Friday, 10 August 2007

Is facebook really a Malcolm Gladwell experiment?

So Gladwell has this bit in his book the tipping point where he talking about how your circle of friends is probably more like a pyramid thanks to the personality types he calls "connectors". A connectors is that person who brings people together, the girl at the party who says "oh you have to come meet my friend...", I'm sure you know the person I am talking about. From a marketing point of view connectors also serve a integral purpose of evangelising your business to others always introducing people to your products and services. If you want a better explanation, chapter 2 of The Tipping Point can sort you out.

So Facebook has the "how did you meet" function that I find to be a pretty interesting read. For the most people are linked by "they went to school together" or "they met randomly" but every so often when looking down a list of someones friends you find the recuring message "they met though [mutual friend]". This mutial friend is a connector, the more times they appear in this field the better connector they are. As much as I hate marketers invading social networking sites trying to turn the thing into an Amway-esque sales loop, I can certainly see the value that can be gained by marketers speaking directly to these people.

So someday someone will find a way to view the people on facebook who top the charts in the "they met through [mutual friend]" and marketers will realise they can just focus on these individuals and stop wasting money pitching their brand message to someone that will tell no one.

Wednesday, 8 August 2007

Fragmentation and Advertising Value

So I listened to the Cameron Reilly interview with Geoffrey Bowll, Managing Director of Melbourne based ad agency Starship today. Excellent interview! Two intelligent guys, not afraid to call a spade a shovel. Definitely give it a listen. And thanks to Jake to bringing it to our attention :)
One thing Geoffrey Bowll was talking about in the podcast was, with the decline in TV audiences and increasing media and audience fragmentation, how this could be used by advertisers and marketers to their advantage.

Consider a simple (crude example). Suppose a clothing manufacturer has two choices to advertise their products;
TV ads and Podcast sponsorship.

TV ads: cost of ad airtime = $20,000 for 1,000,000 views or eyeballs.
So, disregarding notions of brand awareness and loyalty etc, for this ad to just break-even (at an industry standard 10% EBIT return on Sales) it would require $200,000 worth of sales. If we assumed each purchase for a person was approx. $50, that would be 4000 customers, from that one ad, that would need to be compelled to purchase the product to achieve an acceptable ROI on the advertising expense.
To break-even:
TV ad rate of return per set of eyeballs is $0.2 (each person who sees the ad needs to spend approx 20 cents on your product to break-even)
TV ad conversion rate needs to be 0.4%, which is the percent of people who saw the ad that need to buy the product to break-even, (given an average purchase price of $50 per person).

Podcast sponsorship: Now let’s consider the alternative. Suppose there was a podcast dedicated to fashion. This podcast has a modest audience of about 30,000 listeners. Rremember people who are listening to a fashion dedicated podcast are most likely fashion enthusiast, industry people and early adopters - a marketer’s wetdream.

Ok, so the audience is small but the cost of the sponsorship will be small also. Let’s say the cost of sponsorship is $1000 per podcast episode (this is an upper range estimate - the rate for most popular podcast is $25 per thousand listeners / downloader’s).
To break-even the podcast ad would need to generate $10,000 worth of sales. This gives us the following to break-even figures:
Podcast ad rate of return per set of eyeballs is $0.33
Podcast ad conversion rate needs to be 0.67%

If you are aiming to get 4 people out of every 1000 people who see your TV ad to purchase your product (with the likely TV audience a scattered demographic), getting 7 out of every 1000 people who hear you podcast ad, with an audience that you know is interested in a similar topic, likes to support the "free podcast” they are receiving and are generally early adopters, seems like a walk in the park.

My advice to anyone considering moving from traditional media advertising to new alternatives: Give it a try on a small scale. Build in tools and applications that enable you to track results. The small cost of new media makes it a small risk in which you can easily track the results.

And for those that think fragmentation and the shift from traditional media is not happening, check this article on Afterworld. Afterworld is the first television series to be made available on mobile phones and the web simultaneously, created by three-time Emmy-nominated producer Stan Rogow.

Big Kevin07

I plan on two posts today. That’s right, you heard me, two post on the same day. Value for money blog today. ...unprecedented on this blog.

1. Kevin07

I have mentioned before the ways that Australians are utilising new media and social networks for the upcoming federal election (in particular with Myspace Impact - see here). Now Kev (no Rudd anymore) has his own very web2.0'ie' site, Kevin07, that brings all his online efforts together.

It’s a nice little site, feels more like a fan site than a party site, and does a good job at showing the personal side of all this politicking. Check out some cool blogs that talk about it in a little more detail (and some would argue credible analysis than I have here :))

Social Media in Australian
Laurel Papworth

I will just say, with the leaked Liberal party pollster report, continuing poor polling results for Howard and the way that Kev's has been accepted in the media (both "mainstream" and alternative social media) - it seems to me that Kevin Rudd for PM has crossed, what Gladwell refers to as, the tipping point. The point of wide and default acceptance, where it seems that people have decided already that Kevin will be the next Prime Minister. This enables people to emotionally invest further with Kevin as the acceptance deepens and widens (oooh I just love it when marketing actually applies to the real world!)

Just In...Someone at work just pointed out to me that since Big Kev died last year, there has been a Kevin-void in society that is being filled by Mr. Rudd. How much time after Big Kevs death do we need to let pass before we can start calling Rudd "Big Kev

Monday, 6 August 2007

Cameron Reillys interview with Geoffrey Bowll.. definitely worth a listen

Every now and then one of the guys I work with questions me about my ability to sleep with my eyes open being that I can sit dead still at my desk not moving a muscle. Alas I am yet to master the art of open eyed sleep, more often than not my motionless existence is the result of me being captivated by a podcast. Today was one of those days as my full attention was focused on Cameron Reilly's interview with Geoffrey Bowll, Managing Director of Melbourne based ad agency Starship. I have read back though Bowll's articles in Marketing Magazine with great interest and been very impressed with his views on the marketing landscape, so getting a chance to listen to him speak was highly anticipated and I was not disapointed.

Having spent quite some time absorbing various marketing blogs and podcasts, I often wonder if the marketing gurus who produce such content actually believe all the bullshit they are spouting. I regularly find myself disheartened by the industry that seems to have such a high opinion of itself and this is why I found Bowll's interview so refreshing. He has a very down to earth approach to marketing, makes some very honest assessments of the industries future and seems to understand that marketers don't have all the answers. For this reason I highly recommend anyone who is vaugley interested in marketing to check out Cameron Rilley's interview with him.