phones – The hot new categories are well documented, but it is merited. The new “Tech West” exhibits at the Sands & Venetian - particularly for health & wellness - was a hive of excitement. The “Internet of Things” continued to gain traction, with more creative applications being developed (“smart rain jacket”, anyone?). Drones, always a thrill, are improving their performance at an impressive rate.

Smartphones, however, seemed conspicuously absent from the conversation this year. It seems that most of the iterative improvements (in screen size/quality, cameras, features etc.) have played out for now; phones took a back seat. Conversely, headphones were everywhere – but not really in a good way. Beats’ success has seemingly created an avalanche of me-too players, each trying to play up form factors and bright colors as design innovations. Headphones were in abundance, but just making, well, noise. 


CE Is Now Just The Tip of The Iceberg – Not really a new development as much as a maturing trend. Clearly a large percentage of CES attendees aren’t even in the consumer electronics industry, but are members of today’s broadly defined tech-based business community. They include digital media, apps, online platforms, and entertainment. In fact, a large number of so-called attendees never even visit the show floor; their business is conducted in meeting suites, cocktail lounges, and over opulent meals far away from the overbearing din of the show floor.


CES Is Bigger and Better Than Ever – Despite all of the griping about “surviving” CES, the show continues to grow in size, scope and sophistication (170,000 attendees, 3,600 exhibitors, 4 locations).  The organizers have done a great job to keep the “machine” running smoothly while keeping the event relevant. The continuing sense in the technology & digital business world is that one can’t afford not to attend CES. The high concentration of smarts, optimism, & opportunity for trajectory-changing business encounters make it one of the must-attend trade events of the year.

One last open comment to CES’ organizers: please find another week in which to schedule this show. Coming straight off the holidays and then the quick transition into CES make it challenging to get prepared for. While I’m sure they have their reasons for the scheduling, I’d like to lobby for perhaps something in late January or early February. Otherwise, next year’s CES will come around before you know it (January 6-9, 2016)!

Amongst the extensive media coverage of CES 2015, CNET has done a nice re-cap of this year’s show – check it out here:  http://www.cnet.com/ces/ 

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Big Data and Marketing: The Bigger the Better?

12/4/2014

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We just had another Cyber Weekend, and online businesses handled millions of transactions and collected billions of bytes of data along the way. “Big Data” (the collection and analysis of increasingly large, broad, and complex sets of observations from repeated events) is a buzz term right now. Harnessing big data and gleaning insights that enhance business performance is now considered a required resource for maintaining a competitive advantage. This is particularly true for marketers who drive strategy and tactics for their online or omni-channel businesses.

But in an age where marketers are becoming increasingly inundated with data about everything their customers do, I think it’s important to point out that bigger doesn’t always equate to better. Data is merely the raw material of useful information. It’s still as much of an art as science to get at the “ah-ha” moment – to collect, analyze and interpret the most relevant data, turning it into actionable and value-creating information. That information, and the knowledge of what to do with it, is what creates competitive advantage from big data. It is still as much about quality as quantity.

Of course, the concept of “Big Data” is not new, as what constitutes “big” is relative. 30 Years  ago a terabyte of data was considered a massive amount –only used by NASA and chess computers; today multiple terabytes of data are collected monthly by mid-sized retailers. But the term itself has recently come into vogue as our internet age now produces enough data to be awe inspiring by any standard (140 million people will make purchases - worth over $2 billion - on Cyber Monday alone), and IT costs have come down enough to store & process it all. Yet the question that remains in my mind is what to do with all of that data? Where does one begin to find the few nuggets of really insightful information in that sea of bytes?

This piece from SAS insightfully points out these connections between big data and good marketing: http://www.sas.com/en_us/insights/big-data/big-data-marketing.html

The recent obsession over big data would have you believe that the bigger the data sets (i.e. the number of records in a set of data, and the total number of data sets in a data warehouse) are the competitive advantage in and of itself. But this “more is more” approach does not really focus in on the critical success factor: collecting relevant data in an organized and well-thought out way – based on asking yourself the right questions before the data is even collected.

Check out this article by Forbes contributor Greg Satel. He also makes the case that marketing savvy is still needed in an age of big data and machine learning:  http://www.forbes.com/sites/gregsatell/2014/10/12/the-future-of-marketing-combines-big-data-with-human-intuition/

I am not a data scientist, nor a data modeling expert, so I cannot claim to know every last thing about big data. But I do have enough experience as a data-driven marketing professional to know that getting your hands on the right (most relevant) data, and then knowing what to look for (in terms of potential correlations) can separate good from great, and truly create a competitive advantage without wasting time, resources and money. A conversation I recently had with the CEO of a large marketing analytics company confirmed this notion, as he remarked “there is a lot of ‘fool’s gold’ out there with people thinking that big data equals good data.”

So, my point of view is that while the idea of pursuing big data make sense, it is more important (and often under-rated) that the best, most relevant data is collected; that the true skill lies in selecting the correct analytic approaches, and asking the right questions going into the analysis. A skilled marketer will lift themselves above their competition by thinking through these issues before diving into all those terabytes collecting in their data warehouse.


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Online Video and Strategic Marketing: Convergence at its Most Creative

11/7/2014

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While the growth and evolution of online digital content has been a developing trend for a while now, I continue to be fascinated in the ways that content and online commerce continue to converge and intersect. This is especially true when discussing the ways in which content marketing (also called native advertising) are playing out in the online video space.

Here is a cool article I found at Content Marketing Institute on the branding of content:
http://www.shopify.com/blog/9938694-5-ways-ecommerce-sites-are-killing-it-with-content-marketing

Online video’s growth as a marketing tool is playing out in a few different ways. Beyond the standard product and how-to videos (which can be dry and comes into play fairly far down the sales funnel) and more traditional online video ads, new & creative formats are exploding. Most interesting to me – as they open up vast possibilities – are user generated content and branded native content  (in various forms). User generated videos can help a marketer proliferate a brand quickly and at a low (or no) cost, but they give up control on messaging, brand positioning, and consistency of format; it’s a risky play. Branded video content takes a considerable amount of effort to produce and is expensive, but it is effective in building brand affinity in a deliberate and controlled way – important to keep today’s younger audiences from getting cynical about a brand.

This article discusses the challenges of creating the right video content for today’s consumer:
http://www.marketingprofs.com/articles/2013/11730/how-retailers-can-use-video-for-e-commerce

Focusing in on branded content – there are so many ways to get creative with this medium to entertain audiences while generating demand and branding at the same time. Marketers must cut through the noise and compete with so many forms of “see it now” media; they must meet the wants & desires of today’s over-stimulated consumer. I find fascinating how many different approaches are being made to solve the “must-see” content challenge. There’s long-form video, super short-form video (Vine), quasi-journalistic pieces, and the web celebrity supported user-generated content. Entire production companies – online content studios – are dedicated to this medium and it is an emerging business model.

This piece is helpful in understanding the role that online content studios are playing in brand-building for marketers.
http://sparksheet.com/whats-deal-content-studios/

Content studios are trying different strategies and business models – not only in generating real value for clients (brands, retailers, distributors and publishers), but also for monetizing their product. As such, we are starting to see some valuation being assigned to these powerful content generators, based on their content as well as they use it to generate revenue and profit. This places increasing importance on the role they are playing in digital marketing, branding, and selling, as the article below points out.

 http://contentmarketinginstitute.com/2014/02/branded-content-formats-rule-2014/

Cases in point: Maker Studios was bought by Disney last year for $1B, as the entertainment giant realized it needed to fill a strategic gap in providing well-produced branding-ready digital content. Secondly, online multi-channel network StyleHaul was just purchased by RTL Group for $200MM, due to the rapid growth of StyleHaul’s content network of thousands of fashion-oriented channels, and their unique brand-friendly business model which increased their profitability. Below are articles outlining the strategic thinking for these deals.

http://www.ibtimes.com/why-disney-dropped-nearly-1-billion-maker-studios-youtube-channel-1572752

http://blogs.wsj.com/cmo/2014/11/05/how-stylehaul-built-a-youtube-network-on-branded-entertainment-not-google-ads/

Video content - particularly branded content – will continue to grow and be subject to innovation for the foreseeable future. It’s tremendously exciting to follow and challenging to imagine which direction the trends will forge into the future. As an online marketer, it is imperative to understand the creativity that can be brought to this space, and how it can impact consumer behavior as well as attitudes towards shopping and brands. It seems to me that we are still in the early innings of this game, and anything can happen.


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“SnapAd”: Monetization’s Newest Case Study

10/21/2014

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Snapchat is currently one of the hottest, if not the hottest, startup in Los Angeles’ “Silicon Beach” tech scene. The mobile messaging company whose platform leaves no text or image “paper trail” is very popular with younger users, as they feel secure in expressing themselves more freely. It was founded in 2011 by Stanford classmates Evan Spiegel, Josh Meyers & others. The popularity of the free app has certainly caught the attention of the tech and VC communities, as a recent $10 billion valuation (despite zero revenue) will demonstrate.

However, with this spotlight of attention and a huge valuation comes pressure – perhaps even a target placed on the company’s back. Snapchat’s Investors want to see some indication that the free service is more than just an easily accessible toy; they want line-of-site to eventual revenues and a business model that can support such a lofty valuation. There are numerous competitors in the free text messaging space – all with their own spin but each trying to capture the same pie of eyeballs and fingertips. Even the media and hacker community is setting its sights on Snapchat - embarrassing e-mails from CEO Evan Spiegel’s college days were made made public, and a recent hack that made thousands of Snapchat users’ photos viewable by almost anyone.

In short, Snapchat needs to (now quickly) evolve from a popular, rapidly growing fascination into a serious company that makes money. Previous predictions of an in-app purchase monetization strategy have not yet materialized. And so it was recently confirmed by Spiegel that Snapchat is planning to introduce paid advertising on its messaging app (see linked articles below). Although there were few details on how the ads will work or be presented, Spiegel did indicate that the ads will be essentially content based, and will involve “stories,” a content product of which Snapchat users view over 500 million per day.

Although this development is no surprise – most free social media and mobile messaging app companies reveal their “secret” monetization strategies to be some form of paid ads – the interesting thing here will be if Snapchat can somehow create a “game-changing” monetization system where the ad product is intertwined with great content and user-driven threads.  This element is critical for it to appeal to young users who are turned off by traditional display-based brand advertising. Yet as the below articles (from Ad Age and Adweek) on this subject hint, a good ad-based monetization strategy can still be a clever, creative, highly nuanced art form. It will have to be, seeing how the ads themselves will probably disappear as quickly as the messages – after about 10 seconds – not what you want if you’re an advertiser.

Clearly, Snapchat is highly focused on monetizing its platform: it has made some notable hires of former Facebook execs, one of the better examples of a company that has effectively monetized its user-generated content. Some say this new & evolving business model will require “brands..to figure out how to get super-creative” (Shafqat Islam, NewsCred), but I feel that the onus will be much more placed on Snapchat itself. It will need to create a killer advertising product that is deeply rooted in (disguised as?) engaging content that resonates with Snapchat’s millennial user base.

If that approach can be successfully executed (a big if…), major brands will follow and the business model will get real traction. Then the $10 billion valuation will quickly start to look very reasonable.

Read these pieces (links below) describing Snapchat’s first advertising strategies; let me know if you think they are on the right track.

Ad Age  article: http://adage.com/article/digital/snapchat-ads-coming-ceo-spiegel/295345/

Adweek article: http://www.adweek.com/news/technology/snapchat-will-reportedly-debut-ads-and-videos-159605
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Alibaba: A Giant Crosses the Sea and Lands on America’s Shores

10/13/2014

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Alibaba is big. And it is impressive: its growth, its affect on China’s culture and its role in China’s enormous economy give it the ability to move markets. Even the US Stock market, as it did during the company’s massive $22 billion IPO – the largest ever for an online tech company – on September 19th, 2014. As Alibaba (NYSE Symbol: BABA) went public, it was deemed (by its $215 billion market value) to be bigger than the US’ own e-commerce behemoths – Amazon and Ebay – combined. 
The numbers that indicate its success are pretty staggering: $270 billion in gross merchandise value from 13 billion annual orders, over 280 million registered users, 100 million visitors – per day, and a revenue growth rate of about 45% year-over-year. But many in the US – especially those that don’t follow e-commerce or stocks – are unaware of any of this. They do not know of the name Alibaba at all. To clarify, Alibaba is a China-based e-commerce company that (among other things) connects buyers and sellers of millions of products. Than how can it be that this company is so little known by the American consumer?

There are multiple reasons: the company has not targeted the US market (yet), it has done no advertising, and no significant PR in our media (other than in recent days surrounding its IPO), and most importantly, it’s English language website has not been widely discovered – yet. But Alibaba is too big to ignore – the splash that the IPO created is clear proof of that (up some 32% on its first day of trading) showed that we in the USA need to understand that the center of the online universe is not necessarily always going to be Amazon, Ebay, Google, Facebook, and Youtube. The size of China’s market will eventually dwarf ours, and its top players will certainly be bringing their size, resources, pricing power and creative ideas to our shores in the not-too-distant future.  

So in the spirit of learning more about Alibaba and its charismatic founder Jack Ma, and sharing about the firm’s massive growth and success, I have read a number of articles, etc. on Alibaba’s rise to dominance (see links below). I have culled 5 key reasons why it has become such a powerful player in today’s e-commerce world.

Top 5 reasons for Alibaba’s Wild success:
1.  A focus on solving problems for B2B customers - When Jack Ma started Alibaba, he was fascinated by the scope and power of the internet. Yet he also recognized it as a way to address one of China’s big problems: struggling small business growth amidst a poor commerce infrastructure. Ma made e-commerce a core solution for Chinese small businesses to find markets and flourish. Ma himself said in comparing e-commerce in the US and China: “In US, e-commerce is a dessert. In China, it's a main course."

2.  An early mover in a huge addressable market – It’s no secret that China is the largest e-commerce market in the world (in one of the largest economies in the world), and Alibaba has done a good job of jumping out in front of the competition to gain significant share. However, experts agree that there is still lots of room for growth, and with new competitors now entering the market, Alibaba knows that it must continue to improve its offerings and its technical platform to maintain its lead.

3.  Building an online ecosystem – Alibaba does a huge amount of e-commerce, but it does not stop there. It understands that you need to create a platform with multiple services, experiences, and models in order to create a “sticky” customer. So the company also has successfully launched payment systems (Alipay), financial services, Yu’e Bao, and consumer focused discount shopping sites Taobao and Tmall. This allows the company to deepen its customer relationships and diversify its growth channels.

4.  A visionary leader who surrounded himself with a strong team – As is mentioned above, Jack Ma had a strong vision that the internet would work well in China, and there is no doubt that he has executed on that vision. But he was also smart enough to know that he couldn’t do it alone. He have built a strong team of leaders, partners and investors that include Joe Tsai (in charge of finance & legal), Jonathan Lu (in charge of operations and marketing), Jerry Yang (Yahoo founder and BABA board member), and Japan’s Softbank (an early investor and supporter)

5.  A penchant for keeping humble priorities – In an interview for “60 Minutes,” Jack Ma turned an American business maxim on its head when he laid out his strategic priorities: “customer first, employees second, and shareholders third.” He raised some eyebrows with that statement, but pointed out that if the first two are accomplished, then the third priority will take care of itself. Interesting perspective from a man now with stake in his company worth $25 billion.

Alibaba will be a fascinating company to follow in the coming months & years. As China’s e-commerce market continues to grow, how will increasing competition from both Chinese start-ups as well as US giants (Amazon, Ebay and Google all are making a play for the China market) impact Alibaba’s market power and strategy? How will the Chinese government (who has created a friendly environment for Alibaba to succeed in China) play a role into the future? What does Jack Ma have up his sleeve next (many expect several acquisitions with the newly raised capital). I will be watching this giant that has now come onto our shores – and so should you.

You can read some of the articles that I found on this topic at the below links:

Wired article on Jack Ma

Bloomberg Article on Alibaba's success seen through Foxconn founder's eyes

Stanford University Article on Alibaba success factors

DW Article

DMR Piece on Impressive Alibaba Stats

See WSJ video on Alibaba and Chinese e-commerce landscape 

Thanks, and please feel free to comment.



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    Luke Grant is an experienced marketing and business development executive, with over 15 years of experience in e-commerce, marketing technology, mobile and consumer electronics.

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