March 8, 2010

What bacon and voodoo can teach us about differentiation

This week I received a note from Youngme Moon, one of my former business school professors, that she’s about to launch a new book entitled “Different: Escaping the Competitive Herd.” The creative trailer for the book cleverly illustrates the challenge of differentiating in a crowded field of “me too!” yet reminded me of a business school case in lacking even the slightest glimpse into the solution. So, while I wait in anticipation of a good read on the April 6th release date, here are two inspiring companies who definitely chose to go left when others turned right:

The Eponymous Donut from Voodoo Donut in Portland, Oregon

The Voodoo Donut from Voo Doo Donuts in Portland, Oregon

Two businesses crossed my path this week that are valiantly unafraid to specialize. Incidentally both were started by pairs of friends, but that’s material for another article. The first, Voodoo Doughnuts of Portland, Oregon specializes in off-beat, dare I say eccentric varieties of the beloved pastry that would positively scandalize Dunkin’ Donuts. Case in point: their signature Voodoo variety is a person-shaped doughnut frosted with eyes and a smile and filled with raspberry jelly. Included with each purchase- a pretzel rod “pin” to stab the doughnut, which oozes red jelly filling. The business has been featured in the New York Times, Fast Company, and enjoys a passionate following at its two Portland locations.

JD's Bacon Salt. It comes in three varieties.

The second company, JD foods, specializes in bacon condiments. The past few years have given rise to an unprecedented passion for bacon. First, a sleeper blog of things wrapped in bacon became a runaway success, with the arterial-clogging “Bacon Explosion”. Soon bacon appeared on menus across the country as tempura, icecream, and even vodka. It was suddenly socially acceptable to profess one’s love of the fatty yet delicious meat amidst crowds that eschewed carbs and even meat. In the midst of the rising bacon tide (hmmm, perhaps not the best visual) friends Justin and Dave invented bacon salt and bacon-naise with the catchy tagline “everything should taste like bacon.” With product additions like “Baco-Pop” popcorn and bacon-flavored ranch dressing, even vegetarians are singing J&D’s praises.

Both of these examples support the premise that there’s no such thing as “a little different” for small companies that want to capture consumers attention. Would J&Ds have 4,212 Twitter followers if they were a spice company that happened to also sell bacon salt? Would VooDoo have gained the same volume of press attention if it offered an unusual doughnut once or twice a year? By embracing their specialties these companies have earned a place in the heart of consumers, and differentiated themselves from their much larger competitors. Tell me, which companies do you admire for “going left when others go right?” Hit comment below.


February 26, 2010

Online Video: The Tipping Point Was Yesterday

This February ComScore released results for online video viewing that indicated 86% of the US online audience viewed videos online in December 2009, up 19% from the prior year. Compare the 178M online viewers to approximately 290M people who watched television in the 2009 season (Nielsen), and the growth is striking. Viewership has grown significantly, as has volume. According to comScore, the online viewer watched an average of 187 videos. So why haven’t brands and broadcasters rushed in?

The industry is hung up in a bit of a chicken and egg dilemma.
Broadcast and cable networks have loads of premium content, but don’t want to cannibalize the television audiences that drive their advertising revenue. Bandwith is expensive, and networks have yet to monetize their online content on a scale that could replace television revenue.

Egg: Large advertisers aren’t yet funneling massive ad buys into online video, because they can’t secure the reach that television provides, and the CPM rates are much higher than their television GRPs. To increase reach, historically advertisers have had to purchase space beyond YouTube and Hulu through networks, which haven’t guaranteed the contextual relevance or quality that television provides. Television equals a safe bet.

Analytics and measurement will move the industry beyond this impasse. A 2008 study by Doubleclick/Google clearly illustrated that video advertisements were significantly more effective than other forms of online media in driving brand favorability and purchase intent. An IAB case study found that online video was equally as effective as television in moving brand metrics. As a marketer, why would I have to dig for these results? Why aren’t there more case studies? Several video platforms offer advanced analytical tools to measure the effectiveness of campaigns- Omniture, TubeMogul, Visible Technologies. Someone brilliant will measure and share these results (both online engagement and offline brand metrics) broadly, and marketers will feel more comfortable with increasingly large spends on video. Larger spends will help drive more premium content.

A variety of monetization options can help fund more high-caliber content. Pre-roll, in-stream, and overlay ads are abundant. Subscription models like Netflix, pay-per-view, product placement, and Hulu’s choice-driven sponsorship are still in their nascency. (Thank you, H&R Block, for allowing me to choose pre-roll and skip in-stream ads throughout my favorite show.) Technology will enable more ways to syndicate and monetize, funding better content.

Potential sweet spots? If you’re a brand with a highly specific and elusive target audience, the targeting capabilities of online video should appeal to you. Smart brands of all sizes are using the latest tracking and analytics to uncover which creative is most engaging, and where audiences are falling off, with a depth of insight simply not offered by television. If you produce professional-looking video content for an attractive vertical or audience, ( and Plum TV come to mind) now is an attractive time to monetize while larger networks and studios gain internal alignment and technology.

February 5, 2010

Augmented Reality and the Selling Cycle: Samsung Series 7 LCD

Filed under: Uncategorized — aimee @ 12:39 pm
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This week imediaconnection featured the 4 most interesting augmented reality apps. All evoked “neat!” but one is remarkable because it addresses a real consumer barrier in the selling cycle, and should ultimately drive sales.

Ever wandered the LCD aisle wondering “how large a TV do I really need?” and “will this really fit?” To launch the Samsung series 7 LCD TV, Samsung developed an application that allows consumers to visualize the television in the room they plan to place it. Here’s the video on how it works:

Unfortunately, I’ve been unable to find the actual application on the Samsung website or through search! Any information on the developer and location would be greatly appreciated. What do you think the most useful uses of AR are?

September 25, 2009

Viral Loops: From Tupperware to Ning and Beyond

In early October Adam Penenberg’s new book will be released Viral Loop: From Facebook to Twitter How Today’s Smartest Businesses Growth Themselves. While I’m a bit envious that he’s published a book on a topic that has been the subject of so many of my conversations with entrepreneurs in the past year, he first covered the topic in April 2008 for Fast Company in an astute article on the growth of Ning.

While I haven’t read an early preview of the book, here’s why I’m excited. In my conversations with CEOs of companies that sell both virtual and physical products, tough times have created a very basic need to get close to their customers, to develop exceptional products that deliver true value, so consumers are willing to part with their declining discretionary income. The exuberance of astronomical valuations is gone, and leaders are more likely to be out in the field building business rather than in the corner office. Build a fantastic product that delights someone, and that person is likely to recommend it to a friend. What is viral, fundamentally? It is something that is passed along, exponentially, so that one person tells two people, who each tell two more, etc. It’s a process as old as fire itself, elegantly accelerated by the internet.

As Marc Andreesen states in Fast Company’s feature on Ning, “a viral loop is something that incorporates virality into the function of the product.” If you haven’t heard of Ning, the most familiar illustrative example today is Facebook, where the product only has value if you invite others to join you, then those who have joined from your invitation create their own networks by inviting more of their friends. A virtuous cycle of growth. Tupperware and Avon are examples in the physical world, where one purchases the products from a friend or acquaintance at an event, yet also has the opportunity to become a rep and sell the items to their own networks.

What’s missing from this discussion of viral loops? While most discussion to date has focused on the growth mechanism of these networks, few have articulated the benefits consumers receive from being part of them. The Tupperware parties of the 60’s and 70’s weren’t just about creating financial independence among housewives, the events built and supported social relationships and connection, and fostered esteem as reps were engaged in new work. All of these psychological benefits are components of happiness and well-being, according to icons like Maslow and respected psychologist Diener. Suddenly passing along Smirnoff’s Tea Party video doesn’t seem so trivial.

How can companies that create physical goods, such as beverages or books, capitalize on the virtuous circle know as viral loops? While I don’t have all the answers, I’ll suggest it’s not just about the utility and connection between a consumer and a product, but the psychological benefits and rewards in sharing insight, expertise, and being connected within their social circle. While a bottle of Bailey’s doesn’t come with a “pass along” button, enabling a night of Bailey’s tasting parties in homes with new cocktail recipes creates an opportunity for connection, sharing, and memories among friends.

What do you think of viral loops?

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