When speaking of the lack of privacy on the internet, some people sound like it is 1984 and they are living Orwell’s nightmare with a twist; it is no longer a cruel totalitarian government that monitors your behavior to impose its oppressive policies, but the greedy capitalist companies that invade your privacy in order to sell you their products.
Is this so bad? After all, they just want to identify your preferences so that you are exposed to more effective targeted advertisements (a.k.a. ads that you may be interested in). It would seem like a win-win scenario where golfers receive promotions of the weekly green-fee discounts and skydivers are prompted about the latest extreme sports destination.
Nevertheless, what if I don’t want to be tracked anymore? Earlier this month, the Federal Trade Commission issued some recommendations to policymakers in order to protect those who would rather keep advertisers away from tracking their online activity. The way I see it, if people don’t want to be monitored anymore is because advertisers are not being effective enough in displaying the ads that the web surfer is really interested in.
Therefore, it would seem like FTC’s suggestion of creating Do-Not-Track mechanisms is actually giving companies a hand, after all the government agency is relieving marketers from the burden of asking each and every Internaut about his or her preferences as a consumer, hence enabling more efficient targeted online marketing. I guess we all (consumers and marketers) have to thank the FTC this time!
domingo, 12 de diciembre de 2010
domingo, 5 de diciembre de 2010
Local e-commerce: It’s hot!
When three of the biggest dotcoms make a move on local e-commerce in the same week, one can’t help wondering that there is more to it than just coincidence.
On Thursday, eBay issued a press release announcing the acquisition of Milo.com, an online shopping engine focused on the provision of real time information on prices and inventories of products offered in local stores.
One day later, Amazon confirmed the investment of $175 million in LivingSocial.com; which started as a website where people could post comments on their favorite books, coffee shops or restaurants and then became quite a profitable company when it decided to follow Groupon’s business model of offering discounts for products and services provided by local businesses.
Finally, after a week of mysterious news articles written with the help of “undisclosed sources” that sounded more like hallway talk than serious journalism, on Saturday Bloomberg confirmed Google’s failed attempt to acquire Groupon for over $6 billion. On April, Groupon was valued in $1.3 billion when private investors such as Facebook financier Accel Partners devoted over $170 million. Eight months later it’s turning down $6 billion buyout offers! Could it really be worth that much?
Only time will tell if Gropuon’s decision to turn down the search engine was the right one, especially considering that LivingSocial, its closest competitor, has now established a synergy with Amazon in order to fuel its ambition to conquer once and for all the local e-commerce market. In the words of LivingSocial co-founder and chief executive officer Tim O'Shaughnessy "To be the biggest player in the local commerce space there is no one better to work with than Amazon."
So, why the sudden interest in local e-commerce? Here are some numbers that certainly answer the question without need of further explanation:
-Maybe because “channel shopping” sales , which stands for researching online for products that are bought offline, will be $1.3 trillion and account for nearly 50% of total retail sales by 2013.
-The $133 billion U.S. local-ad market might have something to do with it.
Groupon’s 35 million users and LivingSocial´s over 10 million must find local e-commerce sites useful.
-Technology developed by Milo will allow eBay to provide consumers with access to millions of products from approximately 50,000 stores across the country.
-LivingSocial estimates to reach the half a billion mark in revenues next year, while Groupon hopes to make that amount by December 31.
With the facts and figures cited herein, it is fair to say that local e-commerce might be the next big thing in the dotcom world.
On Thursday, eBay issued a press release announcing the acquisition of Milo.com, an online shopping engine focused on the provision of real time information on prices and inventories of products offered in local stores.
One day later, Amazon confirmed the investment of $175 million in LivingSocial.com; which started as a website where people could post comments on their favorite books, coffee shops or restaurants and then became quite a profitable company when it decided to follow Groupon’s business model of offering discounts for products and services provided by local businesses.
Finally, after a week of mysterious news articles written with the help of “undisclosed sources” that sounded more like hallway talk than serious journalism, on Saturday Bloomberg confirmed Google’s failed attempt to acquire Groupon for over $6 billion. On April, Groupon was valued in $1.3 billion when private investors such as Facebook financier Accel Partners devoted over $170 million. Eight months later it’s turning down $6 billion buyout offers! Could it really be worth that much?
Only time will tell if Gropuon’s decision to turn down the search engine was the right one, especially considering that LivingSocial, its closest competitor, has now established a synergy with Amazon in order to fuel its ambition to conquer once and for all the local e-commerce market. In the words of LivingSocial co-founder and chief executive officer Tim O'Shaughnessy "To be the biggest player in the local commerce space there is no one better to work with than Amazon."
So, why the sudden interest in local e-commerce? Here are some numbers that certainly answer the question without need of further explanation:
-Maybe because “channel shopping” sales , which stands for researching online for products that are bought offline, will be $1.3 trillion and account for nearly 50% of total retail sales by 2013.
-The $133 billion U.S. local-ad market might have something to do with it.
Groupon’s 35 million users and LivingSocial´s over 10 million must find local e-commerce sites useful.
-Technology developed by Milo will allow eBay to provide consumers with access to millions of products from approximately 50,000 stores across the country.
-LivingSocial estimates to reach the half a billion mark in revenues next year, while Groupon hopes to make that amount by December 31.
With the facts and figures cited herein, it is fair to say that local e-commerce might be the next big thing in the dotcom world.
jueves, 25 de noviembre de 2010
Online Social Media: The next marketing milestone.
Recent studies carried out by researchers of the Massachusetts Institute of Technology have drawn interesting conclusions about the potential supremacy of social networks over mass media, as the preferred means for companies to reach out to consumers in the near future. This assertion is founded on the fact that consumers are abandoning traditional mass media to spend more time surfing on social networks and the plausible loss of impact of direct advertising vis a vis indirect marketing.
Television may not be the ultimate medium for companies to communicate with consumers anymore; TV audience is fragmented because it has hundreds of specialized channels to choose from, which increases costs of massive advertisement and reduces general exposure to consumers. Moreover, television ratings are decreasing due to the broadened entertainment options, such as Internet or console gaming. Furthermore, the few viewers a network attracts to a TV program will most likely fast forward or simply change the channel to avoid seeing the advertisements.
On the other hand, nearly a quarter of the world’s population (around 1.4 billion people) uses internet regularly and social media has become the most popular activity on the Web, even more than search engines. Therefore, companies that rely heavily on marketing to sell their branded products or services have spotted Social Networks as a new attractive opportunity to promote their commodities. According to David Grasso, Nike's Chief Marketing Officer, “Facebook is the equivalent for us to what TV was for marketers back in the 1960s. It's an integral part of what we do now."
Enterprises that focus their efforts on innovating in order to position their brands in Social Networks could have outstanding results, because of the possibility to reach millions of consumers worldwide from a single source. For instance, Facebook has more than 500,000,000 members around the world, and about half of them check the site every day. In contrast, around 100,000,000 people watched the last Super Bowl; being the most watched TV program ever.
Another reason to believe that social networks will surpass traditional media as the means to communicate between companies and customers relies on the effectiveness of indirect advertising over direct marketing. The public has come to distrust direct advertising and information provided by sources that are interested on influencing certain conducts. Through social networks, users may be encouraged to indirectly and sometimes even unknowingly promote a product or service to other potential customers. Such is the case of commodities that consumers may publicly approve or recommend on social media through the “like” button or similar applications. These peer to peer marketing strategies may have better results than mass advertising, since a consumer is fond of having greater confidence on a product or service that is recommended by an acquaintance as opposed to a paid actor or sponsored athlete.
It must be noted that social networks do not replace other traditional media campaigns, at least not yet. Hence, companies should consider social media as an additional channel to reach their consumers not as a substitutive or exclusive one.
Television may not be the ultimate medium for companies to communicate with consumers anymore; TV audience is fragmented because it has hundreds of specialized channels to choose from, which increases costs of massive advertisement and reduces general exposure to consumers. Moreover, television ratings are decreasing due to the broadened entertainment options, such as Internet or console gaming. Furthermore, the few viewers a network attracts to a TV program will most likely fast forward or simply change the channel to avoid seeing the advertisements.
On the other hand, nearly a quarter of the world’s population (around 1.4 billion people) uses internet regularly and social media has become the most popular activity on the Web, even more than search engines. Therefore, companies that rely heavily on marketing to sell their branded products or services have spotted Social Networks as a new attractive opportunity to promote their commodities. According to David Grasso, Nike's Chief Marketing Officer, “Facebook is the equivalent for us to what TV was for marketers back in the 1960s. It's an integral part of what we do now."
Enterprises that focus their efforts on innovating in order to position their brands in Social Networks could have outstanding results, because of the possibility to reach millions of consumers worldwide from a single source. For instance, Facebook has more than 500,000,000 members around the world, and about half of them check the site every day. In contrast, around 100,000,000 people watched the last Super Bowl; being the most watched TV program ever.
Another reason to believe that social networks will surpass traditional media as the means to communicate between companies and customers relies on the effectiveness of indirect advertising over direct marketing. The public has come to distrust direct advertising and information provided by sources that are interested on influencing certain conducts. Through social networks, users may be encouraged to indirectly and sometimes even unknowingly promote a product or service to other potential customers. Such is the case of commodities that consumers may publicly approve or recommend on social media through the “like” button or similar applications. These peer to peer marketing strategies may have better results than mass advertising, since a consumer is fond of having greater confidence on a product or service that is recommended by an acquaintance as opposed to a paid actor or sponsored athlete.
It must be noted that social networks do not replace other traditional media campaigns, at least not yet. Hence, companies should consider social media as an additional channel to reach their consumers not as a substitutive or exclusive one.
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