At a recent event organized by a local networking group where Balihoo presented, one of the questions that came from the audience was: ‘How do you keep innovation moving forward on your product/service’. Our response was fairly simple – we scan for innovations in the marketing industry and figure out how to how to integrate it into our platform and then simplify it for our target customer base - the local marketer. Simple response but an interesting challenge to execute on. Its not just a question of how we would do it, but deciding if and when to add a new tool to the local marketer’s tool belt. Integrating a new innovative tool too soon could result in confusion, lower adoption and/or wasted development effort. Doing it too late might have customers viewing the gap created by not having it as a detractor from your overall value proposition.
I think mobile marketing technology is a great example that illustrates this point very well. It is one of the spaces we are watching, analyzing and exploring very carefully. There are many different innovations in mobile marketing – all at various stages of technical maturity and customer adoption/utility. I recently received a new mobile marketing whitepaper from a digital marketing company called Knotice. The paper provides a great overview of the Mobile Marketing Space (Get the whitepaper here) and does an excellent job of breaking down the different types of mobile marketing options, and current audience makeup. It identified the following categories:
- SMS/MMS
- Mobile Web
- Mobile Apps
- Mobile Ads
- Other (mobile video, games, music, ringtones, wallpaper, downloads)
- Emerging (2-D codes, GPS, RFID, Bluetooth)
There is clearly no shortage of innovation in the mobile marketing sector! That is an amazingly diverse set of options and only going to grow as the space matures. Some of these will continue to gain adoption, others may wane, and new options will continue to be created. This brings us back to our interesting challenge of integrating and simplify marketing innovations to bring the highest overall value to our customer base at the right time. Which of these options will offer the highest value, at what time, and for how long? This is part of what makes product management both great fun, and a challenging puzzle that has no known solution. It comes down to making informed decisions with diverse data. Talking to clients, customers and the market helps us craft a product roadmap that will deliver the highest value to our customers and ultimately to our company.
Do we have everything figured out and aligned perfectly to attack the mobile space for our target customers? No - unfortunately the crystal ball is not working today, however with a broad spectrum of diverse inputs, it puts us in a great place to navigate the waters in way that allows us to test, and change course rapidly.
Marketing obviously doesn’t get easier during a recession – according to the 2009 ANA/MMA Marketing Accountability Survey three-fourths of marketers had their budgets cut this year and two-thirds were expected to drive more sales with their newly lowered budget. The number one reported strategy for marketers who wanted to improve effectiveness without spending more was to switch up their marketing mix from traditional to digital.
It will be interesting to see how the average marketer’s media mix will change over the next several years (as the economy begins to improve). Over the past 16-months, marketers have noted that interactive marketing has proven to be more effective and efficient and are therefore moving their dollars from traditional media toward less expensive and more efficient interactive tools – enabling them to accomplish current advertising goals with less money.
Also of interest, more than 50% of respondents reported that they had shifted spending away from brand-building initiatives and 38% were putting more spending in lower-cost media. While it makes sense for a brand with a solid, seemingly impenetrable image to take a step away from branding-building and focus their dollars elsewhere – neglecting to develop or deepen a brand that is relatively unknown or seemingly weak can destroy a company – especially in a down economy.
Undoubtedly one of the best parts of my job is learning more about our client’s business. Often times, we are only engaged in marketing and advertising discussions and are not privy to the details of their over-arching objectives and business problems faced daily. By getting a glimpse into new product lines, pricing concerns and inventory management, it allows us, as marketers to make more informed recommendations. It allows us to take into consideration outside influences and ensure we think beyond the best price for a media impression and which local news website to purchase during their next campaign.
Last week we had this opportunity at Carpet One Floor and Home’s Summer Convention in Orlando. Balihoo had the chance to meet members we regularly communicate with via email and phone conversations and spend time with them learning more about their business. Not only were we able to discuss marketing needs, but we had the opportunity to visit with their other vendors and product line representatives to gain more knowledge about the business decisions they make on a daily basis. It was the perfect opportunity to remind ourselves that for most of our client’s, marketing is not their main concern or expertise.
Our focus at Balihoo is to provide customized marketing solutions and recommendations that deliver against traffic and sales objectives while taking into consideration budget concerns, local market nuances and media efficiencies. By gaining first-hand knowledge of members remaining business challenges we are better positioned to tailor every recommendation to each of our client’s individual needs.
Since moving to Boise, a drier climate than my native home of Seattle, I’ve discovered I have an affliction I never knew existed: allergies. Now a simple morning ritual such as putting on mascara has me sneezing and itching my swollen eyes. And like most young professionals, getting to the doctor’s office for a basic visit to treat allergies is nearly impossible given the hectic work week. So what do I do? I go online and search every keyword combination I can imagine, scour chat rooms, visit WebMD, and research the merits of Zyrtec and antihistamine eye drops before finally deciding to visit a physician.
I am definitely no expert on allergies and certainly have no business trying to self-diagnose and develop a treatment plan, but given the vast amount of information we now have at our fingertips, I found that I am not alone. Even my grandmother is researching arthritis treatments and denture options before visiting a professional. A new study published by Pew Internet and American Life Project found the 61% of Americans, up from 25% in 2000, now look to the internet to research health options along with traditional means. In addition, they are making decisions based on what they read; 60% reported that the information they found online affected a decision on how they treat an illness or condition.
http://www.marketingcharts.com/interactive/61-of-american-adults-seek-online-medical-info-9464/
Now more than ever we are managing our health care options like we organize the family trip to Italy, and health care professionals need to take notice, follow the trend, and consider altering their communication strategy.
I was shocked when searching for an allergist in Boise and not one physician or clinic had sponsored links on Google. Don’t the clinics realize that as a young adult this is the only way I know how to find a service? Yellow pages – it goes straight in the recycle bin. Website and search opmtization are a safe place for medical providers to begin advertising. Once you start to see call volume increase it may be time to consider proactively getting your message in front of patients. I get plenty of junk mail from Bed Bath and Beyond and the local grocer and would welcome a piece on treating allergies when the pollen count exceeds 1,000.
If you follow Balihoo, you’ll know that one of most important customers is Carpet One Floor & Home. Our marketer product enables their corporate marketing group to distribute all of their creative assets to the local markets and gives those local members the ability to customize all of those materials and place them in their local media and marketing.
One of the services we offer the Carpet One dealers is media planning and buying -as a result we are heavily involved and engaged in their local marketing efforts across the country. I’m consistently surprised at the level of thought, strategy and inguinity these local business owners 
demonstrate in their efforts.
Last week I interacted with Kerns Carpet One and it was the very first time one of the dealers mentioned that they were using Faceboook to promote their business. You can find them on Facebook here. You can see on their profile that they’re not only using it to keep customers up-to-date on promotions and activities within their business, but they’re also posting pictures of jobs and before/after comparisons. I think it’s a fantastic use of the medium and of Facebook to engage with their customers this way.
The economy is no doubt tough right now, but it’s the retail folks that stay engaged with their customers and continue to push the envelope that will be successful. Coincidentally, our local newspaper recently did a big write-up on local businesses here using Facebook and Twitter to market themselves that you’ll find interesting. Kudos to those businesses that continue to push the envelope!
No question about it that the economic roller coaster we’re all on is the top story every where you look. Franchise Times just published its annual Top 200 Franchise Systems ranking, and other than the real estate sector, many franchise organizations had strong growth and sales in 2007. Convenience store chains such as 7-Eleven fared well. Hotels and casual dining restaurants like Chili’s and T.G.I. Fridays also had a strong year. These franchise organizations are strongly positioned to weather the current economic volatility that is bound to shake up the Franchise Times annual list when it comes out next year. Budgets cuts are likely on the way, if they haven’t occurred already. Many organizations will be called upon to cut costs and improve efficiencies across the board.
One franchise organization, Carpet One Floor & Home, has already taken steps to improve the efficiency of its marketing programs. Carpet One has rolled out Balihoo’s ad management solution - Balihoo Marketer Edition - to 300 Carpet One dealers across the U.S., aiming to distribute the platform to 900 outlets in the coming year. Carpet One dealers in small towns and cities across the U.S. are currently using Balihoo to research, plan and execute local advertising and marketing campaigns. This is a great example of a franchisor using innovative technology and approaches to help its network of dealers cost-effectively stay top of mind with local customers.
Here’s another proof point about the limitations of ad networks, especially for publishers. As we noted in this blog, the IAB couldn’t have made it clearer in their recent study finding that publishers selling inventory through ad networks are making sales at an average 90 percent discount versus direct sales rates. Forbes has decided not to hand all of those ad dollars to third party ad networks, so they have been finding creative approaches to entice ad buyers with ad programs aimed at increasing direct sales. Most recently, as covered in Mediapost, Forbes announced its ‘Total Guarantee’ program, allowing marketers to specify how many people they want to reach within their target audience as well as ad frequency. We’re seeing more publishers begin to launch creative new approaches like this to drive more direct sales rather than relying so heavily on third party ad networks. Technology publisher TechInsights recently launched TechInsights Direct, a self-serve portal for media buyers powered by Balihoo Publisher Edition. TechInsights Direct helps the publisher sell more inventory directly and exercise full control over how their inventory is presented to media buyers. Sports Illustrated recently launched it’s SI Marketplace for media buyers. There are differences in these approaches as Balihoo noted, but we definitely see a trend developing - publishers using new technologies and approaches as an alternative to ad networks. We expect this trend to gain momentum in 2009.
Just two weeks after we announced our product for Publishers and only 4 days after TechInsights launched their implementation, Sports Illustrated and eBay have teamed to launch the SI Media Marketplace.
Regardless of the competitive issues (I’ll get to that later) it’s great to see more players in this space. My advice to publishers in a recent 
post, the Ad Network Conundrum, called for publishers to be looking at other ways to more efficiently and effectively sell their advertising inventory. These two announcements are great examples of forward-thinking publishers pushing the envelope and taking the next step in ad sales - a step that doesn’t sacrifice 90% of their revenue (or their brand). To see a great example of how TechInsights is positioning TechInsights Direct to their media buyers, check out this link (fancy flash video).
Now, although this announcement is obviously a good thing for the industry and Balihoo, I can’t let it go without calling out some of the specific differences between this solution and Balihoo Publisher Edition:
- This is an auction-based site (hence eBay) while Balihoo Publisher Edition is fixed-pricing. We feel a fixed-price system is more representative of how premium publishers want to represent their brand and their inventory.
- Mark Ford, President of Sports Illustrated, stated that actually closing the deal after the auction required human intervention. This is not the case with Balihoo, the entire buy can happen in a self-service model (although a user can talk to a salesperson if needed).
- Although they dance around the issue a bit, it seems this product is primarily for time-sensitive (hence expiring soon) inventory. Balihoo Publisher Edition is designed to do a equally good job at selling all inventory - premium, standard or remnant.
- It’s unclear exactly what’s offered in the system - but one of the key benefits of Balihoo is the ability for a publisher to bundle inventory together across mediums and properties
This is a case where it’s great for us to see another player enter the market, it’s good to have competition!
What a pickle we find ourselves in when it comes to ad networks. A recent IAB/Bain & Company study on the industry revealed a few interesting and conflicting facts about these networks that we love to hate:
- Usage of ad networks to sell inventory has increased dramatically – from 5% in 2006 to 30% in 2007.
- The impact of ad networks on prices is dramatic – an average of 90% discount (no, not a typo) relative to the pulishers’ typical prices
So, what does this mean for the major players in the ecosystem?
Advertisers – They’re obviously happy about the pricing impact ad networks have. However, many times this comes with significant tradeoffs including blind sites and an inability to have any control over the association of your brand with particular content.
Agencies – Agencies like the prices, but the most interesting thing for them is the convenience of aggregating impressions to buy from a single source. However, I would argue that that’s not a particularly long term strategic play – it’s not sustainable (it’s easy to buy from an ad network). Agencies could add significant value by using tools to streamline their processes so they can efficiently buy highly-targeted sites on an individual basis. Enter Balihoo Agency Edition.
Publishers – This is where we hear the outcry regarding the ad networks, they’re feeling the pinch of the pricing discounts. However, that clearly has not discouraged them from using the networks (given their growth numbers). My opinion is that Publishers should be looking at other ways to more efficiently and effectively sell their advertising inventory instead of just increasingly relying on the networks – such as Balihoo Publisher Edition.
You can read more on this topic for yourself at:
AdAge – Ad Networks Drive Down CPM’s
MediaWeek – More Publisher Selling via Ad Nets
