Analytics And Privacy Issues

Back in January an analytics firm called Flurry published a post discussing a possible tablet coming from Apple, what we now know as the iPad.  Needless to say this information was not official and could be considered a "leak", but how did this data leak?  Well apparently some testers at Apple installed certain apps to test on the iPad prototypes, some of these apps had Flurry's analytic software that sent data back to flurry.  Flurry mined the data and figured out details that pointed to Apple developing a new product.  Furthermore, they also noticed that Apple was testing the upcoming iOS 4.0 on their campus.

In April, Apple decided to modify the app store conditions to ban the use of analytics tools such as Flurry's.  In a recent interview, at the D8 conference, Steve Jobs (Apple CEO) discussed the ban.  He claims that analytics tools that behave like Flurry's break their privacy and terms of use, in addition to breaking the privacy of the app users; and in my opinion he is right. 

Flurry allegedly gathered app user's personal data without consent or at the very least detailing what kind of metrics they actually tracked.  I understand that more data could lead to a better, customized marketing experience for the user, but where do we draw the line?

From Apple's point of view Flurry's post or data mining could lead to potential economic loss.  The kind of data they released could affect Apple's stock price and market confidence.  It can also reduce competitive advantage by disclosing technical data from Apple devices to the competition. 

From a consumer's point of view I'm concern for the lack of disclosure.  The fact that they could collect my personal data and they don't ask for my permission or give me the choice NOT to use the app is unethical or questionable at best.

This is just another issue of privacy that has been raised over the last few months.  I think that we are just starting to notice and things will get worst... the gray area will become bigger and will be entered by many.  Hopefully we, the users, will be able to force companies to adjust privacy for our protection or hope that we reach a happy medium between privacy and marketing data mining.  But is there really a happy medium?

Will iAds Change The Mobile Marketing Arena?

Today was the first day of Apple's WWDC 2010 and as usual all the hype was around Steve Jobs' keynote... even though most of the world knew he was going to showcase the new iPhone 4.  Personally I'm not blown away by the new iPhone, most of the features were already expected;  however, there was a feature that has interesting implications and not many people are talking about it yet.  Apple will be integrating an ad platform called iAd to the iPhone OS 4.0 (iOS) which will run on iPhones 3G, 3GS, 4, iPod Touch and iPads. 

Apple's success over the last decade with the iPod, iTunes/App store, iPhones could be attributed to the fact that their products are vertically integrated.  They provide users with an extremely user-friendly ecosystem that facilitates the purchase and consumption of media and software.  Now they are adding advertisement to their ecosystem.  There are not much details about how it will work, but Jobs has said the following:

• Developers keep 60% of ad revenues;
• Apple will host, deliver the ads;
• There are a number of companies already signed up to spend $60 million dollars on the platform for the second half of this year;
• Ads will display from within the apps; ads will be highly interactive allowing users to watch videos and even buy products without leaving the ad or app.

 So why do I think Apple might change the mobile marketing arena?  Well lets just look at some numbers.  Apple is #2 in the U.S. mobile market share covering 28% of the market (Nielsen).  Furthermore, Apple claims that it will be selling the 100 millionth iOS device.  Now let's be conservative and assume that about 50% of those devices can actually upgrade to iOS 4.0 we are still talking of roughly 50 million devices.  That means that Apple has a portfolio of 50 million users to give to advertisers.

In addition to the install base Apple has a benefit no other mobile ad company has: it knows the product inside out.  Apple knows exactly what can and can't be done with the iPhone and therefore they know exactly what kind of ads can be built.  This will push the limits of what kind of ads can be done and possibly yield innovative ads.

Another reason why Apple might change the mobile marketing arena is the leveraging power they have.  They've already secured $60 million worth of advertising for a service that is not out or has been proven yet (proof of their leverage).  Apple will most certainly negotiate good deals that will benefit them and will allow them to provide developers with a "perfect" single solution.  Developers need not worry about looking for other mobile ad solutions if Apple has a broad, solid portfolio that pays good and requires almost no management.

iAds seems to be another solid addition to what seems like a perfect ecosystem.  If Apple has made iAds as friendly as their other solutions we might be looking at the next step in the mobile marketing evolution.

Does Every Website Need An Interactive Community?

It seems that every website I go to now has some kind of interactive community component; you know... comments, thumbs up/down, likes, ratings, you name it.  I think the reason for this is the amount of APIs (Facebook, Twitter, Digg, etc) and tools (Disqus) that are out there that allow website owners to include interactive community tools/components on their sites.  But why do site owners want to have interactive community components?

I think that there are a number of reasons but I believe the ultimate goal is usage, and by that I mean page views, time spent on site and number of users.  Site owners rely on active communities to generate traffic, retain users for longer times and in some cases generate content; all in order to, hopefully, generate revenues.  But what some of these site owners don't realize is that they might not need all that to make their site successful.  Moreover they probably don't realize some of the potential risks associated with interactive communities.


So does every site need an interactive community? I think I've made it clear that my answer is no.  There are a few distinct types of sites, that I can think of, that do not need any kind of interactive community.

• Banking sites; those sites that are used for online banking and/or as banking portals.  This does not include sites like paypal, google checkout, etc.
• "Transactional"sites; I use the term transactional very loosely, but this group basically covers sites where people place orders for certain things like pizza.  It also includes sites where people can pay for products or services (i.e. AT&T) .
• Corporate sites; Corporate sites are usually exclusively informational.  It is important to differentiate corporate site from micro-sites or sub-portals that may have community components to them. 

 Is this list conclusive? definitely not and I'm sure someone may point out an instance where one of these sites does have a community.  But my point is that these kind of sites do not really need one.  Why would I want to comment, blog, like/dislike something when I'm viewing or paying my bill at AT&T or my bank?  doesn't really make sense.

It is also important to note that the types of sites I listed does not mean these companies shouldn't have interactive community initiatives.  What I mean is that they do not need it within the specific site (i.e. corporate site).  Companies can certainly have other sub-portals, micro-sites or twitter/facebook accounts... but maybe they should try to keep certain areas (properties) "clean" if you know what I mean.

Are We Ready For The Market Of One?

A few weeks back I heard the term in one of my marketing classes that immediately left me intrigued: market of one, a term that I had never heard before then.  A market of one could be interpreted in different ways but it is basically the concept that e-tailers (although is not limited to them) are able to customize ads, products and services to specific customers rather than to customer segments.

So why was I intrigued? well, this type of idea really benefits both the consumers and sellers.  How? you ask.  First, consumers would be getting ads for things they really want instead of random ads... customers might not see the ad as a bad thing if it targets a real need.  Furthermore ads would be more efficient and effective for the sellers, they will not be showing the wrong ad to the wrong customer, and when they do show an ad it is likely to get a click-through because it's relevant to the consumer.

Second, customization is something that many customers like or want and that means that there could be a "niche" business opportunity.  Nike's NIKEiD store is a great example of a seller offering customized products to customers.

There are more benefits, but as I kept looking and analyzing them I started to see a series of potential problems which made me question if we are ready for this style of market.  There are two primary issues: privacy and manufacturing capabilities.

Over the last few months there have been a number of privacy concerns raised around Facebook and Google; privacy is certainly a hot topic and is not without reason.  Every day certain companies gather more and more data on people, data that can be used for good or bad things.  The concept of marketing to specific individuals requires a lot of information which the consumers might not be willing to share.  The lack of quality information on consumers would not allow systems to improve beyond what companies like Amazon currently do (Amazon's Suggestion system).

Customization also requires companies to be able to reproduce what consumers want.  Product customization is not a new concept, however many have failed while trying to implement it.  The issue always seems to be traced back to the amount of offerings.  Sellers, sometimes, offer virtually unlimited options which is not necessarily good, a particular combination can result in unit loss for the seller.  Companies need to be reminded that customers normally don't know exactly what they want and that is why they have to limit their options.  Furthermore, most mass producing facilities will have a hard time tweaking their facilities to accommodate for custom orders.  In the end it might cost more to offer customizations than the gain opportunities.

So are we ready for the true market of one? I think not.  Although there is evidence that shows we are heading in the right direction.  A Business Week article from back in 2002 discussed how some companies were tweaking their solutions to be able to reach what they called "a mass market of one".  Companies discussed in the article improved on failed business models, but looking at the current stage, nearly 8 years later, I don't see a lot improvement.

This is a topic that I've only looked at for the last two weeks and it is very interesting, there are certainly many things I haven't covered but I'm wondering when will we leap to a true market of one.  A place where browsing online would be like watching a wish list that I didn't have to put together.

Branding + Social Media = Success?

For nearly two decades companies have started to expand their brand to the online world.  Some of the largest companies, like Coca Cola, have had an online presence (websites) for ages.  Recently, some of these same companies have taken a step forward and have expanded their online presence into the social media realm.  They have realized the potential positive impact that online social media can have on their brand, but  is online social media necessary for brand success?  Certainly not, there are other things that are far more important for a brand than its online social media strategy. 
 
First let's define what a brand is;  in essence a brand is a word, image, color, sound... basically anything that can be  used to uniquely identify a product or service.  If you see a brown delivery truck what comes to mind? more likely than not you'll think about UPS (United Parcel Service).  What if you hear the Intel "bong"? You'll probably relate it to Intel (if you know something about technology like me).  All these are examples of branding; these companies are trying to make sure you remember who they are and what they do even if it's at the very basic level i.e. Brown truck = UPS = Delivery.  In order to achieve the brand recognition as I just described companies need to have a solid brand strategy and definition.  If a company can't define its brand from the beginning there is a high probability of failure.  A weak or inadequate brand definition will not succeed because of social media, moreover it could accelerate its failure. 

In addition to brand definition, the company needs to figure out the scope of the brand.  Are they targeting a local or global market? one could argue that online social media is an unnecessary waste if the local market is bound to a small town.  Similarly, social media might not be a success factor if the customer segment for a brand is not web-savvy.

So where do I stand?  In my opinion online social media is an absolute most if the company has a solid "offline" foundation and it's ready to expand brand awareness.  Online social media is just a means to an end and its success, or failure, relies more on the strategy(ies) made by the company than the technologies used.  People nowadays think the web is the solution to anything and everything, however the reality is far from it.

Is It Time To Start Charging For Quality?

Last week The Wall Street Journal reported that The New York Times will begin charging for access to their website.  I don't think the news is any surprise as many major media and news publishers have struggled with ways to increase revenues from both their physical and online products. However, I read a blog post, discussing the news, that raises an interesting question: will only the rich get high-quality news online?  At first glance it seems like a legitimate question, but does paying for something really means only the rich have access to it? I don't think so.  What if all news outlets charged? would it happen then? I doubt it.

I, like any other person, enjoy free stuff... but, I also enjoy quality; I'm willing to pay for things I expect to be of high-quality(HQ).  If I do so for most things, why not for content? after all I pay a lot of money for college books and some of them have content that is of questionable quality.  I think that people in the online world have grown used to the "free" business model and therefore feel that charging for content is bad. Furthermore, this consumer mentality could be the reason why so many paywall revenue attempts have failed.  However, is that the fault of consumers or businesses? this comment is right on point: 

"paywalls dont work when you are the only one doing it. row after row of free lemonade stands it is hard to charge a dollar for a glass. but the free lemonade stands dont last forever especially with the decline of income from print. it is a question of timing not of a failed concept."

So if it is a question of timing, is now the right time?  If one pays close attention to services provided online, be it content or SaaS, one can see a rising trend of subscription and freemium based business models.  This a non-scientific indicator that customers are getting used to the fact that if they want something "better" they'll have to pay some money.  There will always be free alternatives, but one needs to understand that it costs money to produce HQ products in both the physical and online world. 

Will only the rich get high quality content? No, but it might come to the point that one will have to pay something for it.  In my mind there are two specific scenarios that could play out:

1. Most if not all news/content sources will rely on some sort of subscription-based business model.  Consumers will determine which source provides content with quality at or above the expected quality for the subscription fee.  The source who do not meet the criteria will fail and become free again or will cease to exist.
2. Freelance writers and/or consumers in general will create their own quality news sources out of necessity.  People might be willing to collaborate to produce quality content --Wikipedia-- for the benefit of humankind.  Just imagine when good writers collaborate to create their own news outlet.

Where are we headed? well no one knows for sure, but I think we are at the right time to start charging for quality news/content.  I think that The New York Times will be somewhat successful at first and will eventually figure it out.  Will there be free quality content out there? I think that there will always be someone out there willing to provide quality in exchange for something other than money.

The Importance of E-Marketing

Have an idea for an online business? Do you think it's good? well it is likely that someone is already working on it or has launched it. Just over 15 years ago e-commerce was a somewhat obscure concept that not many companies thought on following and consumers didn't trust. Back then e-commerce was difficult because we, as a society, just started grasping the concepts involved around it -buying without touching comes to mind. Furthermore, the technology and knowledge required was not as advanced as what we have today. Nonetheless e-commerce presented advantages over traditional establishments; some of these advantages are:

• Ubiquity and Globalization: e-commerce sites are available 24/7 and can be accessed from anywhere in the world.
  
• Lower Start-up Costs: nowadays technology costs are low. Any individual or company could literally start an online business with a few thousand dollars and can start operating quite fast. Traditional businesses usually take more time and capital to start.
• Richness and Standardization: as with most technologies there are certain guidelines/standards that people follow when producing an e-commerce site. These standards make sure that the content can be accessed by people around the world using a plethora of devices like PCs or mobile devices. In addition standards push the technology to create richer experiences for customers; for instance HTML5 allows people to embed videos without the need of additional plug-ins. Videos and other rich media have potential to enhance the customer experience which could lead to higher customer satisfaction and/or revenues.

These advantages are more evident now that consumers have grown used to e-commerce. Nowadays most consumers will go online to check product specs and compare them against similar products before buying it a the store; that's if they don't decide to buy it online first. Some consumers have also found that online allows them to save time that would otherwise be spend driving and in line at stores. Consumer online spending has been increasing year to year since it all started and the marketspace is getting crowded, this is where good marketing can make or break an online business.

E-marketing is basically applying marketing concept to the online world. However one needs to understand that not everything translates directly, and the flexibility that exists in the online world provides allows unlimited possibilities. Therefore e-marketers should be able to evolve or adapt their knowledge to target and fully utilize the opportunities available online.