Tracking What We Do Online

The Wall Street Journal has started a fascinating series, "What They Know," about how advertisers and companies that offer Internet services gather info on online consumer behavior. It's no secret that privacy is, sadly, either non-existent or very difficult to protect. Although many marketers are listening more closely to consumers' concerns about privacy, this series shows why the issue has become so controversial.

The first article explained the background and extent of the tracking, with a sidebar showing, in detail, how consumers can try to block tracking technology.

Today's article discusses how Microsoft could have turned privacy protection on in its Internet Explorer 8 software as the default setting (as product planners intended). Instead, thinking of the future advertising revenue to be gained by tracking users' behavior and serving up ads as appropriate, the firm ultimately released the software with protection set to "off" by default; users must turn on the privacy protection every time they start the software. Not a user-friendly decision, IMHO.

This is a must-read series for marketers that want a multidimensional view of online privacy. The stakes are high--and if marketers don't do more to disclose and to give customers easy ways to restrict some tracking, the backlash will get ugly.

You can get updates from the Twitter feed based on the series.

Marketing to the Mobile Crowd

Demographics can give marketers a general picture of the market, but to dig deeper, companies must understand and respond to customer behavior. Otherwise, competitors that identify trends early and respond with appropriate behavior-driven marketing may be able to pick off customers, first in ones and twos and then in torrents.

The widespread adoption of mobile devices is a good example. A recent article in BusinessWeek discusses the vast opportunities available to marketers that understand how, when, where, and why people use mobile devices. Smart phones, iPads, and other mobile gadgets have become utterly indispensable for many consumers and business folks.

It's actually a risk not to include mobile in today's marketing plans, IMHO.

For instance, knowing that so many drivers have iPhones within reach, the insurance firm State Farm offers an app for reporting an accident (and locating nearby repair facilities, etc.). This kind of behavior-driven marketing demonstrates to customers that the company gets it. More important, it adds utility that strengthens the overall offering.

However, many marketers haven't yet jumped on the mobile bandwagon. The firm eROI finds that less than one-third of companies surveyed believe their customers put a high value on an optimal mobile marketing experience.

I wonder whether these non-believers have tried turning off their smart phones for a day? The danger in lagging behind your customers' behavior is that you might lose customers to competitors before you have a chance to catch up. Behavior-driven marketing is often the most powerful and effective marketing of all.

Group Buying Goes Global

Group buying has been gaining ground worldwide. It got its start in China as tuángòu and now hundreds of Chinese Web sites compete to provide deal-of-the-day discounts to Chinese consumers.

Groupon, a fast-growing US group buying site, is a popular destination for consumers seeking special limited-time, deep-discount deals offered by restaurants, stores, hotels, spas and other marketers. Groupon's competitors include LivingSocial and Tippr (see logo below). Facebook and Twitter are an integral part of group-buying communication, allowing deals to go viral and win customers quickly.

Groupon's London branch maintains a Facebook page where thousands of fans can click to see the deal of the day, suggest new deals and send friends to sign up. UK consumers can also find deals at the site and FB page of competitor Groupola.

Can group buying sites be a long-term value proposition? Or is this concept maturing so rapidly that the major competitors will have to evolve other offerings to stay relevant and gain attention in an increasingly crowded marketplace?

Zynga + Google vs. Facebook?

Zynga, known for FarmVille and other Facebook games, is reaching for the sky with ambitions to be as ubiquitous in the game world as Google is in the search world. Its slogan is "Connecting the world through games."

Zynga is releasing apps to reach the mobile audience and expanding its line with instantly popular FB games such as FrontierVille which, after a month, has already attracted 20 million users. With so many players, Zynga has great potential as an advertising medium (see interview with Zynga's founder here).

However, the New York Times points out that Zynga's traffic dropped a bit after Facebook restricted some of the Zynga messages related to game usage ("Look! I found a pretty, purple, polka-dotted pony that needs to be petted/fed/watered/walked/brushed!").

If, as reported earlier in July, Google is indeed investing heavily in Zynga, the resulting marketing power could give Zynga the platform it needs to break free of Facebook's framework and create a new global gaming/social media structure. Given the many questions that Facebook's privacy policy has raised, players just might be upset enough to migrate (as a group) to a new Zynga site. This will be interesting!

What Makes Uniqlo Unique

Japan's Fast Retailing, parent of the Uniqlo clothing retail chain, has more than 940 stores worldwide and is expanding at the rate of 500 new stores per year.

Uniqlo differentiates itself from retail competitors such as Zara and H&M. "We don't want to chase after 'fast-fashion' trends,' Fast Retailing's founder, Tadashi Yanai, told the Economist recently.

Instead, Uniqlo sells fewer items for long periods--but in a vast selection of colors, as many as 50 per item, for example (see photo).

Uniqlo is unique in another respect: It recently began working with Grameen Bank to bring up to 2,000 clothing manufacturing jobs to Bangladesh. To date, this seems to be the most ambitious attempt by a Japanese firm to launch a social business. Adding a social component to the fashion and selection component is an excellent way to improve the value proposition, IMHO.

Remember a World without Kindle?

Amazon introduced the Kindle in November, 2007 and since then, I don't remember a single day that the retailer has not featured a Kindle on its home page. Here's the way Jeff Bezos explained the Kindle when it was first introduced. This wasn't the first e-reader ever marketed, but the Kindle had to educate its target market and sell the category, not just the product.

By mid-2009, everyone knew what a Kindle was . . . and Amazon had cut the price to capture more sales. Fast-forward to October, 2009, and the newest model had an even lower price. By this time, Barnes & Noble was launching its Nook, and the category was well established.

I bring this up because Amazon just announced that it now sells more Kindle electronic books than it does hardcover books. However, since Amazon makes little if any profit on each Kindle e-book, this isn't something that stockholders are likely to cheer--although the customer clearly wins. And competition is getting fiercer, thanks to the iPad, which will likely translate into more price cuts as the holidays approach. Meanwhile, here's a comparison by CNet.

Humongo Hits the Road

Field trip!Humongo, a digital agency based in Connecticut, is taking to the highway for its fourth annual summer road trip. The agency is driving up and down the East Coast, stopping in Portland, Boston, New York City, Washington DC, Raleigh, Asheville, Atlanta, Savannah, Daytona Beach, and Miami.

Why on the road? Humongo is demonstrating social media in action (blogging and tweeting about the tour, producing videos along the way) while showcasing creative businesses and nonprofits that use social media. Trip sponsors include Green Mountain Coffee, Ford (the trip's official vehicle), Sprint, and Wingate hotels.

Ultimately, of course, the goal is to "make marketers aware of our agency," Darryl Ohrt writes in his Ad Age blog. And it's a fun, creative way to reach out and share creative ideas from marketers visited along the way.

The trip starts on Monday. Travel vicariously by following www.humongonation.com or checking tweets at http://twitter.com/HumongoAgency/. Sorry I missed the first three road trips, but I'll be peeking at this one from time to time.

Loudmouth Golf and John Daly: A Colorful Partnership

John Daly's colorful golf wardrobe is giving sponsor Loudmouth Golf a marketing boost.

Here he is at the British Open, in a typical (!) outfit. At the opening dinner, he wore a jacket with an eye-catching pattern of orange, teal, green, and blue on black.

Now that the tournament will be shown in HD, fans will get a real eye-full of Loudmouth fashions.

And why not? Loudmouth specializes in golf attire with personality, to bring out the inner technicolor in any golfer's game.

After one day at the British Open, Daly's doing well. Will other golfers emulate his style? More important, will other firms follow Loudmouth's marketing lead?

The App Economy--Blades to Apple's Razor

So many apps, so little time. Kraft just announced an iPad app for 20-something parents interested in a healthy diet for their youngsters. Glasgow has a shopping iPhone app to help residents and visitors find stores and attractions in and around the downtown area. The list of apps (for iPhone, for iPad, for iTouch) goes on and on, from the very practical to the wildly improbable.

InformationWeek points out that the App Store's offerings range from free to $899.99. According to an analysis by Piper Jaffery, the App Store isn't super-profitable . . . but of course that's not the major purpose. This is a blades-and-razor strategy, with the apps being innovative blades for the nifty iPhone/iPad/iTouch razor. Customers who want the apps have to have the iWhatever. That's the App economy at work.

It's worth pointing out that the App Store, like Amazon's Marketplace and eBay's auction offerings, carries no inventory cost to Apple. Every time a customer buys an app, Apple gets a hefty cut of the price. The app profit margin is gigantic for Apple, so every sale sweetens the bottom line.

Smart Subaru Loyalty Marketing

Subaru's quarterly Drive magazine just arrived . . . and on the inside back cover, I spotted an invitation to request a free Subaru Badge of Ownership at a special Subaru web site. The badge is adhesive-backed to stick to my car's rear bumper (or another likely spot).

Each customer enters his or her name and address, an e-mail address or phone number, and the VIN of the Subaru owned. Customers specify how many Subarus they've owned (in my case, 4) and can request lifestyle icons to be included on the badge (such as the snow sports icon shown above).

This is such a simple but effective brand loyalty-reinforcement gimmick that I had to blog about it--right after I clicked to order mine.

Here's what makes this clever:

1. Subaru owners self-select to show their loyalty to the brand.
2. Subaru now knows how many of its vehicles I've owned (since I entered that number when requesting the badge).
3. Subaru now knows a bit about my lifestyle interests (snow sports, for example).
4. Subaru now has my e-mail or phone for contact purposes, plus my address.
5. Subaru asks owners to suggest other lifestyle icons to be offered (gaining insight into other customer interests)
6. Subaru can connect owners to specific vehicles and demographic info, updating its database.
7. Subaru's car-lover forums and dealers have something unique to talk about.
8. Subaru's customers feel they're part of the "in crowd" when they spot these badges on other cars.
   

This program carries some cost, but that's minimal compared to the opportunity to reinforce and reward brand loyalty. Already, more than 7,000 people have responded. Smart marketing, Subaru!