Agora Media Group Innovation Blog

Yesterday I read an article on McKinsey Quarterly on a new way to measure Word-of-Mouth Marketing.
The Word-of-Mouth Equity as they call it is an interesting equation to further explore. Besides the quantification of Word-of-Mouth, the overall development and importancy pointed out by McKinsey is well explained.

There are Word-of-Mouth three forms marketers need to understand: Experiential, Consequential and Intentional Word-of-Mouth.
The Experiential is the true C2C marketing, whereas Consequential and Intentional Word-of-Mouth is a B2C2C marketing, where Word-of-Mouth is being orchestrated and promoted by the company in order to trigger their target group(s) for further viral the C2C distribution.

The Experiential Word-of-Mouth is the most powerful and trusted form, because it’s a direct experience of the product/service by the person, which then is being positively or negatively recommended. If it’s positive or negative depends on the gap between the expectation and experience of the product or service.
Here the thorough understanding must be present that Experiential Word-of-Mouth is forcing a paradigm shift in brand experience, it is what your target audience think your brand is, instead of a push perceivement.

The shift from a produced influence -solely- created by the company to a prosumerist or co-creational or even customer-driven influence can be seen clear in the image below:

A couple of points stand out in the image:

* In a developing market, Word-of-Mouth is the most powerful influencer in the customer decision journey. This has the advantage that the innovators and early adopters do act as evangelists, which trigger their peers to show similar behavior. The second advantage is that Word-of-Mouth is relatively cheaper than advertising tactics, being able to achieve a better margin or lower overall costs in the introduction phases.
Extensive information is not yet available, forcing consumers to rely faster on each other.
* In the mature market, Word-of-Mouth is less influential, this has part to do with the transforming market, also because advertising in mature markets and later phases in product life cycles require lots of advertising and other still “conventional” tactics to be able to compete in the mature market. It could be well that proportionally there were much more advertising touch points with the target audiences than the consumers amongst them, creating a lower percentage which blur results.

The second image below is the equation by McKinsey which shows an interesting perspective which can be applied to understand better how Word-of-Mouth impacts the brand and the causes, be it on any kind of device or channel, which I will elaborate later on.

Because media convergence is rigidly diffusing amongst (mobile) devices, companies need to overthink tactics twice before executing them, the power of consumers is huge, the hyperconnective society is updated nearly in real-time, making the companies vulnerable when actions are not well thought.
The Volume and Impact equals the Word-of-Mouth Equity.
The Impact is determined by four aspects, Network, Sender, Message Content and Message Source.
The Volume is of importance with regard to the reach per message, but it doesn’t determine the quality of the reach. From an utopian one-on-one marketing point of perspective, the smaller the reach is, but the better the quality is, due to personalized or relevant alignment between Sender, Message and Receiver.

Why is it important to understand the impact on media convergence?
Because it offers many opportunities for companies to granulate content (in the Consequential and Intentional Word-of-Mouth) to create a most effective trigger for their consumers per touch point, per channel.
Online communities grow, vertical networks with highly specialized topics and followers do grow.
Networks become interoperable, devices become interoperable, content can be requested via mobile, laptop, TV and iPad, “small” is relative and the impact is and will be forceful.

The advent of Social TV is only going to increase the power of Word-of-Mouth Marketing to new levels, creating new opportunities and challenging companies at the same time to understand, yet another channel used by consumers.
Think of what will happen if TV widgets (Twitter, Facebook and others) will enable real-time direct communication with their network to comment on the content which is being broadcasted?
Advertising, product placements, concepts, lots will be subject to consumer influence, instantly.

I do think the Word-of-Mouth Equity is worth the try in understanding what kind of messages will impact the brand more than others.
What’s your opinion on Word-of-Mouth Marketing?
Is the equation one that you would experiment with in understanding the dynamics of Word-of-Mouth?

I came across a new patent which is filed by Apple on PatentlyApple.com.

It describes in detail what Apple how Apple is planning to revolutionize the current ticketing process, plus enhancing the event experience itself.
For further details, have a look at the article on PatentlyApple.com.

For me, two immediate questions arise.

Is Apple trying to smartly achieve a kind of All-you-need-is-the-iPhone state?
By centralizing processes and ascribing them to this device, a powerfull influence is created for the iPhone. Surely iTunes and it’s music is part of this move, but the centralized modus for the iPhone can of course be expanded to many other purposes as well.

Secondly, based on Porter’s Five Forces model, what will the impact be if Apple enters this business?
It certainly will put emphasis on the entry of a new player and the threat of substitute products/services. The patent refers to giving access to live recordings of the concert which visitors just attended or access to exclusive interviews. Who wouldn’t want this? It’s all additional and easy to access content, this will have consequences for other ticketing businesses who can’t offer this.
iTunes is a platform used by many, the bargaining power of customers will increase due to its innovative approach, raising the current intensity amongst existing players to outsmart Apple and “conventional” ticketing business.

Do you think the iPhone becomes the all-in-one-device?
If this will happen, how do you see the future or developments of the ticketing industry?

Interesting to have read the news that Boxee is looking for a Lead iPad and iPhone App Developer.
Their starting point is that they “consider ‘other screens’ as important as TVs for enjoying video.”
Signs of a furthering media convergent consumption continues.

I’m interested in seeing if and how they will differentiate the iPhone and iPad application in comparison to their television application. The iPhone screen isn’t too big, this might devaluate the watching experience. Maybe the focus of the iPhone application has a more social focus, whereas the iPad is a great substitution for the television screen?

What do you think the distinction between television, mobile and tablet will be?

For those who don’t know Boxee, check out this video taken from their website:

Almost a year passed by since I wrote The 3 Fundaments of Online Strategy.
Since then much has rapidly evolved, ubiquity is becoming a new standard.
New media devices are being released which expands the amount of channels and touch points for consumers. This challenges companies on a fast pace, keeping up with (technical/cultural) developments in order to offer that what consumers demand.

Emphasis must be put on mobile devices and how they change and add value to the marketing strategy.
The Online Strategy extends from the computer to all sorts of mobile devices which are being increasingly used in daily lives.

Every screen consists an application of its own three fundaments, moulding it in an integral marketing strategy.
The key is not to copy, but apply those aspects which fit the device and purpose/usage by user. Sometimes it means that it won’t be implemented, sometimes it does.

A good example is Linkedin. There’s a huge difference in purpose and final execution when you look at the “desktop” website and the iPhone app.
Another example is Lonely Planet, rapidly expanding its media exposure to the iPhone and iPad, it aren’t copies of their books or their core website. Both are well adapted products to the needs of the users in relation to the -mobile- device.
The company goes further though, it introduced as well the Lonely Planet Compass guides, an Augmented Reality application, again for the mobile device but with another purpose. The Compass Guides are a good example of the power and relevance of Location Based Services, it will grow in importance when we take into account the key mobile trend and technical pre-conditions by Morgan Stanley.
Last but not least, don’t underestimate the rise of Social TV, an extra screen to reach your target groups.

When the expanded functional strategy is formulated, be sure to evaluate your strategic options against Johnson and Scholes’ model of success criteria (Suitability, Feasibility, Acceptibility).
To reference to the hype around Social Media, jumping the bandwagon just because others do, is not based on strategic decision-making and it could harm the brand and corporate strategy overall.
It’s important to understand that this is just the beginning of mobile and understanding the effect on growth strategies and opportunities is a first step.

What’s your opinion on the expanding amount of channels and -possible- touch points with your target groups?

With anticipation I read the news on Twitter’s new ad platform and its revenue model.

Important details of the ad platform are (taken from Techcrunch):

* As we previously described, the new system serves up ads based on keywords in Twitter search queries.
* Promoted Tweets will appear at the top of the search results page, with small text indicating they were sponsored. The Times piece notes that companies could use this to combat negative tweets (they can place a positive tweet at the top of the page)
* A Promoted Tweet isn’t guaranteed to stay afloat for a long time — if the tweet isn’t tracking well in terms of replies, clicks, and a number of other metrics Twitter is calling “resonance”, it will be pulled, and the advertiser won’t pay for it.
* One ad will be shown at a time
* Initial ad partners include Best Buy, Virgin America, Starbucks, and Bravo
* Advertisers will be paying on a CPM basis initially, with plans to adjust the model once Twitter can better gauge how people are engaging with Promoted Tweets

I do think the time is here for Twitter to -at least try- to monetize micro-blogging as a communication/social-media channel, but I’m not too thrilled, like the COO, about the way tweets and streams are being monetized.
To be honest I don’t know what I expected, only not this search-engine like ad-model.
Just as with Search Engine Advertising, the model is based on keywords. Unfortunately, keywords are ambiguous which can add noise in the understanding of the intention by the user.
Of course this will be less because other users can interact/comment on a tweet in real-time, creating faster some sort of context around the keyword.

Imagine the following two scenario’s:
* If an user complains about a brand and searches for other tweets to read other opinions or interact, are users really awaiting for an ad of that brand or do they want attention from that brand?
* Now the other way around, when someone raves about a brand, from the brand point of perspective, don’t they want to empower these users instead of showing an ad?
In both cases, the purpose of ads and communication between users and brand are not matching and the touch-poins can be utilized much better.

Is an ad-based revenue model even possible/relevant in the micro-blogging environment?

I do think other revenue models are more qualitative and do match intentions better without over-commercialising communication streams and therefore are less bothering and interrupting the user experience.

The quest for a suitable revenue model goes on, it will be interesting to see what reactions are?

by Gianluigi  Cuccureddu and Richard Kastelein

The following quotes are taken from ConnectedTVSummit and they do point out to a major shift in hardware which is followed by software/applications that will transform the industry and experience:

Global revenues for connected TVs will reach $29 billion in 2011, accounting for 58% of global revenues for Internet TV equipment that year. 12.5% of 2010 global TVs shipped will have connectivity, rising to 30% in 2011.
IMS Research, January 2010

Our research shows that within five years nearly all broadband households will own at least one web-enabled CE media device.The implications of this across the digital entertainment industry will be huge.”
Norm Bogen, In-Stat analyst, January 2010

Game consoles already have the lead in this segment, which can mostly be attributed to gamer demographics . I think that even gamers will switch to accessing Internet video mostly on the TV in order to have a one-stop access point to the different content libraries. Having one programme guide is much easier to navigate then searching independently on different devices.”
Rebecca Kurlak, IMS Research consumer electronics analyst, January 2010

Worldwide shipments of web-enabled stationary CE devices will grow more than seven-fold from their 2009 levels to over 230 million by 2013.  There will be over one-half billion web-enabled CE devices in operation worldwide by 2013.
In-Stat, January 2010

CE device manufacturers will be able to enjoy revenue shares on content, which could be as high as 50%.
Rebecca Kurlak, IMS Research consumer electronics analyst, January 2010

When having a look at the timing of the quotes with regard to the evolution, the future of all this is closely. Also other institutions/articles point out to a first real shift in 2010 and 2011 where adoption and diffusion will reach a substantial figure.

Other interesting and positive quotes can be found in this recent analysis and article by Bloomberg:

It’s no longer a bridge too far for the average user,” said Michael Powell, a former chairman of the Federal Communications Commission who now runs a media consulting firm. Using TVs to connect to the Internet “is a very natural extension of what they’ve already embraced in their technological life.

The difference now is new Internet televisions won’t require separate boxes, software and setup, says Steve Perlman, the founder of WebTV. The TV will already be connected to the Web, and consumers will get everything they need through that.

It is going to happen — it’s inevitable,” Perlman said. “We’re going to see a general movement toward having all of your content that is available through the Internet.

The fact is, it appears that the next generation of Internet-connected TV’s are going to come out faster than most anticipated, and this means  that the need for  Set Top Boxes (STB’s)  will eventually reduce and even possibly phase out in the future.  This is certainly a real game changer and lowers the perceive risks and complexity of the end consumers.

Perlman’s quote that we’ll see a general movement towards having all the content available through the Web is a positive outlook and simultaneously a challenge in not simply transferring media from device to device and not having a thorough look at the device, usage/purpose of device in relation to the needs and consumption of consumers.

This challenge was also pointed out in the Android TV article.

The industry is ready for it, most definately, what about the end-consumers?

Do you think there will be a fast adoption and usage? How will the collective experience of watching passive TV be impacted by elements of individual social interaction such as Twitter and Facebook via tv widgets and apps? Or will it?

Forty years ago, the brilliant Canadian media theorist Marshall Mcluhan, the  “patron saint” of Wired magazine,  (who brought us Electronic Interdependence, The Global Village and The Medium is the Massage) metaphorically considered the TV to be an ‘electronic’ hearth – a collective centralized event for the family on the cusp of it’s appearance in the home 50 years ago. By the end of the millenium, TV’s peppered houses and became a more individual experience. In the USA,  the average house now has 2.24 TV’s and 66 per cent of households have three or more TV’s.

Will the TV continue to evolve as an individual device in a new ‘TV Everywhere’ world? And just become part of a matrix of interactive devices available to each individual?

And how will Google fit into the picture? The world’s largest brand is certainly heading for the space. They are not issuing any formal statements on their future in this landscape, but look at what they want in their new hires – http://bit.ly/gootv.

We think that Google TV and Sony along with their other partners at Intel and Logitech could also play a large part in this new landscape.

Last year Lonely Planet launched the Augmented Reality application called Lonely Planet Compass Guides.
Last Sunday -one day after the launch of the iPad- Lonely Planet has released an iPad application named Lonely Planet’s 1000 Ultimate Experiences.

Two quotes by the the CEO Matt Goldberg (taken from Travolution):

“The iPad is a ground breaking device that gives us the flexibility to publish content in extraordinary ways we would never have thought possible a year ago,” said Matt Goldberg, Lonely Planet chief executive.

“We are delighted to offer an exciting new product for the launch of iPad and are experimenting restlessly with new technologies and platforms as we build on our strategy to become the world’s leading travel media and services provider.”

The application is inspired on their book with the same name, giving the user a digital experience of the top 1000 places.

(taken from Tnooz)

Once again, it’s interesting to see the innovation within the travel industry and how it’s applied in new business opportunities. The same article by Travolution mentions that the InterContinental Hotels Group is going to equip their concierge teams with iPads. The iPad is a great device in showing visuals to their guests in a new, innovative and portable way.

On Lonely Planet’s corporate level, it’s a decision which fits into their long-term goal. The diffusion of their information, and the easy usage and access will benefit retention amongst their target groups. When iPads become available with non-WiFi Internet connection, the application can be enhanced with User Generated Content on the spot.

If you have an iPad and a traveler, would you buy this application or not? If not, why?

Finally, yesterday was the day that the iPad became available in the US.
Much is written about the iPad and about its launch. Now that it is available, check out the video below for a well in-depth introduction of the device.

Already, 2300 applications are available for the device.
This article discusses eight Twitter apps for the brand new iPad.
The article by the Wall Street Journal shows screenshots of several apps.
Ubiquity, social media and applications reinforce each other, the market of applications will remain growing explosively if the iPad proves its value.
If this will happen, businesses need to (re)think there strategies when it comes to platforms, target groups and visibility.
Desktop applications won’t suffice anymore, those who react on the omnipresent needs, might well win battles.
The bigger question will be: to build or not to build?
When the iPhone was released, tailormade application development had a reserved character by many, with the release of the iPad -and most probably many more to come-, mobile as a strategy becomes central.
‘Mobile First’ – Google’s new Mantra is an announcement of what is coming and will happen in the mobile and wireless industry.

How do you see the mobile industry react and evolve the next coming year?

Various media and websites already referred to the rumor of a mobile ad platform, called iAd.
MediaPost announces that Apple is preparing a personalized mobile advertising system which could well be “the next big thing”.

Interesting are the release dates of both the iPad and iAd.
April 3rd is the official launch of the iPad, only for days later is the supposed launch of iAd.
This could well mean that there are -any kind of- ties between iAd, iPad and the iPhone.

A mobile advertising platform means serving location based ads, adding contextual relevancy to the ads, creating a second generation of proximity marketing.
In the same article by MediaPost, it points out that Google has won patents on technologies that serve dynamically ads based upon one’s location.

All that can be concluded from this is that the battle between Apple and Google is by far not over. It makes it only more interesting, competitiveness raises and accelerates innovation and developments which only benefits the users.

Let’s wait and see what happens next week. A counter-attack on Google’s AdMob acquisition and development is bound to come, a possible launch in close relation to the iPad makes it more impacting.

What do you think of a possible mobile ad platform by Apple?

Within a few months it will be possible to get Skype on your TV.
The TV manufacturing partners of Skype,  LG and Panasonic have embedded Skype in their internet-connected HDTVs.

This is a new and great way to communicate with your family and friends, away from the computer. A large screen further intensifies the experience.
The relax factor is an advantage as well for the users (and a USP for Skype TV), video calling on a big screen on a couch does certainly make it a more fun call-experience.

Follow @skypeonyourtv on Twitter if you want to receive updates.

What do you think of this move by Skype, bringing videocalling to the TV?