Friday, September 29, 2006

Internet & Marketing investments

Ok the post i'm gonna do is quite ambitious for me. I think i'll update and correct it several times.

To try do to relevant things, i'll start to say that it mainly concerns Marketing investments for Internet companies : as Yahoo!, Kelkoo, Msn, Myspace, Google... In few words, companies which do Internet as core business. This is my vision of Marketing in 2006 just before to have my new courses with Mr Julien Levy (writer of Mercator and also director of my master program at HEC)

Let's dissociate 2 parts in the Marketing :

. The Product design/conception (Marketing in the product/service).
. Marketing actions as acquisition/loyalty for the product
(Marketing around the product/service = Messages).

1. Marketing in the product (conception) :

It's the way to design the product/service taking care to his market keys factors of success.
This in order to propose a solution answering to the target needs and to generate value.
From my side : is the best example of excellent marketing approach in the product conception. All features and options which make the product success are activated by default. We have to know that 90% of users never change default configuration of the product.

On the Internet, this part is mainly manage by US where the product is developed. That's one of the things i've understand at Yahoo!, it's seems to be worst at Google and MSN.

On several products, the marketing approach of the conception is suffisant to recruit users massively. For example, is recruiting 250 000 news users with a 0$ marketing budget, simply by the velocity (viral marketing) of the product.
Be careful it's not a promotion action, viral marketing is not a campaign (which is more buzz marketing), the virus is the product, not a message around the product.

The web 2.0 (defition : "content produced by users" and not by the web platform editor anymore or for some others : "value generated by users" cf Olivier Ezratty), which is characteristic of the product, allows (in addition to not spend money on content production) to let the users make the promotion of the product (mostly not the company role anymore). This fact is huge to reduce marketing costs and companies have to include this logical in their web product / web services ! (when it's relevant and possible).

Most of the time, FR marketers don't believe in that, i've understand that it's caused by the fact that they don't manage the product so this fact maybe doesn't valorise their expertize :)
Basically, for many web marketers, you need to spend millions of euros to recruit millions of users. I hope it will change, but some of them seem to be so brainwashed by their "consulting" & communications agencies that they can believe that myspace need to buy Skyblog to generate value in France...

Quite different of the viral marketing, you have the network effect which is simply buzz i think. I'm not sure to be able to explain the exact difference now, maybe my binomial Carl will try to do it.

The brand definition is also very important in the product/service's conception. Sometimes you need a strong brand like Yahoo! but not in the case of a product based on customization & personalization the brand have to be less important to let user at the first plan.
"Myspace" defines more each member's space than a strong brand. And it has to be like that.

One more thing linked to the product but which is linked to promotion too is the On-network Marketing. It's the art to promote the product on the product and it's pretty relevant when the company have several services or products in the same Network. (example on Yahoo! Portal : ads to promote Yahoo! Music on Yahoo! Mail). Yahoo! it's the most advanced company on this expertize and i was in charge of it for France as On-network Marketing Manager.

2. Marketing around the product (promotion without ability to change the product)

I'll start to list all kind of marketing actions :

. Off-Network Marketing :

> SEM :
> SEO :
> Affiliation :
> Partnership :
> White labels
> Banners campaign
> Mini sites
> Distribution (more business development than marketing) :
> Address location
> Barters
> PR
> Events
> TV ads
> Print ads

. On-network Marketing :

> Banners campaign
> Network integration (promotion of a product B on a product A)
> In product actions (to develop product usages)
> Newsletter

Only the relevant ones have to be used to promote your product/service.

Let me take an example,
Kelkoo has never invested on KK brand, cause if you look at the way people are buying products on the Internet :

a. First they tape the generic name of the product in their favorite search engine
b. Find the product with the best price on a e-commerce site after comparison.
c. Buy it

> Most of the lead realized on shopping engine as KK are buyed by KK...

Shopping engines have to buy most of the traffic cause it's seems to be impossible to gain customer loyalty. So all actions related to brand marketing will be ROI negative. But SEM, SEO ,Whites labels, Partnerships are pretty important to recruit users and marketing teams have to develop ROI methodology to ensure that they are not buying the traffic more high that KK will be able to monetize it.

Yes for me, on the Internet, no reason to define Marketing as cost center. We can make it generate direct financial benefits.

Track Costs, Track Revenues, Test almost all available solutions, Learn, Optimize ROI, only invest on ROI positives actions.

Try to be 100% Objective.

Saturday, September 02, 2006

Breaking news about myspace

In a direct challenge to Apple's iTunes, MySpace has announced its intention to sell songs from the 3 million unsigned bands on Even more surprising: the songs will be sold as unprotected MP3s, free from DRM. MySpace co-founder Chris DeWolfe told Reuters: "Everyone we've spoken to definitely wants an alternative to iTunes and the iPod. MySpace could be that alternative."

The new feature will be powered by Snocap, the music distribution service from Napster founder Shawn Fanning. Snocap only recently launched a MySpace music player, which allows users to buy unprotected songs via Paypal. Snocap charges the artists a small distribution fee, and most of the tracks are DRM-free. Unlike the fixed-price model of iTunes, artists on Snocap set their own price. Once the service is live, DeWolfe wants to add copyright-protected songs from major record companies, and it's rumored that MySpace has spoken to EMI regarding the move.

It's worth noting that America's second largest social network, Facebook, is already a promoter of iTunes - it's currently giving away free iTunes tracks to members. YouTube is also getting into the music game: in mid-August the site announced its intention to host "every music video ever created". And in late July, booming social network Bebo launched Bebo Bands, with a near-identical setup to MySpace music. But the move to sell music directly through an embedded player is a bold one: MySpace users are notoriously hard to monetize, yet they continue to pay for music downloads. This latest addition could help MySpace monetize its users far more effectively, dramatically increasing the site's revenue. With a $900 million search deal under its belt, MySpace's revenue opportunities are looking better than ever before.

However, the move could spell trouble for some of the startups that are plugging in to MySpace. The music community ProjectOpus released their own MySpace music player earlier this week, providing a link to a page where users can purchase the track. Sonific, another startup, has also begun an invite-only beta of its music player for MySpace, blogs and social networks. Sonific is focused on building a massive database of licensed music, and users can buy the tracks through iTunes or CDBaby, with Sonific pocketing the affiliate commissions. Once MySpace begins to offer music sales directly through its own player, there's a risk that these services could be sidelined.

Article found on Mashable / Reuters.
I'll comment it when i've got some times ;)