Relative Dimensions

Waves and particles as consumer insight

2011-05-30T20:18:00.000-07:00

Consumer waves and particles.

Just read something over at ConversationAgent.com about brand loyalty and incentive programs. This caused me to think about how we derive our notions about brand loyalty. First read their article here -

http://www.conversationagent.com/2011/05/parity-brand-and-customer-programs.html#comment-6a00d8341c03bb53ef014e88c90699970d

An analogy of the consumer brand loyalty phenomenon can be drawn from quantum physics. The data we use to confirm our view of brand loyalty is all information from a distance. Purchase history, repeat business, loyalty card use etc.

From this we derive, what could be called, the Wave Form of aggregate brand loyalty behavior. This Wave Form is self sustaining because of the distance between the consumer and the marketer. This distance may safely ignore the effects of indirect forces. The method of data collection tend to throw out or diminish variance.

The problem with the Wave Form in marketing is similar to the problem in physics - as soon as we observe the subject directly, the Wave collapses into a particle. In our case the particle is the individual consumer. The individual user distroys the coherent wave and becomes undefined. The trouble is, with today's tools we are able, with more accuracy, to observe the individual user.

The information that defines each user will always be a smaller set than the Wave because it is a subset of the Wave. Any large marketing organization that functions with a mass market approach will react to this subset in the same way - it will be ignored. The argument for this seems quite logical, the greater effort and resource must be put toward the largest average proportion of users.

However, the greater portion of users, The Wave, are composed from the individual customers. The Wave is a fiction, the individual users are the facts. As much as the phrase "multi-channel" is used in modern marketing, its meaning almost never takes into account the multiple channels of users.

The other fifty percent.

2011-05-28T13:35:00.000-07:00

The other 50%

A trend in technology introductions to business is the focus on the enabled minority while ignoring the rest. this is true in so many fields - new is more fun than old. The thought is that start-up and innovation, may only make profit from new markets.

A few years ago, in an attempt to get vendor produced product photography, I called a well known denim jeans manufacturer. The manufacturer had made a marketing decision to only shoot the new "low rise" products and not the "mommy jeans". There was no photography to be had for my core product offering, the "mommy jeans" shopper. This ignored that the mommy crowd is the majority of the market.

Attempting to appeal to the new market is perfectly understandable. This denim jean company felt that they were loosing the youth crowd, and the dreaded demographic numbers, supported this. The company wanted edgier, younger, sexier. The trouble with this, only becomes apparent when we leave everyone else out.

Marketing has evolved a comfortable system of single focused strategies that have become a series of swapping elements devoid of creativity. We could as easily hand out a template:

Seasonal branding template.
Hook: super low rise jeans are sexy.
Supporting tag line: "how low will you go?"
Harmless top 40 music track from 10 years ago = fill in blank.
Two color swatch branding combo: denim, white
Photo style guide: midriff, midriff, midriff, oiled midriff.
Strategic seasonal direction: newness! Hipness!

This may be an easy prescription to fill for the team, but a bit tired in a multi-channel world. you have attempted to appeal to a new crowd with an old formula, while serving the base nothing.

The result was the loss of market share with the base. The "mom jeans" crowd ran away from a product that they felt would be unflattering. The youth crowd could find hip (seriously? Ten year old top 40?) and sexy elsewhere and with more exclusivity.

The same phenomenon is seen in most new technology proposals. The developers, business people and analysts engage a tunnel vision for their product. A solution is designed for a subset, and the hope is that everyone will adopt because, in the developers opinion, the new way is better than the old.

Mobile people tell me that 50% cel phone owners will have the type of phone that is capable of running a given app that will make the customer experience better. Of course this assumes the customer knows about it. And that they download it. Then, use it properly. This is now a subset, of a subset, of a subset of half the users. At best.

In the same pitch, the potential technology partners, will be shocked if you ask about the other 50% customers. How will this mobile idea work for my customers who don't have or don't wish to use a mobile device. How will they access this content? How do we serve their needs?

Considering the other group is the obvious difference between a good idea and a great one. Yes, your new device can push to mobile - but now show me that it can push to fixtures, associate devices, customer loyalty devices etc. The idea that the have-nots will adopt because they are missing out, only works when the content is compelling or the use is advantageous.

Pulling out my cel phone to pay is the same as pulling out my wallet. Receiving loyalty via the same method, coupons etc., would still go into my physical wallet as well as my virtual one. I would point out that the tangible one may even have a psychological advantage.

If we are going to claim a cross channel world and devise cross channel strategies, we can not ignore channels that are inconvenient to our perceptions. Your customers deserve your innovative thinking in every channel.

Leveling the playing field

2010-10-27T10:45:00.000-07:00

I do love Alvin Toffler’s notion of demassification even if the spell check on my Mac hates it. Oversimplifying it by quite a bit I could describe it as the post industrial revolution direction of the western world toward non-linear, intercommunicated individualism. This direction’s impact is far from fully realized and as with any time of serious change, it is we who are in the middle of it that have the hardest time seeing it.

The industrial revolution, by the requirements of its nature, was a massing of assets. People, technology, transportation, money, government all had to physically come together to drive the engines of the revolution. Because of this massing of assets a culture that reflected the revolution’s form grew up around it and with that a mindset of doing things industrially. Every institution followed the factory model. The world revolved around the punch clock. All processes look like assembly lines.

The mindset of the industrial revolution is proving harder to break than the revolution itself. For this reason the biggest institutions of our time have been surprised at their sudden demise. The major television networks, music industry, marketing giants are the most high profile, but many into this shocked group. The consumer simply has more choices in every aspect of their world. With the growth of the web the ability to realize individual choice has been realized. Interestingly, the web in an enabler not the cause since real demassification started in the 1950’s – move to the suburbs anyone?

What does this have to do with Retail?

Department stores are a product of the industrial revolution. In order to have a department store, let alone a chain, several products of the industrial revolution must be in place. Massive, city sized infrastructure, transportation, monetary systems, workforce, etc. to support the business. You must also have a captive population. I say captive because the cornerstone of the massive institution is the captive client. Once open choice enters the equation the massive institution begins to erode if it cannot adapt. Consider the shopping mall as an adaptation of the demassing of the population.

But competition, before the web, was a fight among giants for consumer dollars. Small or single store retailers posed no threat to organized retail. Even in boardrooms today you will only hear analysis of what Macy’s, Penney’s or Target is doing. What is not discussed is the real, up coming threat - The micro retailer.

What needs to be understood is that important difference between traditional retail and new retail is the off-line, physical tradition. The current core of consumers understand the mall and the department store, as destinations to acquire the mass produced goods they need. However, as the shift in comfort toward e-commerce continues younger shoppers will lose the ability to discern the difference between massive and small retailers.

I have mentioned in previous posts that the individual retailer is far better equipped to discuss and market a small product assortment in a better way than a big one does. What the big guys are missing is that 100 million dollar marketing programs, which rely on the massive marketing infrastructures that are fading, are now competing with nearly free marketing and that the real gap is not dollars but time.

The OPEN Small Business Monitor Survey results indicate that small businesses are increasingly relying on social media, with 4 in 10 business owners using social platforms. One year back, only 1 out of 10 business owners was practicing social media. As expected, Twitter, Facebook and LinkedIn are the most popular social media tools amongst the small business fraternity.

Douglas Idugboe, Read more here.

As the small retailers embrace the same social media that now nearly half of the US population already has, the intercommunication between these small businesses, customers and extended relationships will multiply. In the online world all media has an equal potential and all of it consumes time at the expense of its competition. The day is quickly coming when most of my non-food purchases arrive via post and all boxes in the mail look alike. When the future shopper comes along, the one who has no allegiances to brick and mortar traditions, those mass institution will need an answer to what makes them a better choice.

Small and personalized

2010-10-07T09:27:00.000-07:00

I downloaded an app today featuring the work of Canadian designer Dace Moore. Available for iPad and iPhone it is a well-made but very simple presentation of the designers work. Romantic photography and video highlight the designer’s fashions and each style has easy links for social sharing, list making and buying. Retail is handled through the web site and the transition between web site and app is smooth.

So it’s a nice fashion website, what is the big deal. I feel this kind of retail gets at the notion of personalization in a very different form. To be sure, individual designers have proffered their work online for a few years now but the level of sophistication has improved dramatically. Dace does a better job of branding than a big retailer ever could because she is able to articulate a singular perspective. The design sense here may only appeal to a relatively narrow segment but that group has high loyalty.

Big retail looks at personalization as the data we have about narrow segments of our population to serve targeted information. If you only buy men’s clothing we will not send you marketing for our children’s sale. See, we know what you like. In the marketing group we all congratulate ourselves on the granularity of our targeting but is it really personal? I was standing at the copy machine recently, when a friend pointed out that both of our shirts were the same. This isn’t an issue for me but when I consider it in the context of the growing movement toward individualization… it feels wrong.
The obvious pushback has many reasonable arguments- big retail must serve millions of shoppers that transact billions of dollars. We must manage hundreds of thousands of pieces of merchandise with offers and messaging on an immense scale. Our reach is on a National scale and single designer’s little site cannot compare to what we do.

While all of that is true I have to ask who really needs it? Big retail hitting the broad target does not address the individual preference in product and that was fine when there were no other choices. Now there are more choices. The corduroy from the Big Box retailer is OK but the ones from Peterman.com are perfect. While you can argue that specialty shops have been around forever the real access to them has not, the difference in that access is indistinguishable in our new world.

The old model has been “from the few to the masses” but I think the masses maybe taking back that control. Can any large company adopt, even on a small scale, personal focus?

The changing acceptance.

2010-09-30T10:40:00.000-07:00

We are in an age of high definition. Televisions, blu-ray discs even our telephones tout high resolution. Simultaneously, the proliferation of amateur created web photos and video have created a curious dichotomy –Less than perfect content on your high definition screen is perfectly acceptable depending on what it is. In fact certain kinds of content can lose genuineness when it is of too good a quality. This is what is meant by the realignment in expectations of content.

Professional content creators have a quality control knob for their work. This knob is designed on a scale from 1 to 10 with 10 being the only acceptable setting. If a video or photo cannot be perfect then it should not be done at all. From a retail point of view this means that if we cannot have the perfect video of our product than we should not have a video at all. There are two important problems with this. The first is that you are not serving the product, as it needs to be represented. The second is that while the higher the quality of any produced content is generally a good thing, there is a point of diminished return. In the information age, inadequate representation is unacceptable.

If you spend enough time on YouTube or if you search specifically for retail brands, you will find videos for just about any product. The majority of these videos are by amateur fans the brands. Many times these videos are created to fulfill the needs of the brand advocate for recognition but they also tend to be about brand information that is unobtainable by any other source. This underlines a lack of the product producers, sellers and marketers to address the basic needs of the customer. A great deal of the most important content about products cannot be found on the brands site or the retailers product page because of the perception of what that content should be like.

The customer shouts – “Make me video to show me how this thing works before I buy it!” We shout back “No! The lightings bad and we can’t afford a professional model!”
Let’s hope that since we as a business, cannot overcome our own restrictions that our customer will do it for us and post it on YouTube.

The open ideas market will respond to meet the needs of the modern content creators. As the big production habits of media creation outlets hold on tighter (and expensively) to digital rights, the market and individual content creators will respond with alternatives. Large organizations will be the slowest to realize this. The attitudes of traditional content creation and distribution by both corporate user and traditional content developer will only begin to erode once smaller, more nimble providers begin to undercut them.

This is happening now with companies like friendlymusic.com. In the battle of music content ownership the music industry set itself at odds with its own customer instead of finding a new way of doing business. Take for instance the use of music with home made video on YouTube. Copyright owners demanded the removal of their music from home made videos with threats of lawsuits. In step companies like Friendlymusic, where for as little as two dollars, licenses of any kind of music from musicians around the world, can be legally obtained.

This is almost a retelling of the ASCAP vs. BMI battle of the 1940’s and the results will be similar. ASCAP (American Society of Composers, Authors and Publishers) was the organization that controlled music publishing and distribution in the US. They began to use their monopolistic position to charge high rates to their Radio subscribers. Radio, in 1930, was a new way to distribute content and many legal battles arose about the ownership of that content. Sound familiar? When ASCAP, over the course of nine years, raised the rates nearly 500%, broadcasters rebelled. The broadcasters formed a new group called Broadcast Music, Inc. in 1939. BMI went to alternative content creators, created new performances of public domain music and offered cheaper services to broadcasters with far fewer restrictions. By responding to the new market BMI crushed ASCAP’s strangle hold of the media within two years – and ASCAP had the superior product!

Machine methods of content creation

2010-09-28T11:51:00.000-07:00

For the sake of clarity, the use of the word “Machine” needs to be defined. Indeed, using some sort of machine – the digital video or still camera, the word processor etc, is the way in which we make most content today. When I use “Machine” here I refer to the process of content creation that removes a significant portion of human intervention in the process of production.

At the professional level, the use of electronic devices to produce content has not changed, fundamentally, in decades though many of the devices have. A digital camera, in the hands of a professional photographer, is used in much the same way as it was in 1970. The difference is cost, time and efficiency – the processing of film and the immediacy of preview has made the process more efficient but not really different. If our photographer from 1970 got his hands on a modern digital SLR, he would be right at home – interchangeable lenses, aperture and shutter control, light metering, TTL view etc. This is quite interesting when you consider how fundamentally different the two technologies are.

The reason for the similarity in the devices – the traditional SLR vs. The Digital SLR- has more to do with the users that it does the technology. If the Digital SLR were wildly different from film cameras professionals would have been slow to adopt. We see this in many introduced technologies where the early versions of the devices follow familiar antecedents.

Now that DSLR technology is in wide acceptance, we are beginning to see the evolution of digital capture devices. New cameras will record Geo locations of photos, META data will be more precise and expansive, in camera editing and color profiles will be more powerful, wireless transfer to cloud storage will make image handling seamless and the line between video capture and still will vanish. Eventually even multi lenses will disappear.

As we accept the differences that new technology brings to the devices we use, we must also acknowledge new industrial methods for producing content. To avoid the prohibitively high cost of content creation and the growing expectation users have of rich content experiences we must be prepared to experiment with Machine based methods like TalkMarket. The key here is to understand the realignment of expectations of certain kinds of content. This brings us back to the changing acceptance of the user.

Classical content creation systems are appropriate for the Class A presentation of products, but below that level this approach to production simply hinders the requirements we have today.

The traditional content acquisition model is not going away for the near future, but like so many other institutions it is, to a degree, diminished. Licensed, polished media will have to stand side by side with free, open source prosumer content and Machine produced content. Businesses who have to exploit massive amounts of content must adjust quickly to the new models.

Utility vs. Esthetic

The first, and possibly most difficult, task we must accomplish is to abandon our outdated notions of content and its purpose. All photos are not marketing. Marketing communication is not unidirectional, consumers do not just consume, videos are not television, content is a means to an end – not the end.

Photography in our business plays many roles and the most prominent of those roles has been to support our products and our brand. To that end we have engaged in the constant increase in the visual quality of our photography. This has resulted in helping Kohl’s achieve a higher place in brand prominence than discounters and other low-end stores. The parallel to this was a massive infrastructure investment to accommodate the growing demand of photography in the print explosion of the late 1980’s and 90’s.

When all visual content is viewed through a traditional marketing point of view, then the perfection of that content becomes paramount. If it cannot be perfect, then we will not do it. Unfortunately, that statement falls apart when visual content is viewed from an information transfer view.

Bluntly this: The customer will always favor the path of ease, clarity and efficiency. A short, medium quality video of a backpack being opened, exposed and a laptop slid inside with a voice telling us that it is water proof and padded is more powerful than a high resolution photo that tells me none of those.

Brand advocates exist for every successful brand. The voice of the individual user will be exploited more and more to support the brand. The quality and clarity of the voice (video tools, high speed internet, social publishing) is growing exponentially.

Obsolete marketers will continue to push glossy production over user-generated content as “non aspiration”, however, at the consumption level, socially shared advocacy is vastly more powerful. The challenge will be how to support such advocacy without advocate becoming more glossy sell-outs.

To apply computing metaphors to this situation we would say that the world we lived in, up until 10 years ago, was a “Read Only” content world. We produced content, in this case photography, for the consumer to experience. The last decade has introduced the “Read/Write” content world. We still create content to disseminate to our customers but our customers also create content and publish it sometimes about us and the content our customers create can have equal reach in the online world. We have to become better readers of content and republish that which supports our goals.

The content creation model is dead; long live the new content creation model. We have, perhaps, become so engrossed in our methods of content acquisition and creation that we have forgotten the goal. We may have to let some of our precious ownership go if our goal is to spread our word. George Lucas realized that allowing his public to freely engage in his copyrighted material he could turn movies into an intergenerational phenomenon.

We must embrace that the prosumer has introduced a new spectrum content requirements, expectations and rules of engagement. They understand it and own it. In retail we say that the customer is always right, it is time for us live up to that.

Gary P Hayes' Social Media Count

2010-09-27T12:18:00.000-07:00

For those who have not come into contact with this, I am imbedding Gary Hayes' Social Media Counter.
This is a great visualization and I think it makes clear the rise of Social Media. I also think people like Hayes are always a wealth of information so checkout more here.

People creating content

2010-09-24T15:32:00.000-07:00

Up until the last decade there has been one general model of content creation and distribution. Business paid to create the content and paid again to have it distributed to the masses. The masses consume the content and bought products.

The first decade of the 21^st century has changed several things to challenge that model.

1) The “Democratization” of publishing via digital means.

2) Advanced and cheap technology.

3) Realigned expectations of content.

The New Model is that most any online user, be they a business or individual can create content at any level of cost, publish that content in numerous ways and have it viewed, on a potentially equal footing, with any other content.

Because the large businesses and professional content systems maintain the old model it is only them that suffer limited freedom in the information economy. The masses take full advantage of every tool at their disposal to publish themselves. What is critical is the simple dissemination of the message – it is the “what” not the “how”. By playing by the old model business often sacrifice the “what” because the “how” is unworkable, expensive or too time consuming.

When you build cooperation into the infrastructure, which is the Flickr answer, you can leave the people where they are and you take the problem to the individuals rather than moving the individuals to the problem. You arrange the coordination in the group, and by doing that you get the same outcome without the institutional difficulties. You lose the institutional imperative. You lose the right to shape people's work when it's volunteer effort, but you also shed the institutional cost, which gives you greater flexibility.

-Clay Shirky, TED

Lets look at two competing E-commerce organizations. Today we are going to sell decorative tee shirts. We will pit Massive E-tailer vs. Girl in School. Both want to sell tee shirts, both want them nicely modeled and both want them online as quickly as possible to respond to a trend.

Massive Etailer will require an official female model, a professional photographer, studio time, and support personnel for the shoot, an art director and a minimum of 30 days to prepare. Then there will be a web writer and other management processes before it can go live.

Girl in School puts her tee shirt on, stands in front of her web cam, and talks about her product. She uploads her video to YouTube and links that to her eBay and Etsy accounts. She will also show her video on her FaceBook page and tweet availability.

Girl in School’s overhead is much lower, of course, her speed to market is dramatically faster and she has video vs. Massive Retailer’s still photos. By using YouTube, FaceBook and Twitter (all aggregately indexed by Google) and her 30 day head start her natural search is, at least initially, higher than Massive Retailer’s for this type item. In a time sensitive market, this is critical.

An advantage, in the long run, will still go to the Massive Retailer due to overall Brand recognition and historical relationships but those advantages will even out as social media and content provider sites become the perceived “Parent” brand and the prosumers become the distributors of goods. We need look no further than the Amazon model.

The real power here is in combining the two. Established businesses are making hesitant steps in this direction but more needs to happen. Interestingly, smaller businesses grasp this easily. As an example I would use Uniqlo, a Japanese apparel retailer, and their brilliant model of content creation via public invitation. In the example they installed a low cost camera outside one of their store dressing rooms. They then invited anyone who tried on a tee shirt to photograph himself or herself. These photos became the product images.

Hundreds of photos capturing youth, diversity, comedy, variety, coolness, and fun!

An example here in the United States is the new Dominos Pizza Campaign.

Domino’s Pizza marketing campaign seeks to deny the use of professional, portrayed as “fake”, photography that are an established norm in modern marketing. Customers are invited to photograph the pizzas and submit those photos for representational use of the products by Domino’s. “Our pizzas are so good, we don’t need special photography”. This is brilliant and relevant marketing – it uplifts the product, invites the prosumer’s psychological partnership, produces an enormous amount of content which the company can exploit at no cost and elevates the brands genuineness.

In the Domino’s example the marketing Campaign is entirely conceptual – the content is provided by the paying customer.

The growth of Internet led technology has caused, and will continue, the evolution of established institutions. This evolution impacted obvious areas – news media, print and traditional television-are seeing almost over night change. The new content creation tools

“History records endless examples of “revolutions” that replaced old technologies and even governments without significantly altering society itself and the people in it. By contrast, real revolutions replace institutions as well as technologies. And they do more: They break down and reorganize what social psychologists call the role structure of society. … But anyone who underestimates the revolutionary character of today’s changes is living an illusion.”

-Alvin Toffler, Revolutionary Wealth

What has not been so obvious to large business is the growing erosion of high-end production content by low to medium quality content producers. All content creation has become cheap, disposable and fast, done by anyone from amateurs to skilled producers in direct competition to high-end productions.

Once anything is delivered on-line it can never be truly owned again. Our marketing should be designed with the intent, indeed hope, that it be reconfigured, redistributed and recombined. The 20^th century was dominated by the “read only” system of content delivery (entertainment, marketing etc.) and Americans could receive but not collaborate and create. The new age has given us the opportunity to collaborate again. This is a prismatic way of viewing personalization.

“ Here's the argument. In my view the most significant thing to recognize about what this Internet is doing, is its opportunity to revive the read-write culture ... User-generated content, spreading in businesses in extraordinarily valuable ways like these, celebrating amateur culture. By which I don't mean amateurish culture, I mean culture where people produce for the love of what they're doing and not for the money. I mean the culture that your kids are producing all the time. … Taking the songs of the day and the old songs and remixing them to make them something different. It's how they understand access to this culture.”

- Larry Lessig, TED speech

If the content is compelling the public will co-opt it and redistribute it for us. Take for example the Back to School 2008 work from Kohl’s.

While the relative success of the program might be questionable, consider the fact that the above audio mash-up on YouTube, happened two years after the initial television spot ran.

The informal model of content creation, provision, classification and distribution by users to the benefit of an institution is proved. Flikr, Wikipedia, eBay, Facebook, YouTube and many more are all, or nearly all, the aggregated content of its users. The institutions benefit from the content merely by providing easy, shareable, contextually relevant space for the clients.

The human desire to share combined with the global web and the plummeting cost of high quality equipment equal bad news for those hanging too rigidly to old content creation models. When we consider that the home equipment of many of our customers have capabilities beyond those of a professional television studio in 1995 the ability to communicate becomes unstoppable.

Ultimately, the passion of the community is for the quality of the work not, necessarily for the process we use to create it.

-Jimmy Wales, Founder of Wikipedia

There is an even broader view of content to consider in this model and that is the product itself. Amazon is mentioned above as a “Parent” brand for client sales. In most other retail we separate professional retail goods from private sale goods. The trend toward customization has begun to rebel, to a small extent, against mass manufacturing. People want access to true exclusivity as personal statement. What if a major retailer allowed parallel product offering of small quantities, even one-of-a-kinds through the same channel as mass production? Imagine the order – Vera Wang top, Apt. 9 pants and shoes matched with a one-off handbag. Get it all and get it unique at Kohl’s.

Everything old is new again ... sort of.

2010-09-23T08:57:00.000-07:00

If you are a student of very old television shows you will have noticed that advertising and sponsorship have changed quite a lot. In modern television shows, one will never hear the name of the sponsor in the title of the show. This is partly do to the fact that it is rare that a single sponsor would fund a show; but it also has to do with our sensibilities about the separation of marketing and entertainment. A common criticism you will read is that there are too obvious product placements in a show.

This was not always the case. In the 1950’s, 60’s and even into the 70’s, television dramas might include the title of the sponsor right along side that of the show. Series like “Maxwell House Coffee presents: Richard Diamond, Private Detective”, Nabisco with “Sky King”, “Lucky Strike’s Hit Parade” even the classic “Star Trek” had Cheer Laundry Detergent as a sponsor, complete with music and actor voices from the show. However, as production became more expensive, audiences more sophisticated and as anti-establishment sentiment grew, the direct connect between entertainment content and marketing separated.

In the 80’s and 90’s, product marketing became disconnected segments between acts. For network television, charging by the 15 and 30 second spot, this was a boon because the need to rely on any one sponsor vanished; and a three-way monopoly on viewer eyes ensured impressions for brand marketers.

By the late 90’s and into the 21^st century, the technology revolution exploded, and consumers of entertainment were beginning to see an array of choices beyond the networks. Now the commercial became easily avoidable obstacles on DVRs and more Americans began choosing rebroadcast shows over original airings. This meant even fewer marketing opportunities, as entertainment became “on-demand”.

In time, the plummeting value of traditional marketing and the competition of alternative content will quickly become an unsustainable model. For content creator and distributor embracing the changing consumer reality is essential. The initial pushback from traditional content providers will be the pay per view model. This will break down quickly due to alternate, free, choices and unmanageability and expense of payment systems. There has also been an attempt to control the content via “lockdown” where in the content is exclusively available through one channel. We are already seeing both models fail spectacularly.

The new, successful (at least as far as public reach) content distributors –Hulu, Netflix, networked game systems, etc, all have a better model for distribution of content. These new distributors understand the consumer market and “play anywhere” attitude. Is it any wonder that in the past 18 months Netflix availability has gone from physical mail distribution to online through browser, smart phone app, stand alone set top box, and direct inclusion into Xbox, Playstation, Wii, Network Blu-ray players and even new televisions from LG, Sony and Sharp?

Instant Gratification

… But it's not just curiosity about new titles that brings me back (to Netflix), it's also the instant gratification. Before, when I added a movie to my queue, I had to wait for the DVD to arrive in the mail—often resulting in a form of Netflix "queue-nesia" (the act of forgetting why I added, for example, The Bob Newhart Show, Season 1 months ago). Now if I find something I like in the streaming section (and that can be a big "if") I can watch it right away.

So as a Netflix user, I'm visiting the site more often, and while there, I'm spending more time browsing. Apparently I'm not alone. While the Netflix rep with whom I spoke wouldn't provide specifics, he did say the company had noticed an increase in the number of subscribers browsing through Netflix.com.

In addition to browsing, of course, users are staying put to watch content. Suddenly, Netflix.com is not just a stopover on your way to being entertained; it's a destination, a place where you'll spend hours at a time. And that opens up new doors for Netflix.

–Chris Albrecht, Bloomberg Businessweek

We also should acknowledge a strong social component that is growing around such providers. Ratings and reviews have evolved into social interactions and a club-like mentality. Entertainment lovers are spending more time in content provider locations.

Collaterally, with the shift in user entertainment acquisition from limited sources to very broad choice (we must acknowledge this as a demassification that Alvin Toffler describes), content consumers no longer see themselves bound to any provider. At the same time retail companies have built up impressive on-line infrastructures to support the same technologically enhanced consumer. While their representative marketers have attempted, and failed, to turn websites into television, most have missed the obvious. The physical infrastructure that is built does not define, specifically, what is to be offered for consumption. The huge on-line infrastructures capable of serving millions of clients are, by definition, broadcast systems.

If the customer is watching entertainment on-line and you wish to bring them to your on-line site, don’t push your ad next to the entertainment – bring the entertainment (and the viewer) to your site. There is no physical reason why a Hulu’s rebroadcast of a popular television series cannot happen within a functional commerce-social experience without leaving the provider site experience.

As with most things, the small business entrepreneurs hit on it first. It started with fan made films. With the plummeting cost of video production and equipment and the huge distribution network that is the internet, fans of entertainment began to make their own versions of their favorite shows. Super Hero videos of Batman, 30 minute episodes of Star Wars and Star Trek even parodies of shows all began to compete as legitimate entertainment.

After a few false steps, the copyright owners came to recognize that these “tributes” to their brands helped keep the work in the public eye. To punish these content makers would alienate the fans. The rules are simple – you may make fan films as long as you don’t sell the films that you make. The way that these budding film makers found to make money to keep making films was to sell everything around the film. Tees shirts, books, coffee mugs – you name it! – Featuring the characters of the fan film but carefully leaving out the copyrighted elements thus becoming the way to make profit from the content. Some fan sites even include a free “complementary copy” of the film with any purchase.

Quickly following the fans, professional content creators quickly realized that they no longer need to be restrained by old rules of distribution. The creative element takes the reigns if, for no other reason, to be heard. Open content has become more compelling (due to its lack of restrictions!) and it has begun to choke any earlier, rigid, systems.

As example Dr. Horrible’s Sing Along Blog, The movie was written by writer/director Joss Whedon, and his team. They wrote the musical during the WGA writers' strike. The idea was to create something small and inexpensive, yet professionally done, in a way that would circumvent the issues that were being protested during the strike. By doing this the professional creative force became the distributor of the content and has a greater share of the profit and control. On October 31, 2008, Time magazine named it #15 in Time's Top 50 Inventions of 2008.

Privately created entertainment distribution through semi controlled collaborations are growing. The number of privately created television shows that are shown through partnerships with narrow distribution systems are increasing in bounds. An example is “The Guild” television show which is seen exclusively through XBOX live (a pay service). The relationship is simple, XBOX Live requires a variety of fresh content to justify its pay service and the producers of “The Guild” want to reach a specific demographic. The relationship works.

Another recently announced partnership is between AOL and The Ellen DeGeneres Show.

AOL and the show’s website, Ellentv.com, will now share promotion, traffic, and content. For AOL, the deal helps the company leverage traffic from Ellen’s main demographic, women between the ages of 25-54. AOL will feature content from its network of sites on Ellentv.com. And sites in the the AOL Lifestyle and AOL Entertainment groups, such as KitchenDaily.com, AOL Television and Popeater, will carry Ellentv content and links. Telepictures Productions, the producer of show, will continue to host, maintain and program the site. Videos from the show that are featured on the site will now also be distributed across the AOL video network/ Telepictures and AOL also plan to collaborate on editorial programming and digital sales packages on special events, seasonal, and holiday opportunities.

Clearly, AOL is riding on Ellen’s brand to help boost its own content offerings amongst the female demographic. And as Oprah’s show ends next year, Ellen could become the #1 talk show amongst this demographic. AOL’s making a big push towards its content strategy, so I’m sure we can expect similar deals in the future.

Source, TechCrunch

What does this have to do with retail?

When Illeana Douglas, long active in independent film, wanted to make a show about a Hollywood actress who becomes a cog in a blue-collar wheel, she turned to the Web and to an unusual ally, Ikea.

She persuaded Ikea, the Swedish furniture maker, to be the sole sponsor of her Web video show, “Easy to Assemble,” in which she plays an employee. The most recent episodes, from October through February, drew more than 1.5 million views each month. At home late last month, getting ready for an awards festival where her show would be honored, Ms. Douglas was dressed in a yellow Ikea jumpsuit, mimicking her character.

“The brand is a co-worker in the story line,” she said, adding that Ikea does not actually make jumpsuits, so she made one herself.

- New York Times, August 2010

What we see here is a return to old school media and marketing partnerships with a twist. Now it is the creative media that is approaching the retailer and the outcome is a marketing vehicle.This is not, precisely, a return to the branded entertainment of old but it is a new acknowledgment of the relationship. The twist is about who is in control.

Why don't you blog, Troy?

2010-09-22T23:44:00.000-07:00

Good question. The obvious answer is that I have nothing to contribute. Goes a little deeper than that... Partly, the things I want most to talk about, I can't. not allowed. company secrets and all that. Another key feature is that I'm more in the old school that says - keep things to yourself.

I want to talk about innovation, usability and design. I want to share, just a little, about some of the creative future insights that pass my way.

And, I think this might help me organize my thoughts.