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IMARKETING REPORT 07.23.02:
Internet 101; Latinos; AOL; Privacy
>> "Tough times for accountants. Today, on the way to work, I saw
a guy standing next to a freeway on-ramp holding a sign that said 'Will make
two plus two equal five for food.'" - Steve Voldseth
Good morning execs,
Happy Birthday to us! One year publishing!! Woo Hoo!
CONTENTS:
1. BRANDS&INSIGHTS: Internet 101: Understanding Consumers
2. CONSUMERFOCUS: "The Online Landscape is More
Closely Mirroring the Offline Reality"
3. MEDIA&CONTENT: My Version on What Killed AOL
4. MGMT&OPS: Respect My Privacy!
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1. BRANDS&INSIGHTS: Internet 101: Understanding Consumers
With the fall and break up of AOLTW
and Vivendi (who knew?!), everything
is being questioned, especially the useful-
ness of the internet. What exactly is it?
What's it good for? AOL certainly does
sell lots of magazines subscriptions via
it's service (that's synergy?!) but let's
face it, AOL is only good for one thing:
to connect you to the rest of the internet
so you can interact with the world. The
internet is all about interacting with other
people, with the most significant impact
being how it has affected consumer use
of media, "'The move from passive to a
more active paradigm in consumer be-
havior is where the new media has had
the greatest impact," said Henry Jenkins,
director of comparative media studies at
the Massachusetts Institute of Technology'".
"Consumers who were once content to
sit back and absorb what was beamed
at them are demanding more control over
how and when they consume movies, tele-
vision, newspapers and music."
BOTTOM LINE: Rather than trying to
shove all kinds of content down your con-
sumers' throats, have you ever thought
about how they use the internet? "...many
guys approach the Internet as a source
of adventure, mischief and information."
"For girls, it's more about community,
gossip and shopping". By understanding
that 1) your consumers are no longer
passive about how they use media and
2) your consumer uses the internet to in-
teract with other consumers, and 3) your
consumer is now empowered to make
your content functional in their lives, you
will be able to 1) design an experience that
drives sales, 2) increase the size of your
audience 3) develop your brand to the
point where your consumers are fanati-
cally loyal.
READ MORE:
http://www.ecommercetimes.com/perl/story/18646.html
http://www.imediaconnection.com/content/news/071102d.asp
http://www.nytimes.com/2002/07/22/technology/22NET.html
http://www.savemartha.com
http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1221704
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2. CONSUMERFOCUS: "The Online Landscape is
More Closely Mirroring the Offline Reality"
One of the most covered bits of news
last week was the growing Latino pop
online released by a Nielsen//Netratings
study. Latinos are now up to 7.6 million,
a 13% increase, the greatest of any ethnic
group. But guess what? "Hispanic young
people [at least in L.A.] say [their] predo-
minant language of the sites they visit is
English." In fact, most ethnic populations
in the US are growing faster than the
general internet audience because they
aren't necessarily restricted from the lack
of content in their native language. It's
no longer the white, middle-income, male
online folks. But wait, it gets better:
"Overall, Hispanics buying power is ex-
pected to increase to $926.1 billion by 2007,
said Dr. Jeffrey Humphries, director of the
University of Georgias Selig Center for
Economic Growth."
BOTTOM LINE: "'With the online popula-
tions of ethnic Web surfers growing each
year, the online landscape is more closely
mirroring the offline reality,' says T.S. Kelly,
director and principal analyst, NetRatings.
'This growth reveals an untapped opportunity
for businesses to win over these population
groups.'" Not only does this present a valid
enough argument to use the web more in
your marketing communications efforts, it's
also a wake up call to those who think that
the internet audience is not yet the right size
for them to seriously invest in.
READ MORE:
http://www.emarketer.com/news/article.php?1001369&ref=ed
http://www.internetnews.com/IAR/article.php/10789_1408581
http://www.ecommercetimes.com/perl/story/18611.html
http://www.imediaconnection.com/content/news/071802c.asp
http://www.brandweek.com/brandweek/headlines/article_display.jsp?vnu_content_id=1546839
http://www.mediapost.com/dtls_dsp_news.cfm?newsId=160719
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3. MEDIA&CONTENT: My Version on What Killed AOL
I once thought AOL would rule the world.
They could have, if management simply
worked together. It never ceases to
amaze me how big egos and politics can
crumble any company, regardless of size.
AOL no longer cares about how their
consumer's media consumption habits have
changed, but only about making Wall Street
happy. So they're killing AOL because they
don't know how to execute synergy the
right way: "'It's a little bit like stockbrokers,"
Mr. [Jeff] Bell [VP/GM, Jeep, DaimlerChrysler]
said. "Do they really believe in what they're
selling you, or is it just the boss telling them
the house took a position and they have to
sell it?". You can't blame any company for
trying to oversell what they have. It's in
their best interest to sell you whatever you're
willing to take. However, when you're as
big as AOLTW, it's important to remember
that your media assets influence way too
many people for you to act like you're just
some car salesman (no offense to highly
skilled car salesman who at least look the
consumer in the eye): "The advertising [execs]
say they fret that [cross-platform, media]
packages benefit the seller more than the
buyer, that they are being pressed to buy
what they do not need to get what they do
and that they could strike better deals if they
negotiated separately with each network,
publication or Web site." And most absurd
of all, AOLTW divisions actually pursued
deals individually, behind the backs of the
synergy people, for fear of loosing good
deals that synergy people couldn't agree
on. And this dis-union just made things
worse, since there wasn't a single person
where the buck would stop.
BOTTOM LINE: Synergy works. Conver-
gence will happen. AOLTW isn't a great
example because it's too big and unwieldy.
Their assets, if sold individually, are still
valued at over $126 billion, regardless of
their stock price. So perhaps in a different
aggregation (all mags or all TV functioning
with a cross-platform mentality), the right
management can really make it all work.
Besides, in retrospect, the execs selling time
and the execs selling space still think way too
differently to come up with a truly creative
and effective package with their assets.
It'll take my grandkids to finally be able to
sell effective cross-platform deals, since
they're the ones that will grow up not dif-
ferentiating media as much as we all still
do. To them, the internet is TV is the ma-
gazine is the book.
READ MORE:
http://www.nytimes.com/2002/07/20/business/media/20ADS.html
David L. Smith, "Are Cross Media Deals Dead?", Monday, July 22, 2002,
OnlineSpin@Mediapost.com
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4. MGMT&OPS: Respect My Privacy!
Did you hear the one about how some
16 year old got a month's supply of Prozac
due to some messed up marketing effort
from Eli Lilly and Walgreens? He didn't
need it. It was just a mis-targeting by Lilly.
Fortunately, he didn't take it, but what if
Prozac reached other kids? What about
the Prozac user who received a supply,
but filed a suit against Lilly, her doctor, and
Walgreens for invasion of privacy? There's
so much to say about all this: Is selling con-
sumer data going too far? Does direct mar-
keting really work for health care? Does Eli
Lilly hire grade school kids to manage their
marketing efforts? Repeatedly, Lilly just
keeps messing around with their consumer's
data, previously having sent a bulk email with
all the emails of their Prozac patients listed
on the CC: line, rather than the BCC: line.
And in the face of this flagrant disregard for
consumer private data, the FCC "has cleared
the way for telephone companies to share
customer data with associates that hawk
communications services - without first
seeking customer consent."
BOTTOM LINE: It's always difficult to
develop a good customer loyalty program.
Everyone does it, and many are very
successful with it. However, why don't
marketers think of how they feel as
consumers? Why don't they remember
the feeling of disgust when they received
some sort of solicitation that really offended
them or caught them off guard? How
can they justify their own efforts, if they
aren't believers in this sort of marketing?
I'm not calling for an end to database
marketing. On the contrary, the more
data you have about your consumers,
the better. However, it's how you use
that data that makes all the difference.
Your consumer data should be treated
the same way you treat your money.
Don't just let anyone manage it. Don't
just allow any technology to manage it.
Don't just use it for any marketing effort.
Don't just assume that it's your data.
This data still belongs to your consumer
and the only reason you have it is b/c
you were given permission to have it.
I don't believe in buying data, I believe
in earning it for the same reasons we
all hate getting junk mail. Thank about
that.
READ MORE:
http://www.ecommercetimes.com/perl/story/18634.html
http://promomagazine.com/ar/marketing_prozac_sample_prompts/index.htm
http://www.boston.com/dailynews/200/economy/16_year_old_boy_received_unsol:.shtml
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