Ignacio "Nacho" Roizman's thoughts on digital marketing, particularly on the US Hispanic and Latin American markets. From the personal perspective of a passionate technology evangelist and marketing addict.

Wednesday, October 04, 2006

In defense of TV

Something hard to imagine 10 years ago happened last week in one of the keynote speaking panels at Mixx 2006, a Senior Executive from a broadcast TV network justifying why it was still important to advertise on TV. Not long ago, on last year’s OMMA conference during advertising week 2005, Peter Widfald from Samsung presented to the audience how its company was significantly cutting budget from TV to move it to online since 2002. Apparently, based on Jeff Zucker's , CEO of NBC Universal, speach at MIXX, the TV Industry moved from a denial mode to a defensive one in 2006, showcasing their initiatives to justify the statement of “Look we can do digital as well!”.

This should not be a surprise as most of the networks introduced during their upfronts this year their digital delivery platform, integrating in most cases the availability of content for mobile devices, content for sale on itunes or other similar services as well as playing it young and cool on YouTube and Myspace.

Telemundo is one of the US Hispanic networks to bet heavily by associating with Yahoo! en espanol to compete with Univision platform which has been online since the last internet hype. However we are still waiting to see a true integration and synergy of both channels by networks in the US Hispanic other than just publishing information about their TV programs or news.

One thing is certain; TV will not die but will have to successfully overcome the challenge of adapting and adopting the new digital platform by creating new ways to leverage the coexistence of two small screens during primetime.

Friday, August 25, 2006

Why should I hire an Interactive Agency if I already have a full service one?

I’m repeatedly asked this question by marketers. Moreover, I recently had the need to help building the case internally for one of the contacts I met with at a leading global player. I was surprised I was not able to find supporting articles online, as my initial idea was to provide third party justification. Therefore I decided to go ahead and give it more thought and write about it here.

This topic is somewhat related to the post “Half the money I spend on advertising is wasted” as well as “Online, for the offline’s sake” one. Over and over again, brands conduct agency reviews, including everything in a single package. This is particularly true in the US Hispanic Market, where the inception of dedicated Latino marketing departments is relatively recent and their budget is considerably tight. They are building their case internally, to growth their capacities and resources.

As I tried to identify myself the reasons why this is so common, the fact that marketers might feel more comfortable with traditional agencies, as that is a ground they are familiar with and been experiencing for years, came to my mind. On the other hand the prospect of working with a single vendor might contribute to think this is the best way to go.

However there area several logical and not so evident reasons why brands should relay in traditional and digital agencies:

Specialization: this is they main reason among all. The nature of the digital media requires significantly different skillset. Technology might arise as the first one, but the characteristics of the media it self cry for a different approach. Interactivity is the key component that is not present on the offline media. The tracking capabilities, the message customization, campaign targeting and dynamic content are other concepts that the traditional media lack of or are particularly difficult to implement, without entering into the cost arena.

Business Relevancy. Online budgets are usually 5% of the offline ones, therefore a traditional agency winning a particular brand’s advertisement business will mostly, and usually do, focus on the offline side of the account, leaving online to play a secondary role, as collateral to all the offline activities and not as one of the key components.

Resources. Most of the traditional agencies end up outsourcing the production of online materials to small shops or freelance developers/designers. So what is the point in awarding this slice of the business to them anyway?

Innovation. Traditional agencies tend to follow the market on the implementation of digital strategies and not the other way around. Most of the offline agencies’ work on the digital media tends to be isolated from other actions, limited to very nicely designed minisites, a banner campaign and email blasts.

Customer segmentation. And this point applies particularly to the US Hispanic Market & Latin America market. Consumers that have internet access are usually more qualified as consumers than those who do not. The demographics of online users have a tendency to be more educated and with higher income levels. Other audiences that are remarkably more knowledgeable on the online are the younger audiences, that becoming less and less receptive to traditional advertising methods.

I could keep citing more reasons why separating the online and offline advertisement accounts is as important as the selection itself fo the most appropriate agency. One of the additional reasons could be the consumer generated content trend along with viral marketing, that are centered on the web 2.0 but that deserves a completely separated discussion.

Let me get this straight, I’m not against traditional agencies or media, my position is that both, offline and online, should play a relevant role and that there should be a high level of interaction between the two of them on a particular account, to make of this a successful model.

Summarizing, on my personal experience, those accounts we work with, that previously had only a full service traditional agency, were in an earlier stage of adoption of digital media, lacked the required knowledge to implement comprehensive relationship marketing programs or even integrated campaign and tracking of call to actions. Moreover, the level of accountability of the dollars spend is usually lower on the offline side of the business, where metrics are not based on a one to one measurement and mostly related to statistical estimations. Making it harder for marketers to build the case for more budget and resources.

Marketers thinking on putting their account in review, should consider separating the offline and the online business, creating a competitive environment where creativity will keep flowing and the comfort zone for neither of those agencies will be reached.

Thursday, August 17, 2006

Online, for offline's sakes

Most of the time we are approach by a client, they are thinking in running just an online campaign. Most of the time they think of online as an isolated resource. There are few companies exploring the power of multichannel marketing, which basically means driving audiences from offline (print, TV, radio, points of sales, outdoors and others) to the digital media, and back again to offline.

Why should a marketer think on more comprehensive multichannel campaigns? Simply, it's individuals that are being exposed to the message in a variety of contexts and formats. Some channels with a more immediate call to action, others with a more mindshare objective.

The online can perfectly fill the gap between offline channels, providing marketers with the ideal tool to track conversions and acquiring customer information to then be used on more targeted digital communications (making then more efficient, measurable and adjustable than traditional media).

Let me put it in more simple words. Recently at e-volution we develop a set of campaigns for Disney in Latin America where TV audience was encourage to show off how much they knew about specific characters on primetime series. The result: Disney was able to register TV viewers on their email database, to target them in future online actions, but also to trigger desired offline behavior, like for example notifying them of in-store offers of new DVD releases. Even more interesting, rewarding those loyal consumers that provided you with the information with a pre sale event at specific retail (let’s say, the most loyal retail partners). This campaigns measure which days of the week people were watching more the programs involved as the questions and activities related directly to the episode air on a specific date.

Online brings new ways to measure the level of commitment of a brand’s audiences, not only on the consumer side but also on their distribution channel or even among vendors. Allowing the brand to act accordingly and reward them, as in the example set above. Why bother delivering an offer driving traffic to a retail store that you know would not have enough products on the shelf? There are alternatives to the traditional earn points to get this great plasma TV programs. Channel programs that reward business owners with coop marketing activities are a great incentive that also reinforce the sales cycle.

On the other hand, by acquiring customer information, particularly media companies can discover new audiences that are part of their viewership. For example with A&E Television, one of e-volution’s clients in Latin America, we discover a younger audience, more technologically savvy based on the responses to on air promotions driving users to participate in online contests.

I summary, when most of the marketers think of an online campaign, composed by a nice banner on a highly well known site linked to a registration form for a drawing, they are missing an infinite number of opportunities that could be seized on every touch point of the campaign.

Friday, August 11, 2006

Email disaster recovery or a better planning process?

I periodically read MediaPost’s columns as they are one of the most reliable sources of information on trends in interactive marketing, particularly those dedicated to email and online advertisement. Last Thursday an article on email titled When a good e-mail goes bad, by Jeanniey Mullen from Ogilvy World Wide in New York, caught my attention. Can really a good email go bad? Or is it that it was good only to the eyes of those involved in the creation process?

At any given time, advertising agency as well as advertisers might make decisions based on personal perceptions or myths. Customer insight is frequently scarce and as humans we tend to create our own personal “personas” that might not necessarily fit the profile of those who will be actually receiving our message or eventually that “persona” might not react as we expected during the creative process. Therefore the need to balance the creative process with methodological procedures that provide the means to test, measure and adjust the final message that is going to be delivered.

As I discussed in my last post on the article published on The Economist, The Ultimate Marketing Machine, the most significant advantage of the digital media is the ability of marketers to track and act upon numbers, not words. This has been said over and over again since the inception of digital marketing practices on the mid 90s. However, few are the companies that have undergone the cultural change that requires the adoption of the digital media. Sending emails to a database religiously on time and without any spelling of grammar mistake, is not enough. Consumers change, they sometimes outgrow the brand promise, they get married, divorced, die or just change tastes. What worked before does not necessarily will work now.

Establishing a role inside the marketing team focused on deploying an effective testing, not for only email pieces, but also for all forms of digital and even offline communications, including Call to Actions, layouts, design, would help avoid thinking on how to fix that good email that unexpectedly went wrong.

Thursday, July 27, 2006

Half the money I spend on advertising is wasted, because you want to...

"Half the money I spend on advertising is wasted. The trouble is I don't know why" is one of the most infamous phrase of advertisment, the worst part: it used to be true. John Wanamaker, considered one of the fathers or department stores and advertisement, said this more than a century ago and it remaind true, with little option for marketers to get away from this

Recently the magazine The Economist published an article that should be read by all marketers, but specially by those targeting specific niche markets or diverse audiences. Titled The Ultimate Marketing Machine, this article describes how thanks to internet marketing, advertisment is becoming less wastefull and its value more measurable, but only if the marketers are willing to face reality and directly connect their advertisment investment decisions with the bottom line.

I've spent half of my career on the agency side, and more often I find my self thinking if people responsible for the marketing budgets on the brand's side do really want to measure the sales funnel, from the first touch points with the consumers till the sales are closed. If marketers are ready and willing for make a significnat cultural change.

Plenty are the articles, like the one I mentioned on The Economist, that have been presenting the benefits of online advertisment. However, few are the marketers that change the way that things have been done in the organizations they are part of. Or is it that adopting these new marketing tools will finally make the marketing department directly responsible for the budget allocations they made?

From our digital marketing agency we are continously faced with the challenge to convince prospects and clients alike to give us the chance to connect sales with the online campaigns we develop. To leave behind traffic variables and focus on the ROI of the campaign. To put it in more concrete terms. Would you rather have a campaign that reaches out to 200,000 consumers and generates 100 leads? Or would you rather have a campaign that reaches out to 40,000 but generates 2200 leads? Put like that, the answer seems pretty obvious.

Unfortunately, marketers are culturally atracted to show big numbers on powerpoint presentations, showing that they reached a high volume of consumers. The sales? Are the distribution channel or sales team responsibility.

Internet advertisment should be approach differently to traditional media. Other common mistake we commonly see on the account we take as new clients, is planning their online campaigns on the homepages of high traffic sites. However, when it comes to online advertisment, you are buying ,at the worst case scenario, CPMs and not the total reach of a particular site. Thus some more segmented, less known, more affordable options are left aside. Portal's branding has become a great way for these internet giants to become the preferred media placement for most brand marketers. They would not buy on second or third tier sites, they want to be on the home page of yahoo, msn, aol, terra or whatever other site they consider the leader.

This is, in a way, the same old story in a different format. If you'd ask me what my biggest challenge as a digital marketing agency is, I would say educating my prospects and client base. comepting not only against other interactive agencies, but also to each of these marketers beliefs and customs. I turned from a technology evangelist to an online marketing evangelist, beyond the technology itself, and more focused on how to take the best out of it, even if it's not the latest, edgier, innovative platform.

Internet Advertisement brings to the table lots of advantages, among them: measurability, agility, segmentation capabilities, direct response to call to actions and virality..measurable virality. But all these benefits bring us closer to my question. Do you really want to know if that nice looking ad, actually sold any product, or at least paid for the campaign and production costs?

This is a very important issue, particularly on market segments as the US Hispanic, where the internet penetration is already over 50% while online investment and the need to segment messages is particularly high. Enough has been said about the need to reach Hispanics who are primarly Spanish speaking, the bilingual and the primarly English speaking ones. The mexicans, centro americans, caribeans and south americans. The west coast one versus South Floridians, versus New Yorkers. However, few are the companies targeting them with segmented messages online, less are those with established online relationship programs, developing open commnications channels through which brands can reach consumers with highly tailored messages. An example, almost none of the most recent account in review for the US Hispanic market conducted an interactive agency bidding process, oftenly leaving the online as a small part of the whole budget.

The US Hispanic market is particularly new, or at least its significant gowth as a total share of advertisement budget is recent. In a growing market like this, building the case for more budget, for growing Hispanic market departmets is key, and the online advertisement could be the tool that marketers targeting this segment could not leave aside.

Monday, July 24, 2006

Microsoft Office 2007 Beta 2 launch in Latin America

Software Beta versions are a day to day thing for most IT profesionals and developers. It's a way to participate in the development, compatibility and usability testing of mainstream applications before they are release to market, while at the same time it provides them with the opportunity to evaluate the benefits of the upgrade to the upcoming version.

However when Microsoft asked us to target Information Workers to invite them to participate in the launch of the 2007 version of Microsoft Microsoft Office System, a completly different challenge was put in front of us.

Information workers are professionals who need to manage information, ideas, creating reports analyse data, communicate and collaborate with each other, mostly through electronic media. Although they use a computer in order to achieve this tasks but they are not technology experts. Therefore exposing their computer, their main tool to perform their work, to potentially unstable, unfinished products is a negative user experience waiting to happen. Additionally most Beta versions come with a built in time bomb that deactivates the product once a certain date is reached.

Therefore, the approach had to be different, instead of delivering massive quantities of CDs pushing long downloands and encouraging Information Workers to install the Beta 2 on their own.

e-volution developed an innovative approach to provide assitance and guide the IW evaluation of the new version of Microsoft Office System, limiting the risk associated with installing an application not yet signed for release while at the same time giving the IW the opportunity to experience it at the full extend, with content carefully selected to target their specific business needs. No feature by feature description. Activities are centered around business scenarios.

The 2007 Microsoft Office Challenge, running regionally in Latin America both in Portuguese and Spanish since mid July 2006, enhances the overall user experience by creating the ideal context to introduce the benefits of thenew version of Microsoft Office System, exposing online resources available to extend the product functionality while measuring the level of understanding of participats and identifying potential qualified leads.

The integration of video plays a key role in this project as users are guided by Dr. Primus. this character is a business consultant with the key to "become the first" in a diversity of scenarios, following the approach that lots of management gurues seem to simplified in n steps to sucess the most complex challenges of people's careers. However, most of Dr. Primus'key steps are related top new functionality or existing untapped features of Microsoft Office System.

The contest is set up in phases that will be released on specific dates in order to manage the flow and level of participation of the Information Workers and will provide Microsoft not only with a chance to communicate and expose the new version of Office System but also better understand what do Information Workers value and their preception of this acclaimed set of applications, servers and services.

This contest is based on e-volution's propietary SmartProm technology, proven throughout a diversity of markets and audiences that allow marketers to develop top notch campaigns in record time to market, while acquiring valuable information regarding consumer's perception and beliefs towards a particular brand.

Sunday, June 11, 2006

Social Networks: How can a brand benefit from them?

Myspace, friendster, linkedin, facebook, youtube and many other online communities are getting more and more lines in the press and words such as social networks, viral marketing and word of mouth are becoming buzz words in most of agencies pitches.

Although social networks are not new, since they existed practically from the time animals started to swim in the oceans, the fact they now exist online, simply makes them obvious, explicit and tangible. Today we do not only know they exist, but we can identify the different components of those networks, measure them and eventually learn how to benefit from them or manipulate them.

First we need to understand are the elements that are an essential part of social networks, which are they key components that we, as marketers, can rest on effectively use them as alternative communication channels to traditional media.

Basically social networks are groups of individuals sharing a common interest or background. Individuals can belong to an infinite number of social networks. Relationships are the key enablers of these entities. Relationships can be thought of as bridges or connections between individuals. Individuals inside a social network have a develop a sense of belonging, they feel identified with other members of that community.

Relationships imply communication, and communication implies the existence of a sender, a message and a receiver. Therefore if marketers are able to create messages relevant enough to break the friction point on which they would be accepted and communicated throughout the network, they would have found and effective, economic alternative to traditional media.

However networks are based on the trust members have on each other, and trusts has to be earned over time, thus traditional structured one-shot pushy sales pitches or “We Care” corporate messages are not the most appropriate way to target this new form of consumer generated media channels.

Additionally not all members of social network have the same level of relevance, as all social structures, there are hierarchies. There are community leaders, or at least, as the new networks sciences call them: hubs. The interrelations of hubs create bridges among more individuals than just those two or more hubs. Social Networks tend to group in segments build up of smaller segments, tied up together by those hubs. Therefore the importance of this particular individuals.

Hubs differentiate from other members of the community because of their significantly higher amount of connections, meaning that, a higher level of interpersonal relationships. Other words that could better describe hubs from a marketing perspective are Influencers, Trend Setters or even Referents.

Those companies looking to tap the power of social networks should begin by developing a deep understanding of the dynamics and structure of the segments that build their audience and how they interrelate with each other, to eventually identify those hubs inside the network that would spread the word from a more reliable, trusted and respected position than directly from the marketer. Thus the importance for marketers to conduct an early discovery of those hubs and the deployment of a relationship marketing program that recognizes their distinct role in the community and sets off the ground for virality.

More on this subject can be found on the book Linked, by where the evolution in the understanding of networks, from the study of social networks, the spread of viruses (both biological and digital), to the growth of the internet; is describe in a plain language, for those of us who are new to the relatively recent Network Sciences.