Week 6: Advertising, Promotion, and Public Relations in the Web World

Articles/Items Covered
- "Advertisers Face Hurdles on Social Networking Sites"
- "The Connection of Online Search and Advertising"

8 July

Executive Summary

            Pinterest is an online start-up that has experienced a meteoric rise with a very unique business canvas.  Due to operating as a social media and networking platform, Pinterest’s key resources, like most other internet companies, are creative human resources, knowledge-intensive human resources, and network platform functionality.    Currently, they serve a very distinct yet broad customer segment.  The term “internet savvy individuals” describes this elusive segment because it is a mixture of both women and men, women being the majority of users, young and old, and differing sociological backgrounds.  However, the common thread is being internet savvy.  The near future holds a new customer segment that is purely business entities.  Using both direct and indirect channels, Pinterest provides a vast array of value propositions to these segments with the most important being the convenience and ease of use and then the individualistic customization and consolidation of information.  Unlike Facebook and other social media platforms, Pinterest offers a very distinct and highly coveted value not only to the individual segment but to the up and coming business entity segment.  As it stands, Pinterest has no confirmed revenue streams, depending entirely on multiple rounds of independent funding.  However, the potential revenue streams stem from its unique value proposition.  Again, unlike Facebook, Pinterest is a collaboration of individuals wants and desires, not just an innate status.  When people utilize Pinterest, they are in the “buying mode” whereas on Facebook, people are there to socialize and not fully engaged with the buyer’s mentality.   Thus, “Pinterest is sending a signal to the multitude of brands and retailers that it's getting ready to open for business itself by unveiling accounts designated for marketers today” (adage.com).  Pinterest’s value proposition is a treasure trove for businesses and a potential lucrative revenue stream through transactions fees tagged to final purchases Pinterest facilitates, Pay-Per-Click fees from click through ads on Pinterest, and licensing fees that Pinterest charges companies to utilize their services.   As with revenues, there are no documented expenses associated with Pinterest.  But, simple extrapolation can be used to make predictions.  The two biggest expenditures with Pinterest are assumed to be R&D ($20,000,000) and the Amazon Web Service ($10,000,000).  Then, with 80+ employees with an assumed $100,000 salary, staff/administration costs are valued at $8,500,000.  Next are network maintenance costs of $5,640,000 ($470,000/month) and finally, property costs of $5,000,000.  This brings total yearly expenses for Pinterest to $49,140,000. 

Websites:

http://adage.com/article/digital/pinterest-launches-business-pages-cozy-brands/238295/

http://econsultancy.com/us/blog/8796-revealing-the-demographics-behind-pinterest-s-users

http://www.forbes.com/sites/jjcolao/2013/05/08/why-is-pinterest-a-2-5-billion-company-an-early-investor-explains/

http://www.theregister.co.uk/2012/04/30/inside_pinterest_virtual_data_center/

http://gigaom.com/2012/12/02/pinterest-flipboard-and-yelp-tell-how-to-save-big-bucks-in-the-cloud/

http://highscalability.com/blog/2012/11/1/cost-analysis-tripadvisor-and-pinterest-costs-on-the-aws-clo.html

http://mashable.com/2013/05/20/pinterest-brands-upgrade/

http://www.law360.com/articles/417331/pinterest-s-value-surges-to-2-5b-with-new-funding-bump

https://pinterest.com/

http://blogs.marketwatch.com/thetell/2013/05/29/pinterest-ceo-still-cautious-on-revenue-question/

http://llsocial.com/2012/02/pinterest-modifying-user-submitted-pins/ 

Week 5: Big Data and Marketing Research

Articles/Items Covered:

-"Advertisers Get a Trouve of Clues in Smartphone"

-"Big Data and You"

-"Demystifying Big Data"

-"The World's Most Valuable Brands, Who's Most Engaged?"

-“Numerati”

1 July

The article "Advertisers Get a Trouve of Clues in Smartphone" starts to put the pieces of the smartphone puzzle together.  Taking a line directly from the article, "advertisers will pay high rates for the ability to show, for example, ads for a nearby restaurant to someone leaving a Broadway show, especially when coupled with information about the gender, age, finances and interests of the consumer".  Now, this is a step in the direction of activity-based marketing where companies advertise not to specific demographic markets but continuously changing markets based on an individual’s current activities.  The next step in the process is to fully integrate an individual’s activities by creating an all-encompassing mobile platform that combines an individual’s interests (possibly integrating Facebook), current location, current time, and potential future schedule to create purely customized marketing micro strategies.  Based on the article's example, the mobile platform will recognize the exact location of the Broadway show and the current time.  Combining these two inputs with the individual’s interests and pre-programmed schedule for the night, the platform will market potential activities that are customized for that individual at that exact time.  Now, these marketing efforts can be simple advertisements or real-time deals/coupons/happy hours to entice the individual to utilize a companies/restaurants/bars services.  Overall, the objective of intergrating all these inputs into one central location is two-fold; provides the customer a real-time snap shot of potential activities with associated discounts and then provides the company with access to time segmented marketing options and real-time, activity-based marketing segments.      

2 July

Adding to my previous entry, the article “Numerati” divulges more details and insight into the possibilities of an all-encompassing mobile platform that allows companies to customize their marketing strategy to a single individual.  The sheer quantity and vastness of data that is available is overwhelming at the least, but ripe for marketers to chip away at potential gold mines.  One interesting point that the article alludes to is the idea of ‘behavioral marketing’ where mood-associated actions such as listening to a sad song trigger certain marketing strategies and advertisements.  This correlates very closely to my ‘activity-based marketing’ idea proposed in my previous post.  Both marketing ideas are advancements due in part to the vast, real-time data sources now available.  Overall, the long-term trend in marketing is big data and those who are able to sift through the endless numbers will be the successful ones.  

5 July
Marketing Canvas Assignment

Executive Summary

Barclays is a major global financial services provider engaged in multiple key activities such as personal banking, credit cards, corporate and investment banking and wealth and investment management with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs 140,000 people.[1]  Barclays has engaged in numerous strategic alliances, strategic partnerships, and joint venture to successfully move, lend, invest and protect money for customers and clients worldwide.  They service a wide range of customer segments through owned direct channels, owned indirect channels, and partner indirect channels by establishing personal assistance, dedicated personal assistance, and automated customer relations.  Using key strategic resources, Barclays is able to provide vital value propositions to include newness, performance, customization, brand/status, risk reduction, accessibility, and convenience with its all-encompassing financial product offerings which make the company has a whole one of the leading world-wide financial institutions.  Turning to the financial status of the company, Barclay’s cost structure is comprised of operating expenses, property lease expenses, equipment lease expenses, administration and general expenses, and compensation expenses which equates to 20,989 billion British Pounds.  Furthermore, the revenue stream for Barclays include interest income, fee and commission income, net trading income, net investment income, insurance contract premium income, and operating income which equates to 25,291 billion British Pounds.  Overall, as a value driven firm, Barclays effectively combines key partners, activities, and resources to provide value intensive products to a large customer segment via differing channels.         

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[1] Group.Barclays.com. 2013. Accessed 5 July 2013.  

Week 4: Business Models and the New Era of Competition

Articles/Material Covered:

-"Business Models on the Web”

- Warby Parker

- Dollar Shave Club

- Bonobos

- More on Warby

- The Mobile Internet is Changing Brick and Mortar Retail

- "The Economics of Giving it Away"

- Business Models of New Websites

- A Taxonomy of Internet Commerce 

24 June

After reading the articles "The Economics of Giving it away" and "A Taxonomy of Internet Commerce", the common theme that I took away was the idea that attention and reputation are the currencies of the internet, not actual money.  One line that I found especially enlightening from the "A Taxonomy of Internet Commerce" article was  "much of value is created and exchanged on the Internet but that the interactions involved are not financial but may involve the accumulation of 'reputation capital' ". To that, I would have to agree and also disagree.  I see financial capital and reputation capital as interdependent rather than different entities.  From the same article, the native economy of the internet is not based on scarcity but on abundance.  I understand that statement to mean that abundance is driving the internet economy; more informational websites, more clothing retailers, more social networking sites, etc is what produces value, not scarcity.  With that point, I want to focus on a specific sector to clearly highlight my overall point.  There are a vast number of baseball retail websites on the internet; again, abundance is the driving force, not scarcity.  Therefore, there is fierce competition between these baseball retailers and an individual firm fights for a competitive advantage.  This is where the reputation capital comes into play.  In order for consumers to purchase products from one baseball retailer over another, they must be reputable.  A retailer will try to enhance their reputation capital through blogging and social media outlets.  At this point, there are no financial transactions, but reputation accumulation like mentioned before.  But, the end goal of reputation accumulation is to produce a financial transaction.  That is why I view reputation accumulation and financial transactions as linked rather than separate entities.  

30 June  
Looking at the differing business models that are being created within the virtual world, there are many that have potential to be successful with others that don't make much sense.  I want to focus in on one company whose business model seems counter-intuitive.  Bonobos is a menswear company that has brick and mortar locations that are essentially fitting rooms where individuals cannot purchase clothes directly from the store.  After trying on clothes, the customer must order the clothes from the website and have their products shipped to their house.  To me, this model does not seem very beneficial.  When buying casual clothing such as shirts and pants, I usually go to a store and try on the items and then purchase them right there.  I want to take as little time possible with as much convenience when buying clothes.  The Bonobos model seems like it adds more inconvenience than benefits; after trying on clothes the individual has to then go online to purchase the item and then have to wait for the clothes to be delivered.  However, the Bonobos model I think would be successful if it was implemented for formal menswear such as suits and tuxes.  Having a brick and mortar location to try on suits and get personally fitted for the suit and then that order is placed online and delivered to the individual.  This system would add convenience to the customer by having a place to physically see and touch the suit and then the item would be delivered to the customer, saving them a trip back to the store to pick up there purchase.  Currently, the company online company Indochino provides this service without the brick and mortar location.  One goes onto their website, browses through the selection and inputs all of their measurements.  Then, after purchase, the custom fitted suit is shipped to the customer's house.  Not having the opportunity to see and feel the suit is one hurdle that Indochino must overcome and could potentially look into the benefits of having a brick and mortar store.  

Week 3: Microsegmentation and Social Media

Articles/Material Covered:
-"The Death of Segmentation"
-Seth Gordin: Ted Talk on: How to Get Your Ideas Spread 
-"The Seven Segment Systems of Online Marketing"
-"The Razorfish Social Influence Marketing Report"

18 June 
I could not agree more with Ginni Rometty in her view that understanding and controlling big data will ultimately become a competitive advantage.  She clearly articulates that big data will make segmentation obsolete, forcing companies to understand customers as individuals rather than subsections.  Looking at the current digital marketing landscape, the paradigm shift seems to already be in motion.  Companies are in the infancy of sorting big data into usable marketing information.  For example, when you buy a product online, the next week or even day, the banner ads display products that were similar to your previous purchase.  Furthermore, I want to say it was Target that started tracking every purchase a person bought using some sort of loyalty card and then would email coupons for the customers most frequently bought products.  The question is, how in-depth will companies go to capture the competitive advantage of big data? Again, we have already seen the first steps with "intrusive marketing" but what will it look like in 1 year, 5 years, 20 years?    

22 June
When completing the Twitter assignment, I was struck with a very thoughtful insight (thoughtful to me atleast) that would be better documented in the journal than the paper.  I chose Dos Equis as my company to follow for 5 days which was entertaining as well as thought provoking.  They continued with the "Most Interesting Man in the World" marketing theme throughout the observed time period.  However, the timing of these tweets and the different types of tweets utilized was fascinating.  I realized that Twitter has allowed companies to change their target audience in terms of advertising in mere seconds.  By adjusting when and what a company tweets, they can reach out to a selected audience instantaneously.  Furthermore, Twitter has lengthened the marketing segmentation hierarchy by introducing microsegmentation based on the day of the week and even the time of the day.  For example, Dos Equis posts a short "drinking encouragement" tweet at 4:40 on Wednesday, which is not considered a "drinking night".  This time is right after work and targets those individuals who are on the fence of whether or not to go have a drink with friends.  Overall, Twitter is not just a social media convenience but a powerful marketing tool that increases product awareness and advertising through microsegmented markets that can be instantaneously adjusted based on multiple variables.

Week 2: Empowering the Customer

Articles:
-"How to build your startup without learning code"
- "Introduction: The Dawn of the Human Network"
-"Why the Groundswell and Why Now?"
-"Web Video; the New, New Thing"


10 June
The article "How to build your startup without learning code" is one of the most relevant articles I have read to date.  A friend and myself have had a lingering idea for a website business that we are both very passionate about that offers a unique service which is not currently offered. However, both of us are computer illiterate when it comes to writing code and producing websites.  Therefore, our idea has been just that, an idea.  This article has provided a road map on how to take steps in the right direction and get our idea out of hibernation.  First, the idea of creating a powerpoint that mocks the website as we see it is a brilliant idea.  Then, the article offers multiple companies who specialize in helping startups getoff the ground, which has been a major hurdle for us.  Overall, I chose to take this class to gain knowledge and hopefully educate myself in the area of digital marketing to one day make our idea a reality.  This article does just that.

15 June
The key insight I gleaned from the article "Why the Groundswell and Why Now?" is the true effect that the internet audience has in terms of marketing power and overall influence.  The vast reach of information to internet users and inter connectivity between users in a short amount of time corresponds to substantial power and influence for the internet users.  As the article points out, companies can either resist this fundamental change or learn to accept and even thrive in this environment.  But, either way the groundswell shift is already upon us and is here to stay.  For companies that embrace this shift, there are numerous advantageous opportunities at hand.  The most lucrative that comes to mind is advertising revenue.  A company tracks all data including the number of people who log onto a website, where they click, and even personnel preferences with certain products.  Having exact numbers and preferences provides a sold platform for advertisements.    For example, a peer that I graduated with started a  movie trailer website.  The idea is to allow people to watch all types of new and old movie trailers with a ranking system; the more trailers you watch the more points you accumulate which can then be traded for movie tickets, etc.  Data would be collected on the number of people who logged in and at what times.  Then, my peer would offer double points or triple points for watching a specific trailer at a specific time.  This works on two different levels; the company producing the movie knows that if they pay to have their trailer on the website at a certain time, they will have X number of people watching it.  Then, for other companies that want to advertise, they know at exactly this time, they will have target audience of X number of people.  Overall, the fundamental change with the Groundswell has altered marketing by shifting the power from the corporation to the internet users.

16 June
A somewhat continuation of the last post, the article "Web Video; the New, New Thing" presents the ideas of webvideos and how advertising has had a major influence on its development.  Again, the central idea around this article is increasing viewer volume; the more people who view a certain video or site, the more leveraging power with advertisers.  There is one point in the article, though, that intrigued me.  The idea that the person who develops a TiVo like function that can fast forward and skip ads.  It is a very interesting idea, one that is over my head in terms of technical know-how.  However, the website Hulu has devised innovative ways to include advertisements in there videos.  The first development was allowing the viewer to chose which advertisement to watch.  There would be 3 possible ads which makes the viewer take ownership of the ad and makes them more receptive to the ad itself.  Even though no one wants to watch ads, the power of choice for the viewer makes the experience a little more bearable.  The second development by Hulu was the timing of the ads.  Again, Hulu gives the viewer the option of watching all 3 ads before the video starts thus no interruptions during the video or they can watch the 3 ads independently  during the video.  Both these developments focus on giving the viewer a choice in advertisements; something that is new and, in my opinion, very beneficial.  The end goal of advertisements is marketing a product to a wide audience.  Therefore, giving the viewer the option of what ads to watch and when still meets that end goal but gives the viewer a sense of control and ownership over their viewing experience.

Week 1: How the Web Has Changed Marketing Strategy

Materials Covered:
-"Does the internet make you dumber?"
-"Does the internet make you smarter?"

9 June:
This week was difficult to get set-up and start getting ready for the summer semester due to the Kelley Connect week at the beginning of June.  However, there was some interesting marketing points that I took away from Kelley Connect.  The case study that was utilized during the week was drawn from a real-world company called UAP Insurance who conducted business in Kenya.  They sold crop insurance to small, impoverished farmers to ensure that farmers would not go empty handed in drought times.  The main point during the case was developing a marketing plan utilizing celluar technology.  Even though Kenya is less developed in terms of technology as compared to the rest of the civilized world, it shows that technology is revolutionizing marketing.

In regards to the articles, I was really interested in the debate over the internet and its effects on human intelligence.  I can relate to both articles and see each respective article.  However, I would side with the theory that the internet has made individuals more intelligent rather than dumber.  The vast amount of information available makes people more informed and more likely to seek out information.  Looking back to  early education, all required information was gathered via books, journals, etc.  The amount of time required to gather the minimum amount of information needed to properly write reports was astonishing.  The bulk of a project was dedicated to research and information gathering.  Now, people are able to search multiple research outlets and gather vast amounts of information and data with relative ease.  The consolidation of information on the internet has added more value and ultimately has helped produce better products.

Conversely, the main point in the argument that the internet makes people dumber is very valid.  With the increase of information and activities associated with the internet, people are having to multi-task like never before.  However, there is a fine line between multi-tasking and being distracted.  Personally, this point is driven home at work and on-line school.  There is so much work that needs to be done and I try to accomplish as much as possible while being as efficient as possible.  I start one task at work which leads into  another tasks which leads into another tasks.  As a result, while trying to complete one task, I find myself now working on another more important task.  Furthermore, while working on school work, I find myself researching for a class, find some good information about another class I am taking, start working on the other class and then revert back to the other class.  Basically, the point trying to be made is that with so much information and differing tasks, the internet allows people to not properly multi-task and drift between tasks.