Tech the halls with deals and folly

  • Advertising
  • June 10, 2011
  • Michael Carney
Tech the halls with deals and folly

In this issue of Michael Carney's Marketing Week, Apple's iCloud and the apparent quest to create online gated communities, Groupon quickly ensconces itself on New Zealand's e-commerce scene, what Australia's daily deal code of conduct says about the maturing of this new commercial phenomenon, Google's attempt at sharing and a cautionary tourism tale New Zealand would be wise to take heed of. 

Wandering Lonely As An iCloud

The legendary crimefighter The Shadow (created for radio in the 1930s and subsequently brought to life in print and at the movies) had "the power to cloud men's minds so they cannot see him". The current recipient of that mysterious power is a legend in his own right: Steve Jobs, whose Apple product pronouncements similarly cloud the critical judgement of those caught in his orbit.

Latest offering from Mr Jobs: iCloud. No, not a device for doing what comes naturally for this technological showman, but rather a service to house customers' data remotely, so that it's available across all iOS devices (iPhone, iPad and iPod Touch) as well as those Macs running the newest Lion operating system.

Jobs pitched the service as a means of keeping multiple devices in sync and up-to-date—music, photos, apps, document and other data is stored remotely and available to all your devices—but what iCloud really offers is a customer loyalty ecosystem, keeping the faithful locked in. If all your content is stored in the iCloud, it'll be that much more inconvenient for you to switch arbitrarily to another operating system such as Google's Android.

The iCloud represents an interesting development in the hypercompetitive computer industry, one that takes us back kicking and screaming to the days when heavy metal IBM mainframes ruled the world and only interconnected easily with other IBM devices. Back then, in the sixties and seventies, IBM's competitors could make little progress against the entrenched and highly successful computing giant. Small wonder that the industry leaders were collectively described as "IBM and the Seven Dwarves".

It seems incomprehensible now, but early email systems didn't even talk to each other unless they were running the same programme or operating system. Interoperability? Common standards? Hippie dreams!

A monopoly position is a wonderful thing to have, if you're the incumbent, so we shouldn't be too surprised that the leading technology companies of our time (Microsoft, Google, Apple, Facebook) are all trying to return to the days of gated communities and closed user groups.

It's an outcome that should definitely be discouraged. Look how long it took us to knock down the Berlin Wall.

GroupThink

We're officially impressed. Despite being last to the party, Groupon New Zealand has leapt tall buildings with a single bound and slipped past its keenest competitors in the group buying sector (and in particular the longest-established local site, GrabOne) to seize third place in the online "Shopping & Classified" category at least for last week (week ending 4 June).

That's as ranked by numbers of visits for the week, according to the the Hitwise Online Competitive Intelligence service, which bases its daily insights on the online usage and search behaviour of 460,000 NZ Internet users.

Here's the Top Ten in the "Shopping & Classified" category, led as usual by Trade Me (with longtime daily deal site One Day a clear number two):

1 Trade Me 37.10%

2 One Day 4.24%

3 Grouponnz 2.16%

4 GrabOne 2.15%

5 eBay 1.86%

6 Amazon.com 1.60%

7 NZsale.co.nz 1.28%

8 Mighty Ape 0.98%

9 TreatMe 0.88%

10 TaoBao 0.77%

Lest any ecommerce operator get too complacement about its position on the list, we should note that there are storm clouds on the horizon, with two major players looming large.

First, we note the arrival in New Zealand of Facebook Check-In Deals, one of two deal-based offerings from the social giant (the other, simply named Facebook Deals just to confuse us, is currently being tested in the U.S. but will no doubt roll out around the world in due course). Both these offerings take advantage of the social aspects of Facebook to spread the word instantly when users purchase deals. Consumers need do nothing (except not opt out) and their latest indulgences will be shared with their friends. [We're preparing a special Guide to Facebook Deals for marketers and merchants -- email us editor@marketingweek.co.nz if you're interested, that'll encourage us to get the guide completed more quickly].

Secondly, Google has begun the global rollout of its Google Offers product, already operational in Portland, Oregon, only 99.99 percent of the rest of the world to go. The beta version of this product is very me-too, not much to differentiate it for the other group buying sites. But Google's been known to learn rather quickly, so we'd expect some significant enhancements by the time it hits our shores.

Good Behaviour

We've previously dispensed advice on what marketers should consider before committing themselves to one of these group deals. Now we'd like to encourage local operators to consider and sign up to a Code of Conduct not unlike that recently drafted for the industry in Australia by leading players Cudo and Spreets.

The draft Code of Conduct is as follows:

Our commitment to members is to:

1. Always offer you great deals – genuine discounts on quality products and services from first class merchants

2. Never engage in misleading advertising, such as advertising specific discounts or products that don’t actually exist (known as ‘Bait and Switch’)

3. Make our deal descriptions and terms & conditions clear using plain English so you know what to expect in return for your voucher. Where exclusions exist, they will be equally clear using plain English and will never be intentionally misleading

4. Make our website terms and conditions clear and in plain English so you know what to expect from your experience with our sites

5. Respect your privacy at all times and abide by the Privacy Policy you agreed to when you joined the site

6. Respect your email account at all times, taking measures to protect it from hacking or other fraudulent use

7. Work with our merchants to make sure you can easily redeem your voucher and that you are treated as good as or even better than a typical full paying customer

8. Provide responsive and helpful customer support and service – seeking to fully understand and resolve your issues

9. If you’re not fully satisfied with your experience, we’ll seek to understand why, address the issues and, if your issue cannot be resolved, provide you with a full refund or credit

10. Do what we say we’re going to do, every time

Our commitment to merchants is to:


  1. Work with you and your team to make your group buying promotion as successful as possible

  2. Help you package and price the right deal for your business

  3. Help you prepare for the increase in customers

  4. Help you manage the increase in demand including capping your offer as necessary

  5. Help you maximise your up-sell opportunity to enhance the experience of new customers at your business

  6. Help you get customers coming back

  7. Provide you with clear payment terms

  8. Provide fast, effective, personal customer service through a dedicated account management model

  9. Do what we say we’re going to do, every time



Not bad for a first draft (although the merchant promises are a tad too promotional for our tastes). Still, heading in the right direction.

Seen In Passing

Google has launched +1, its answer to Facebook's "Like" button. The thinking is that +1 will facilitate social sharing. Perhaps it might, but we unlike the name.

Across the ditch, media buying agencies and TV networks are close to reaching agreement on automated trading programmes that will make it easier to buy TV advertising. Traditional methods are having a hard time coping with the spot volumes (multiplied by the launch of new digital channels over there). Implementation is still a couple of years out, but watch this space.

A majority of Facebook users in the UK now visit the social network using both mobile phones and computers, the company has revealed. And Facebook is also responsible for 50 percent of the time consumers spend surfing the web via cellphones. New Zealand telcos, time to unshackle those mobile pricing plans and get with the programme ....

The Damage Advertising Can Do

This little tale demonstrates how advertising can shape an image - and sometimes send the wrong messages to consumers.

In Oregon, the Tourism Commission set out some years ago to "brand" the state to create an awareness that Oregon means a special quality of life where nature and the built environment co-exist; where "fresh" and "clean" permeate the food products and natural environment; where culture is alive and their heritage is showcased.

The Tourism Commission created campaigns designed to communicate this broad message, and invited other government agencies and the private sector to join in under the "Brand Oregon" umbrella. They created a slogan, "Oregon. Things Look Different Here" to express a special sense of place.

While the Tourism Commission created award-winning, "stand-out" ads that focused on Oregon's quality of life, they really didn't have a handle on how well their brand marketing efforts were working. Research was always a component of the planned tourism programme, but budget limitations resulted in only very general focus groups (both with travel professionals and consumers), visitor profile, and ad conversion data. This is a typically short-sighted situation with any advertising campaign: let's rely on gut instinct to see if this works, because we spent all the research budget already.

Eventually the Tourism Commission made a commitment to analyse their marketing efforts, and contracted a three-tiered research programme:


  • An overnight visitor profile

  • An advertising effectiveness study

  • And an image study


A key component of this research was to compare Oregon's image and product to U.S. regional and national norms.

While the Commission determined that their tourism advertising was indeed effective, generating 402,000 new trips at a cost of $1.22 per trip, they also found that Oregon's image is not as strong as Washington, British Columbia and California. They learned that Oregon doesn't stack up to their West Coast neighbours in terms of excitement, unique opportunities, and being entertaining. When they looked critically at their ads and messages, they indeed found that they all reinforced a pristine, beautiful environment, but one that offered little in terms of things to do.

Interestingly, they also discovered that people who had been to Oregon rated their experiences extremely highly, and that Oregon's actual tourism product is rated much higher than its image for those who have visited. In other words, Oregon's advertising-created image doesn't live up to the product.

As far as dilemmas go, perhaps this was a good one, as it required a communication solution, not a major infrastructure shift. Armed with this new data, the Tourism Commission has moved to build Oregon's image in categories such as excitement, having cultural amenities and being a real adventure.

The first thing they did was to change their ad campaign to focus on "capturing the moment" and showing people having fun. Yes, Oregon is beautiful, and yes, the ads are still cutting edge, but they now communicate that there are things to do in Oregon.

Additionally, the Tourism Commission began building partnerships with cultural organisations and destinations in order to launch a cultural tourism campaign, with public relations and other marketing elements. Oregon has high-end resorts, world-class golf, fantastic regional cuisine, award-winning wines, 62 districts on the National Register of Historic Places, nearly 500 museums and art galleries, nine native tribes, and four National Historic Trails. All of these cultural amenities are backdropped by the incredible scenery and geographic diversity. The new challenge was to package Oregon's culture with this beauty.

The investment in research has demonstrated the importance of crafting a message that communicates what life in Oregon really is, not solely natural beauty. A useful lesson.


 

 

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