Four Things to plan before designing Groupon promotion

How to plan a Groupon promotion?

Yesterday, I wrote about the top reasons to offer a group buying campaign / promotion. If your goal is one of the top 5 mentioned, you can possibly get positive returns from your offer. However, you need to do some planning before the campaign. Below you can find the 4 most important issues on planning a group buying promotion:

1)    Define your Goal (see see Top five reasons you should offer a Groupon promotion) if non of those are your reasons, think twice before designing your campaign

2)    Plan for minimum cannibalization; Talk to your customers, try to get a rough estimate on how many percent are “deal chasers” using group buying sites. If you think it is more than half, forget about the campaign (cannibalization of your current sales will not only hurt you financially, on top of it; the lower price will destroy your perceived value)

3)    If you are structuring the deal as a trial, have a plan / next step for your “trial” customers. How will you benefit from the trial? What is your next step to convert these trial clients into profitable customers? if you don’t have a solid plan and a great product/service, it is hard to get a positive return

4)    Do the financial analysis. Make sure your offer is at least higher priced than the variable costs (like supplies). Even if you are using the deal as an advertisement for higher awareness, make sure the costs will not get out of control.

Top Five Reasons to Offer a Groupon Promotion

Why to use a group buying campaign / promotion?

If you do not have a valid reason and strategy behind your actions, this tool, like all other tools for web marketing, will backfire on your business. You should first have a valid reason for utilizing a group buying campaign. Below, you can find the top 5 most suitable reasons for offering a group buying promotion:

1)    Selling excess capacity; if you have a huge inventory or low capacity utilization, group buying sites can be great for you to utilize your production capacity

2)    Advertising for awareness; if structured well (low cannibalization, covering variable costs, and not destructing the perceived value much), group buying models are the best awareness tool that you can use

3)    Giving a trial to an excellent but not very well known product/service; if you believe in your product very much, and think the customers will be back, no matter the price point, then this is a great way to make your trial known (make it clear to your users, this is only a trial pricing)

4)    The Refill Model (the model utilized by firms like Gillette & HP likes); sell the main products on group buying sites and the customers has to buy refills from you in the future

5)    Cyclic / Seasonal business promotions; if your sector suffers from seasonality this is a great way to increase utilization on low seasons (make sure that the promotions are only for low seasons)

The measurement game

Last month I wrote about some problems in “Measuring Marketing Performance“. This time another problem surfaced the web on TechMeme.

Again and again we hear about wrong “success stories” with misunderstood performance indicators within the sector or on media.
The Foursquare success story for McDonald’s even made the headlines for NewYork Times. In most cases when you hear a story, simply the numbers don’t add up. In this case foursquare check-ins were mistakenly used as foot traffic increase to all McDonalds stores.
Even though these might seem like a good way to impress the boss or client, there will always be “Radical Marketers” to debunk.

“Push marketing” has died, long live “pull marketing”

Who am I talking to?
“You Ought To Know” video was produced two years ago by Hubspot as a viral marketing campaign. It is unfortunate that today most of the marketers still don’t get the idea behind the video.
Marketing is changing, this is the era of pull marketing.
It is a great video, highly recommended for all Radical Marketers. Don’t forget; “Radical Marketers are pull marketers”.

Measuring Marketing Performance

HBR send me today an e-mail on “Measuring Marketing Performance”. I am sure the material which is dated Feb. 2007 is a great source for many new marketers. However, I am skeptical on two points;

1) In this changing marketing world, I wouldn’t advertise on such a topic “Measuring Marketing Performance” which is outdated 3,5 years. In marketing terms this means pre-twitter & pre-Facebook era. I would strongly insist that measuring Facebook & twitter sentiments correctly are both most important and most challenging issues in Measuring Marketing Performance.

2) The tag line of the mail said;”If you’re not measuring marketing, you’re not marketing”. We radical marketers strongly oppose this statement, as well. The competitive edge of marketing lies in the grey area (which is not really well measurable area). So I say; “If you are measuring everything well in marketing, you are not marketing.”

The end of advertising era

I have written many times about the end of advertising era & end of the 30 second spot. FITC, the design and technology event organizer recently released “The Last Advertising Agency On Earth” video, which puts “The end of advertising era” in nicely on a video. It is also a smart viral move on their part. They are putting their money on where their mouth is, a big applause from RadicalMarketer;

4 Tactics for Social Commerce on Facebook

The biggest challenge to e-commerce in the Social Web Era is the emerging Social Commerce. With the raise of Social Commerce, Facebook is becoming the Mecca for commerce. Companies need to be fast to grab land on Facebook. Below you can find the best ways to implement Social Commerce on Facebook;

1) Integrate Facebook Like button to your product description page

This is a must for any e-Commerce site. It is easy to implement, and an instant win for any ecommerce site. Also, it is the most used tactic already on eCommerce sites.

2) Advertise on Facebook to drive traffic directly to your product pages

Paid advertising on Social media is often mixed with social media activities. However, it is a totally different discipline and is much easier to set up and run than any social media activity. However, remember following four advise when advertising on Facebook;

  • Don’t let your online media planner run static / boring advertising on this media. Facebook advertising should be managed in savvy hands who have a good understanding on advertising on Facebook
  • You should understand that the real cost on Facebook advertising doesn’t lie on the amounts paid to the media, but costs are in managing the campaigns in the required detail with a savvy team
  • Automated solutions can help you reduce costs, but don’t try to lower your managing budget with automated solutions and cut on headcount for managing the campaigns, because automated solutions when not audited can cause much more harm than help
  • Manage product launches differently than your everyday campaigns; don’t fall into the basic mistake of stopping or modifying everyday campaigns during product launches. Also keep in mind that during a product launch a social media activity backed with advertising is much more effective than just advertising on social media

3) Use Facebook Login for your e-Commerce site

Facebook Login is a great way to authenticate people on your eCommerce site. This functionality does not only enable the easy sharing of thoughts and likes on your products, but is also a great win if you want to increase your user base fast. It is an ease of use for visitors in order to quickly login to your site in one click.

4) Build your eCommerce application on Facebook

Companies are planning to develop their own applications on Facebook. An e-Commerce application on Facebook has three major advantages,

  • Presence: Your customer is already there (They don’t come to your web site every day)
  • Ease of use: There is an opportunity to increase ease of you on two dimensions; first the real ease of use by making it simple to shop, second the perceived ease of use by just being on Facebook
  • Trust: People will have less trust issues on Facebook domain than your company-specific domain to share their information with you

These three advantages will increase your potential buyers, since there is a target population who find it difficult to shop on different sites or are still afraid to shop online from e-commerce sites. For any online retailer with serious online revenue eCommerce application on Facebook is a great way to increase sales.

If you have not already applied social commerce tactics for your company or are resisting social commerce reality, please see the data below. Both are recent (June, 2010) survey results of US online marketers on Social Plug-ins & Social Commerce plans.

1) Facebook Social Plug-ins implemented by online marketers
2) Facebook Social Commerce Plans for online marketers


The 4th Era of Internet is starting

We are again in the midst of a new evolution. There is another change of era on the internet. Like the Chinese curse says: “May you live in interesting times!” The new era will bring new challenge to each one of us, not to mention the major effects on marketers.
We can divide the internet age into four era:
1) Academic Internet Era (before 1993)
Enabling technology: the internet infrastructure
2) The Browsable Web Era (1993 to 1999/2000)
Enabling technology: world wide web
3) The Searchable Web Era (2000 to 2010)
Enabling technology: Google Search
4) The Mobile & Social Web Era ( 2010 to …)
Enabling technology: Apple (iPad/iPhone) & Facebook Like
All the new era’s on the internet brought it’s own winners and losers and new business models to the internet. The fourth era, however is even more challenging. The change is on two axis; the mobility (always on mechanism), and the social aspects of the internet. This era will not only bring it’s own winners and losers and business models, but will also touch the DNA of capitalism, democracy and the society. It will touch every company, every political party, every government, every NGO, every family much deeper.
The big change that the 4th era is bringing is the social aspect which will change our habits of consuming the internet. Web will not be ranked to Google’s algorithm anymore, but with our friends choices (that is “Facebook Like” functionality).
Pete Cashmore of Mashable takes it even further saying; “Facebook seeks to replace this open system of links between pages with the “social links” (or Likes) that it controls. Google and other search engines won’t have full access to all these Likes, so the company best positioned to rank the Web will be Facebook.” (see the full article on CNN: Google’s nightmare: Facebook ‘Like’ replaces links )
PS. The bad voices against Facebook and its somehow “ethically challenged” founder Mark Zuckerberg are also to note. I hope Facebook will be in the hands of good management and it will be an enabling catalysator to this new evolution.

Banner Advertisement on internet is annoying

Another myth / hypothesis of the RadicalMarketer is backed with data. Thanks for Mc Kinsey for the UK survey.

Banner Advertisement

The reason why the “Radical Marketer” advises his brands to spend more on Paid Search, instead of the internet banners are proven with data now.

However, where the McKinsey study lacks is; this chart doesn’t get into detail of which banners are annoying. We advise companies to use banners only to selected, targeted consumers with a respect for their interest (this translates to good media planning and targeted banner creation for each specific media).

How to buy Promoted Tweets

Twitter announced its new ad serving platform; Promoted Tweets.

The details can be found on;

  • NY Times article “Twitter Unveils Plans to Draw Money From Ads”
  • AdAge article “Twitter Has a Business Model: ‘Promoted Tweets’ “
  • TechCrunch article “Full Details On Twitter’s Long-Awaited Ad Platform: Promoted Tweets”

These articles state that, initial ad partners include Best Buy, Virgin America, Starbucks, and Bravo. It seems like you can not advertise without being a partner yet.

How to buy Promoted Tweets is still a question mark. Please share, if you have any information on “How to buy Promoted Tweets”.

Effective usage of Social Media

Unfortunately, Social Media is used poorly and ineffectively by many of us. Today’s article “the social media bubble” on HBR blog by Umair Haque was mentioning some of the points that we were discussing with companies which wanted to enter the social media space in their marketing efforts.

I agree with most of Umair’s comments;

  • There is relationship inflation and many relations are thin on the social media
  • On trust & value issues there are problems in usage of social media (by both the marketers and the general consumers)

Yes; most of the relations on social media are thin, yes; most marketers don’t understand and make a bubble out of social media. However, if you know how to build trust & value, you can also build these online on social media. Just because we cannot use social media effectively doesn’t mean that social media is a bubble. We need radical marketers and C-level involvement to make things happen in the social media space.

As I wrote before; “It is amazing how many people in the marketing area are looking at social marketing from a very narrow angle.

Umair’s final remarks are where I agree the most; “The promise of the Internet wasn’t merely to inflate relationships, without adding depth, resonance, and meaning. It was to fundamentally rewire people, communities, civil society, business, and the state — through thicker, stronger, more meaningful relationships. That’s where the future of media lies.”

Business executives must understand the future of media and should avoid involving their companies and brands in the social media bubble.

You can see my earlier blog entry on social media at “Social Marketing is not a tactic”

How To Evaluate Advertising

Today, I was revising our “Advertising Evaluation Form” (don’t tell people, that we have a process for this, they think we are gurus).

I just wanted to share a portion of Bob Hoffman’s article on Forbes.com How To Evaluate Advertising – Forbes.com. Bob’s view helped me on my form.

“when you’re evaluating advertising, avoid meaningless slogans and look for your product’s difference. Then judge how well the ad dramatizes that difference, how honest the message is, how simply the message is presented and whether or not there is some interesting news for your customer that translates into a benefit. If the advertising does some or all of that, it’s good. If not, it’s bad.”

If anybody is interested, I will be happy to share the whole document – Advertising Evaluation Form – as well.

The 4 Key Sucess Factors for CMOs

I was reading an article on “Top Performance Success Factors” in Advertising Age; and wanted to sum up my thinking on top 4 success factors for CMOs below.

Top 4 Success Factors for CMO’s

  1. Senior level (with a marketing knowledge) involvement in recruitment and procurement
  2. Seeking strategic alliances, not agencies
  3. Making targeted long term investments in people, companies and systems
  4. Developing strong processes in marketing

Note that these differ from the original article.

Digital Agencies Aren’t Ready to Lead

“because most of them don’t know the business of marketing” is the answer of Ana Andjelic on the Advertising Age article.

So what is the solution today?

Find a digital agency which understands from the business of marketing.

I know it is extremely hard to find one, but I know it is not impossible 😉

The successful Marketing directors of the future will be the ones who will spot the right digital agency – not the “flashy ones” – which understands from the business of marketing . One clue that I can share with “Radical Marketers” is that, they should look into the DNA of the digital agencies and understand the backgrounds of key employees.

Of course, only spotting the right agency will not bring much success to the marketing directors, but creating the right environment for an efficient and long lasting relation will do.

Also note what Advertising Age says on traditional agencies:

For every marketing challenge, their solution is “better creativity.”

This is really harsh, but to tell you the truth, this is mostly the case in the industry.

Another good finding was:

“As much as people like to talk about the agency of the future, it will never happen until the client gets there first.”

I see many clients with great expectations, but mostly the organization, the human capital and the vision of the marketing department are mostly the bottleneck why digital agencies aren’t ready to lead.

See the full Advertising Age article which inspired me for this post at Why Digital Agencies Aren’t Ready to Lead – Advertising Age – DigitalNext.

How to hire a digital agency

How to hire a digital agency – the most important CMO task

One of the major obstacles on the move towards new marketing is the lacking decision making in the choice of digital agencies.

Recently, iMediaConnection had an article on this issue. (To see the full article please visit; A CMOs guide to hiring a digital agency – iMediaConnection.com.)

You can find my takeout and thinking on this article below.

Three things not to miss when choosing a digital agency:

1) Understand that nobody serves a perfect full service and you need either a great team or a lead agency.

from the article: “Do you opt for a “specialist” agency — a social media shop, for example — to work in a highly technical area, or do you hire one agency that can bring it all together at the risk of sacrificing some key knowledge in an emerging area?…

… If you have the time and staff to orchestrate across multiple specialists, then you have the option to spread the love. If youre like most organizations, however, and youre short-staffed and time-crunched, then you should find and assign a lead agency and have them sub-contract for the specialists.”

2) Don’t try to catch up with each trend yourself, it doesn’t pay off

from the article: “digital creates new communication channels faster than advertisers can figure out how to use them…

…If you try to have a specialist for every niche, you’ll constantly be searching for a specialist for the next new thing,”

3) Look for thought leadership and be courageous to empower the thought leaders (even if they are outside of your company).

from the article: “If you have a lead agency responsible for bringing holistic thinking, then they will have the responsibility to be constantly searching for those specialists and providing you with thought leadership and success.”

Also, the article correctly pointed on an often problem creating area; the view of the CMO and the marketing team.

“the assumption that the onus is on the agency to make its client happy won’t get a CMO very far in the long-run”

That is so correct, and just a change in this view might change the total outcome of the marketing efforts (needless to say, if the company was smart enough to choose the right agency).