September 2009 Archives

Marketing on Social Networks: Friends for Sale

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The Economist:

ONLINE social networks are handy not just as a means of wasting time but also as a communications tool for business. Dell, a computer-maker, has made $3m in sales from Twitter since it started "tweeting" about its outlet that sells refurbished computers in 2007. Marketers are eager to use fast-growing networks to tout their products. An Australian online-marketing company, uSocial, wants to help them--for a price. On September 16th the firm started selling Facebook friends and fans.

After trawling Facebook for users by criteria like age, location and interests, uSocial then recommends potential friends to companies, who approach them directly. A firm pays $727 for each 5,000 users who agree to be its friend, or 15 cents each. "Fans", who merely express support for a firm, are cheaper.

It is not the first time uSocial has tried to sell the benefits of popular online destinations to marketers. It sells votes on websites such as Digg, which let people share content and vote on which articles should appear on the site's front page. It also sells Twitter "followers" (people who follow a user's updates) to companies looking for some positive buzz. Those websites disapprove. So does Facebook, which may try to bar uSocial from its service.

Bursting the branding bubble

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The Economist:

BRANDING ONLY WORKS ON CATTLE
By Jonathan Salem Baskin

"Branding doesn't work any more...You need another branding solution like you need a hole in the head." Considering that he makes his living as a branding consultant, Jonathan Salem Baskin is a brave man. In his iconoclasm, he reminds of a routine by Rich Hall, in which the American comedian questions why Coca-Cola is willing to spend millions on brand advertising, only for diners in a restaurant to reply "Whatever" when the waiter asks "Is Pepsi OK?".

Despite his profession, Mr Baskin is nothing if not consistent, as followers of his website and blog will know. His lively new book challenges the brand gurus--and indeed, the entire subculture around the concept of branding, to prove things at the most fundamental level--that their campaigns, no matter how clever or how "viral", actually make customers buy more of a company's products.

Although a rabble-rouser, Mr Baskin is no Naomi Klein. His book is aimed at chief executives, asking them why branding "isn't held to the same standards as the activities of the rest of the enterprise". He believes that companies can no longer rely on vague image associations in a world where consumer choice is heavily influenced by information and opinions found online. "People are harder to find, more difficult to convince, and less likely to remember what they're told... We need brands to do more, only we're getting less from them", he writes.

With this challenge, he takes on a "multi-billion creative Media-Industrial complex dedicated to maintaining the status quo," making good use of an analogy with the Ptolemaic system (which for centuries placed the Earth at the centre of the solar system). Money is squandered "in perpetuation of a charade that hasn't been remotely relevant since the mass media days of the mid-twentieth century". As with Ptolemy's idea, Mr Baskin is dedicated to gathering the evidence so the charade can, finally, be refuted.

Francesco Guerrar & Josh Noble:

A year on from the collapse of Lehman Brothers, Francesco Guerrera examines how and why the bank failed, providing the inside story from John Thain, Bob Diamond, Rodgin Cohen, David Nason, Bryan Marsal & Pete Peterson.

Appland: How smartphones are transforming our lives

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Richard Fisher:

My wife is standing at the door to the bathroom, watching me time my toothbrush routine using an application downloaded to my iPhone. Thirty seconds on upper-right molars: done. "What are you doing?" she asks. "Nothing," I mumble through a mouthful of toothpaste. She doesn't speak, but her eyes say "I think I love you a little less." If only she understood

Ever since I bought an Apple iPhone, I have been hooked on apps (see "What's app, Doc?"). Apple's App Store is a virtual shopping mall with all the shopaholic joy of a real mall but none of the annoying teenagers. It is packed to the virtual rafters with thousands of downloadable software tools. Admittedly, the store makes a bad first impression on many people, with novelty apps such as lightsabres dominating the top 25 chart. But dig a little deeper and you will find life-enhancing riches.

I confess that I now turn to the App Store in almost every situation. In unfamiliar places, I use apps to find the nearest gas station, cinema or even public toilet. I track the length and time of my commute. All my gym workouts are logged. Finding a nice place to eat while on the move is a cinch. Even this article is brought to you thanks to a voice recorder app (iDictaphone) that I used for recording interviews, and one that helped me "mind map" my thoughts when planning it out. Sometimes I daydream about becoming the most virtually enhanced human in the world.

Virtual Properties released a location based (GPS HomeFinder) real estate broker/agent branded iPhone app earlier this year. An update will be available this fall. Our clients have deployed mobile websites as well, ranging from straightforward support for many phones to sophisticated smartphone sites.

These mobile applications use GPS and mapping data. We offer detailed, frequently updated maps and satellite imagery for a fixed fee. This means our clients can grow applications and volumes without paying more - an important factor in today's market. (Search engine map fees are based on usage - the more you use, the more you pay). Contact us at 608 271 9601 or zellmer@virtualproperties.com to learn more.

Viral Video Marketing: Pop Goes the Critic

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Eric Asimov:

WHEN the refined British wine writer Jancis Robinson joined the frenetic Gary Vaynerchuk last fall on his video blog Wine Library TV it was as if Helen Mirren had shown up on an episode of "Dog the Bounty Hunter."

As Mr. Vaynerchuk began shouting his greeting into the camera as if he were hawking cap snafflers at 3 in the morning, the ever game Ms. Robinson could not help but look appalled. But she hung in there, and together they began tasting wine in the informal studio above Wine Library, his family's wine shop in Springfield, N.J.

As they sniffed a 2006 Ridge Geyserville zinfandel, or "took a sniffy-sniff" in Mr. Vaynerchuk's parlance, Ms. Robinson said she detected the aroma of violets. Mr. Vaynerchuk said it smelled "very candylike."

Ms. Robinson grimaced.

"To me, candy is a negative thing," she said. "Candy is something I get on cheap zinfandel."

"In my mind," he responded, "candy, you know, depending on the candy, for example, Big League Chew or Nerds, could be tremendous, whereas candy I don't like, like Bazooka Joe bubble gum, could be a problem."

Brokers and agents can create and publish audio and video podcasts. Useful topics might include: local market activity, new developments, interesting homes, recent transactions, home ownership tips, core services (mortgage, relocation, insurance and home warranty) and recruiting opportunities. Main Street's CRM, podcast and blog tools can quickly get the word out to your world, and beyond. Our CRM tools can quickly generate informative seller letters, postcards, eNewsletters and eCards to your entire agent & company database. One system, Main Street, makes this easy.

The Economist:

HOW big an influence on spending is housing wealth? Hopes for a consumer revival in countries where house prices have slumped rest, in part, on the answer. A purist view is that the value of homes has no "wealth effect" on consumption. An increase in house prices only raises the future cost of shelter. Those about to trade down or sell out receive a windfall, but first-time buyers and those hoping to buy a bigger home are worse off. The overall effect on wealth is a wash. But even if that is correct, house-price increases may still have an impact as they create housing collateral for consumers who could not otherwise borrow. A study* by Atif Mian and Amir Sufi of the University of Chicago's Booth School of Business pins down the size of this effect, using the credit records of almost 70,000 American borrowers.


It could be that an unseen influence, such as greater optimism about future earnings, pushed up both house prices and debt. So the authors use their granular data to first establish a link between the two, which is apparent in the aggregate figures up to 2006 (see chart). They found that house prices and household debt increased most where the supply of new housing was limited--in places that are hemmed in by hills, rivers or the ocean. But in cities where housing supply is very "elastic"--where homes can easily be built to meet demand and prices did not rise--debt barely rose either. This suggests that house-price rises led to more borrowing.

How much of this was simply down to new buyers needing bigger home loans? By limiting their sample to those who were already homeowners in 1997, before the boom in housing and credit, the authors were able to measure how much of the rise in debt was the result of cashing in on higher home values. They reckon almost 60% of increased debt between 2002 and 2006 came from this source. Put another way, every $1 increase in home values led to a rise of 25-30 cents in borrowing. That is far bigger than some long-standing estimates of the wealth effect from rising asset values, which are in the 3-5 cent range (though these include the response of renters, too).

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This page is an archive of entries from September 2009 listed from newest to oldest.

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