All Over Again

30 06 2010

Deja vu is a very helpful navigational device. No matter if you have a map or GPS, in your mind you know that you have been here before, even if only in a dream. You recognize the scenery. The views. The people. The conversation. The highway.

Funny, but as we wrap up another term of Evolutionary Marketing, I can’t help but feel a little deja vu coming over me. You see, when I started this whole thing a dozen years ago, the Really Big Deal was those few websites that actually sold something. You know. Metaphoric shopping carts. “Add To Cart” buttons. “Check out” buttons. Get your credit card.

Because it is all happening again. As companies large and small have come to heed the call of Facebook by developing fan pages, a disturbing little reality set in. You can’t…um…really do a whole lot there other than chit chat and link back to your main website.

But the folks at The Onion, America’s great parody news source, has turned its Facebook page into a store.

Yep. Just land on their FB page and click the Shop tab. Instantly you are able to purchase things. Just like you would if you were on the main Onion site.

And that is simultaneously the beauty and the commercial imperative of it. As we have discussed so many times, Facebook is where the people are. Websites are old hat, and you still must have one. But if everyone is starting at FB, then you are probably losing a lot of customers. It would be like McDonald’s having this giant building for custoemrs to come in, marvel over the Happy Meal toys, meet Ronald, and smell the hamburgers cooking. But then have to drive down the street to actually buy one.

No sale.

So does this mean that FB is going to rapidly turn into one massive e-commerce, carts-a-ringing, ears cha-chinging e-commerce site?

You betcha.

Because they have to. It’s a dog-eat-dog world out there, and you, I and everyone else are wearing Milk Bone underwear. To not offer merchandise is really just one big tease.

And that won’t pay the lease.

Of course, FB stands to profit handsomely from this. Their ad revenues are said to be pushing $1 billion as it is. Imagine now if they take a portion of every sale as a commission for allowing the little e-commerce app to run? Yeah, one more reason to watch for the IPO. This baby is going to soar.

You can count on this, though: FB co-founder Mark Zuckerberg never really quite saw the far-reaching implications of his little dorm room baby. It was really all about meeting girls at Harvard. Now the fastest-growing demo is 50-something women, followed by other geezer age groups. And we (yes, I proudly acknowledge that I am part of the geezer demo) have money to spend. Adding shopping capabilities is the icing on the cake. Or a few more gallons of black ink on the income statement.

The only difference between this and a dream, is that we truly have been down this road before. I never could have dreamed this.

Dr “Continue Shopping” Gerlich

Mo Bility

29 06 2010

Ten years ago, I was doing a bunch of contract work for a San Francisco company. I had to get online pretty much seven days a week. As long as I could find a place to dial out, I was fine.

You heard me. Dial out. Back then we were tethered to land lines. Heck, even some motels back then were late to ditch their old PBX systems in favor of phones with real dial tones. It was the first question I asked at the front desk, not “Do you have any vacancies?”

Today, of course, we take it for granted that we are going to have internet access in most places, and wirelessly at that. But what about in our cars? I was somewhat surprised this had come up for discussion at USA Today. Turns out that many drivers are demanding in-car internet, especially younger drivers. Safety, of course, is a big issue in many people’s minds, but that could be settled by simply making the internet unavailable when the car is in motion.

Ah, but what about the passengers? What about the kiddos in the back seats who need something more than 10 DVDs to keep them company on the long drive to Disney? Must they, too, be in internet exile?

And does this mean we have evolved to the point that we think the internet should be available everywhere? As in an entitlement? Maybe so. Apparently, we just can’t live without it.

But while USA Today readers debate whether cars should function as mobile internet receivers and routers, consider that we already have such capabilities. Verizon”s MiFi Mobile Broadband Receiver is a 3G device that functions like most mobile wireless cards, except that it is also a mobile hotspot with the ability to support 5 devices.

Trip saved, thank you very much.

These devices are now on sale for $50 with a 2-year contract (up to $60/month, depending on data plan). It’s a great deal, because it is, in essence, exactly the same as any internet service provided in a moving car. Both systems would rely on cell signals and coverage. In other words, the ubiquity of the internet is completely dependent right now on cell phone providers and their towers. But Verizon’s product trumps an in-car system because it can go anywhere.

Like in your hotel room.

True, we still have not solved the driving-and-computing problem (or texting, Facebooking, etc.). No amount of laws or motion regulators are going to solve this problem. Only education will. Or seeing the remains of your friend’s car after he wrapped it around a tree mid-SMS.

Yes, these are but artifacts of a society still coming to grips with the power of mobility. We need it. We want it. We just have to learn how to use it responsibly.

Sure, some day cars might also become mobile hotspots. I’m sure that in my lifetime there will be complete 100% coverage (not just ATT’s “97% of Americans”). We will be able to go online anywhere. Anytime. Anyhow.

And I kind of like that. Sure beats looking for a land line. They’re so 2000 anyway.

Dr “Anyone Want To Buy A Modem?” Gerlich

Spies Like Us

28 06 2010

In recent months I have noticed an interesting array of ads down the right column of my Facebook page. Amazingly, nearly every one of those ads somehow match words and subjects I have used in my posts and even private FB messages during that time. For example, yesterday I had an ad for something in Boston. Only a couple of days prior I had mentioned in a personal message my desire to return to Boston one day.

Other direct hits include ads for bikes, Sudoku puzzles, music by Joe Bonomassa, Marketing degrees, and online education. It’s almost as if Facebook is telling its advertisers, “Hey…over here! This guy just mentioned your key word in a post!”

Some social critics might call that spying. As a Marketer and advocate of online advertising, I just call it being clever. Still, many folks find this kind of advertising intrusive. Never mind that FB, Twitter, et al, are free, and we have agreed to a very lengthy Terms of Service Agreement (which we all read from start to finish, right?).

But apparently the FTC is starting to sense the frustrations citizens have with online advertising. Twitter just settled with the FTC over a privacy matter dating to 2009 in which user privacy was compromised. And now a large coalition of online advertisers have chosen to be more transparent in how they selected you to receive their ads. In an effort to self-regulate, these advertisers are allowing consumers to actually spy on them. And if you don’t like what you see, the you can opt to not be exposed to their ads.

How’s that again?

Now I know there are those who will argue that self-regulation is a joke. Just look at the banking industry. Airlines. Telecommunications. But it really can work. The alternative is to invite the hand of Big Brother into your board room. Apparently these advertisers understand the importance of getting their act together before someone tries to do it for them.

I for one would love to see the algorithm used by Facebook, Google, and others to determine how to place ads in my way. Surely they have missed some golden opportunities (are they not watching all of the Gowalla check-ins I do from restaurants? Sheesh.). Yet the mere mention of “Boston” sends them into an ad-placing euphoria. Maybe Facebook sensed some italics in that private message, a real yearning to return to the place I visited last summer. Like perhaps because there was unfinished business (of which I am not even aware)? Or was it because some outfit purchased that key word and wants to shove it down every Boston-loving person’s throat?

Maybe there really is justice in this world. Even though we have all chosen to be residents of Facebooklandia, all of those ads can become bothersome. The next thing you know, some enterprising advertiser will figure out how to capture my thoughts and sending matching vendors to my smartphone. By reading between the lines, though, these advertisers today are realizing that the FTC may truly be working in our self-interest. Maybe we really do not want to see the latest deals in Boston, be enticed by Sudoku puzzles, or know when and where to purchase Joe Bonomassa tickets.

You know, just for fun it might be entertaining to drop a few bogus key words into my posts and messages. Just to see if anyone is paying attention. Like North Dakota. Sushi. Beyonce. And other things I don’t like.

Because I can have a mean streak running through me at times. I’d probably just elect to just let those ads run and cost someone plenty for the privilege of advertising to someone who really doesn’t give a rip about their state, food or singer.

Yeah, there really is justice in this world.

Dr “Ad Buster” Gerlich

Hulu Hoop

27 06 2010

I have gone on record many times as saying that, once a website starts to charge for content, its days are numbered. After all, I subscribe to Wired Magazine Editor Chris Anderson’s proposal that the future of the online experience is wrapped up in one word (and the title of his latest book): Free.

It’s a great idea, even if it is a little too idealistic at times. And so when “Hulu announced earlier this year that it was pondering adding a tiered service plan to its offering, I scowled. No way, I blogged, would people pony up another $10 a month for something, when we can already watch a slew of content for free at Hulu. Or elsewhere. Heck, we are already nickeled a dimed by so many vendors as it is: satellite radio (if you still have it), Vonage (again, if you still have it), photo storage sites (for those of us with thousands of pics). Why would I want to shell out another Hamilton just for the privilege?

But now I think otherwise.

Here’s the deal. Subscription Hulu has the distinct possibility of upending the cable and satellite TV industries, or at least giving them a serious run for their money. How much are you paying for TV each month? What if Hulu gave you practically the same, but for only $10?

And that is pretty much what Hulu intends to do. By partnering with virtually every network, they are not exactly disintermediating television, but they are sure lopping off a bunch of fat. With the ability of viewers to watch programing on computers, smartphones, and even Wii consoles, it cuts the bloated midsection off the coax-tethered mainstays. Imagine having a virtual library with thousands of TV shows from which to choose. It’s a time-shifter’s dream come true.

Of course, if this proves to be successful (and I now think it will), it invites even more tiered service packages. Hulu is lean and mean, and does not require miles of land line or an armada of orbiting satellites to make it happen. That translates into an enormous cost advantage. And in business parlance, that is a sustainable competitive advantage.

Of course, the real question is whether people will ditch their cable and satellite in favor of Hulu, or just add Hulu to their stack of monthly bills. To be honest, I bet Hulu doesn’t care. Just as long as you float them a ten spot every 30 days, they’ll be happy.

Dr “Cut The Cable” Gerlich

Snooze Ya Lose

26 06 2010

This just in: Major retailers are now using web sales so they can compete with pureplay online businesses!

Is that coffee I smell?

And in other news, this is 2010. Yeah. A lo-o-o-ng time after the whole Y2K non-incident. A dozen years after I started teaching e-commerce. And some 16 years after the general release of the internet as we know it.

So why did this take so long? Well, it’s not that BAM (brick-and-mortar) retailers didn’t do anything. It’s just that what they did was rather half-baked. Some (Target, Toys ‘R Us, Borders) forged relationships with e-commerce giants like Amazon (which handled the e-comm function for them). Others merely had a web catalog, but expected people to…drumroll, please…get in their cars and come to the stores to make the actual purchase. And a few…a very few…like Best Buy…actually got it and integrated their stores with the web, allowing cross platform buying and distribution.

Sure, critics can argue that e-commerce still only accounts for 7% of all retail sales in the US, but that’s $134 billion. Nothing to sneeze at, buddy. And when a recession is going on, folks tend to get a little desperate.

So today many more stores are now fully embracing e-commerce, running their own online stores, and installing web kiosks so that customers can search and/or buy online while in the store. Other chains are ditching clunky cash registers from the past in favor of PC-based POS (point-of-sale) devices that not only ring up sales, but also allow clerks to check availabilities online.

Still, I find it alarming that many large chains have, up until now, not fully embraced e-commerce. Lip service is not a commitment, and it appears all the talk of multi-channel retailing preached in text books is more wishful thinking than reality. Stores touted their online presence, but it was more hyperbole than hard selling.

More than anything, this is recognition that the big BAM retailers finally realize that Amazon-Zappos is for real and here to stay (Amazon bought the fabled online shoe retailer late last year). In 4Q of 2009 alone, Amazon’s sales were $9.5 billion. Yeah, do the math. In just three months, Amazon accounted for 7% of all 2009 e-commerce sales.

If that’s not enough to awaken a sleeping giant, maybe we need to skip the coffee and go straight for the Red Bull. Because the next headline may be an obituary.

Dr “Snooze Ya Lose” Gerlich


25 06 2010

We are creatures of habit. We eat in the same 8 or 10 restaurants, and probably order the same thing at each one. We have “our” brand of cola or beer. We get dressed the same way. We even shave the same way (I’m speaking for the guys here), because if you don’t, you might accidentally cut off your lip.

And we probably use the same search engine. Which, for Google, means about 70% of us.

So if you are Microsoft and still trying to figure out how to position their Bing engine against a Goliath, you have to be smart. It’s going to take more than just a pretty landing page to get people to switch. After all, Google has mastered the search experience, even adding music listening options (via for those times you are searching for a tune.

But Bing is hanging its hopes on the fact that many of our searches are entertainment-related. Not just music, but also TV and movies. While Google has done well to buy YouTube, it has not yet fully leveraged that strength. Furthermore, as we discussed yesterday, a lot of YouTube’s content is actually user-posted clips from copyrighted TV shows and movies.

Microsoft has dodged that bullet by forging relationships with dozens of companies to be able to provide over 20,000 complete TV episodes, courtesy of Hulu, CBS and Viacom. Oh yeah…Viacom…the company that just lost a law suit with Google. Well, at last the Viacom content on Bing has their blessings.

Stir in movies, music and video games, and you have a complete entertainment portal.

While Bing is not likely to unseat Google from atop search rankings any time soon, this is a clever effort to carve out a little corner of the market. Other search engines hadn’t a clue in years past, trying to fight the giant by facing him head on. Bing, on the other hand, has found a crack in Google’s armor, and is driving a small wedge. Yes, it is a small crack, but a crack nonetheless. And if you happen to like the entertainment search features, maybe you’ll stick around long enough to search for other things as well.

This is just plain good marketing. It seldom if ever makes sense to confront giant competitors on their own terms. No, you have to make your own terms, find your sustainable competitive advantage, and make the big guy wince.

And wince they will. I bet it won’t be long before Google responds. Which means that Bing had better be prepared for a tough fight, because Google is not known for just lying down.

For now, I find it all quite entertaining. Because there are companies competing for my eyeballs. And I don’t have to pay to look. That’s a habit this creature doesn’t mind at all.

Dr “Search Me” Gerlich

Copyright Or Wrong

24 06 2010

I tell ya, this whole internet thing has opened up a few enormous cans of worms. Who owns the stuff that people post? And who is responsible for enforcing copyrights?

Nearly a decade ago, Napster was shut down by court order because it provided a playground for folks to share MP3 files. The RIAA then proceeded to sue everyone from 8-year-old kids to grandmas, all because they willfully posted songs in a place where others could download for their own use.

But in a court ruling yesterday, it seems there is a new twist in the interpretation of the Digital Millennium Copyright Act. A U.S. District Court tossed out Viacom’s $1 billion suit against Google/YouTube, arguing that Google was not responsible for content its users post to the site. Every minute a full 24 hours of video is uploaded to YouTube, making policing a near impossibility. The judge ruled that, in effect, it was up to Viacom to constantly monitor YouTube (and the entire internet) to see if people are illegally posting their copyrighted material.

Good news for Google, bad news for Viacom.

The judge also said that this model is perfectly workable, citing a 2007 instance in which Viacom identified 100,000 of its copyrighted files on YouTube, which YouTube then removed.

Still, the tone is very different today than it was in 2001. Sure, the purpose behind YouTube is mostly just to watch, rather than download for personal use (although this is amazingly simple using the Safari browser on a Mac). Today, most people no longer care about actually owning the file (music or video). It’s more about simply being able to access it when you want it. With broadband and smartphones, Pandora, and even legally purchased songs on iTunes, the original Napster model is irrelevant today.

But if companies now have to enforce copyright, we must face facts: Viacom is a huge company with the internal resources to scan the web for scofflaws. Little guys don’s have a chance. Furthermore, the judge has sided with all web site repositories of such materials, saying that al are not able to or responsible for checking for that nagging copyright. But Google/YouTube could certainly come closer than many of the smaller sites. Still, even Google is off the hook.

Which means that if you are the copyright holder for anything, you’d better be prepared to protect it. Because you aren’t going to get any help from the courts.

Dr “Time To Get That Shotgun” Gerlich

Cents and Sensibility

23 06 2010

It’s funny how people behave when it comes to pennies. Some folks will actively seek out the penny slot machines in Vegas because the initial stakes are so low. But then they will pour copper coins into them all day long. Other folks play penny stocks in hopes of turning a quick fortune. After all, a stock that goes from 1 cent to 2 cents has risen 100%.

And then there are the folks who play the penny auctions, like at Quibids. how could you possibly go wrong when you’re only tossing pennies?

Easy. Even though bid increments are usually only 1 or 2 cents, most of the penny auction sites impose hefty bid fees. Like Quibids. Each bid costs 60 cents. Every time. You could win the bid on an item that ultimately sold for $1, but if you were only one among two bidders, you could easily rack up $30 in bidding fees. Total sale: $31.

In order to play at Quibids, bidders have to buy a pack of bids ($27 for 45 bids is the smallest pack available). That’s kind of like food and beer tickets at the fair. You don’t want to waste tickets, so you are implicitly encouraged to keep eating and drinking. And bidding.

But the auctions are somewhat rigged. Bidding is often fast, but each time someone raises the ante, the countdown clock is extended a little longer. Quibids wants to give everyone, and I mean everyone, a chance to use up those bids. Because it means 60 cents each time you click. And since they already have your money on those bids, they are helping you return to the ticket machine for more.

Quibids doesn’t make money on the final bid; the cash is in the bidding. Let’s suppose they are selling an item they paid $30 for (and might have a face value of $100). It only takes 50 incremental bids of 1 cent to reach $30 in revenue for Quibids. Cha-ching.

And what about the poor sap who loses the auction? You see, the psychology is in place for this thing to get out of hand, because each time you bid it is you who is out 60 cents. So on that $30 item that ultimately sells for 50 cents, Bidder #2 is down $15 just for playing. And losing.

To help set people at ease, Quibids offers losers the opportunity to purchase (at full face value) the item they missed out, minus any bid fees paid. But the bargain no longer exists at that point. You have to win the auction in order to reap any benefit.

Which is why I am not playing.

The merchandise array is a mash-up of whatever Quibids is able to secure from retailers and wholesalers. It’s kind of like, but with a hefty dose of insanity stirred in for good measure. Penny auctions are normally a great deal for the auctioneer, and a lousy one for the losers.

I think I’ll just keep stooping over to pick up pennies I find on the sidewalk. I toss them into a coffee can of “found money.” I’ve got nothing to lose. Except maybe my back.

Dr “Take Stock Of That” Gerlich

Fighting Words

22 06 2010

Everyone loves a price war. Well, most of the time.

Yesterday’s news carried the tale of the ongoing feud between and Barnes & Noble Booksellers. Both sell fairly comparable e-readers; B&N opened the round by announcing it had lowered the price of its Nook from $259 to $199. Amazon called and then lowered the bid by $10 to $189 for its Kindle.

And somewhere in the middle of this we forgot that this is really all about a monumental shift in the way we consume print media. Oh, and never you once mind that Apple has been missing from this little war, opting instead to sit back giddily as it counts the receipts from selling 2 million iPads in two months (starting at $499).

At stake here is how magazines, newspapers and book publishers deliver content. Music has gone digital. Video games are in the progress of doing so. And movies are streaming into broadband homes faster than Blockbuster can say, “Can someone get the license of that truck?”

There’s a lot at stake here. There’s a ton of money to be saved by eliminating paper, printing and distribution costs. But reading is a far different experience from watching a movie, listening to music or playing a game. You see, there’s that highly tangible aspect in reading that is completely missing in the other three. Ink smudges on fingertips. Doing the morning crossword…in ink. Flipping the pages.

And therein lies the problem. Reading is a very rich user experience (well, for those who like it, anyway). Turning the page of a book is a metaphor of progress. I own both Kindle and iPad, but do not read books on them (opting to limit my print consumption therein to only magazines and newspapers). I just can’t let go of my books, though.

Because I like to lay on the sofa to read. I like to go to sleep with a book hopelessly splayed across my chest, or fallen to the floor. And when I travel, I always lug at least one tome with me for company. Yeah…and the Kindle or iPad comes along, to.

The transition to e-books is probably going to be the toughest one for readers. I can see college students loving them, though, as texts slowly become available in this format, but will these same people continue to read e-books after they complete their studies? I have my doubts.

While music soothes the hearts of beasts and all that, books represent an escape. We become one with the protagonist; we dig in our heels against the antagonist. We journey together.

Manufacturers of e-readers understand this problem, and have gone to great lengths to enhance the page-flips. But it’s just not the same as holding a real book. Nice substitute, perhaps, but only a facsimile.

It helps not that we are talking about the oldest form of media in the history of man. Printing has been around in one form or another for over 5000 years. It’s hard to let go of something with that much legacy. In contrast, audio recordings date only to the mid-1850s, while photography dates to the mid-1820s. It’s much easier to accept new technologies when the old one hasn’t been around too long.

But if and when we do embrace this change, it is going to radically change yet another retail sector. Bookstores (if they exist at all) will feature kiosks at which we dock our e-reader for downloading content. A more likely scenario, though, is already in place with current e-readers: wifi and/or cellular transmission.

In the mean time, I see more rounds of price-cutting. I am confident we will break the $100 barrier. It is only a matter of when and by whom. The race will be to get the hardware in everyone’s hands, because the real money is going to be in the sale of content.

That is, as long as people turn the page on history and move on to a completely paperless society. But I don’t see the end of this chapter coming any time soon.

Dr “Still Old School” Gerlich

The Music Went Thataway

21 06 2010

If the global economy is in a recession, then the music industry is in a depression the likes of which the 1930s could not begin to compare. Aside from travel agents, I can think of no other industry so completely altered, even obliterated, by the internet than music. Here is the sobering reality: People just aren’t buying music liked they used to.

Between music piracy (thank you very much, Napster) and now legal music downloads (over 8 billions cha-chings for iTunes), the industry is in a very altered state. CD sales are down over 50% since 2000. And although everyone (especially Apple) is happy about the fact people are actually buying music again, it does not begin to compensate for the lost album sales. When you can cherry-pick the songs you buy, economizing is easy. Rather than spend $15 on an album with two good songs, you can get both for $1.29 each. And then go raid the next album.

The industry has consolidated since the 1990s, when there were six major labels. Now there are four. Well, actually, maybe only three. Because EMI has smelled the coffee and repositioned itself as a rights management company. As in digital rights.

In this industry it’s evolve or die. And EMI has chosen to evolve. Of course, there’s no guarantee that shedding a vestigial tail in favor of opposable thumbs will deliver a bright tomorrow. But it sure beats rolling over and dying.

The future may truly be in licensing, because we are less and less likely to purchase music in the years ahead. When Apple bought last December (and then shut it down this last May), the big buzz was that iTunes would move into subscription listening services. It is highly likely this is the model of the future. Think streaming music via your desktop or smartphone. Playlists will no longer be based on ownership but rather listening rights.

And it makes sense. While it took me a long time to give up buying tangible CDs (I amassed a collection of over 1500 from 1985 through 2008), it has taken me very little time to embrace the idea of simply renting my music. I’m evolving quickly. As long as I can summon a particular song at my beck and call, I’m good with that. I don’t need to own it. After all, what I really want to do is tap my feet and sing along.

While the other three labels continue to cry in their musical beer, I’m singing the praises of EMI for catching a glimpse of tomorrow. There’s no way I am going back to the old model of music consumption. I didn’t shed that tail for nothing.

Dr “Fit of the Survivalist” Gerlich