Buzz Marketing for Technology: December 2006

The Google / YouTube Come-On

Recently in BusinessWeek they uncovered the fact that Google and YouTube are dangling nine-figure sums in front of major programming and network players—that is, the Time Warners, News Corps, and NBCs of the world.

Google calls these monies licensing fees, according to executives who've been involved in the discussions. But some of them characterize the subtext like this: Don't sue us over copyrights. Take this (substantial) payment, and trust us to figure out how we'll all make serious money once we get advertising and revenue sharing worked out.

To complicate matters, no publicly traded media company today is in a position simply to dismiss, say, $100 million. Such a sum far exceeds what any single broadcast network can extract from the online world--and drops straight to the bottom line.

Where is the Buzz? It is interesting that no programming giant has sued YouTube yet or maybe they know they can't sue their way out of this.

For more on this topic check out BusinessWeek

Technology marketing investment on the rise!

Tech marketing spending is on the rise again and will increase by 7.5%, the highest growth rate in four years, according to a report from IDC. While tech marketing investment will climb this year, it will also outpace global IT spending (again!), which will be up 7.0%, IDC found.

IDC's annual benchmark study found that about 40% of tech companies are seeing declining marketing budget ratios (MBR) despite an increase in marketing spending. MBR is defined as marketing expense as a percent of total revenue and typically is seen in the 3-5% ratio – with IT firms mostly around 3%

Software companies will lead the pack in marketing spending this year, increasing their marketing budgets by an average 9.4% over last year, IDC found. Hardware companies will increase marketing spending by an average 5.4%, while pure play service providers will boost marketing budgets the least by only an average of 5.3%.

IDC also looked at how tech marketers will allocate their marketing dollars. To me the most interesting stat was the program to comp ratio of 65%, indicating relatively lean teams and reserving maximum budget for pure programs – probably outsourced!

Good News, Bad News – where’s the Buzz? – Keep a watchful eye on your MBR and your program to comp ratio. This is a good time to take inventory your “in house” skills and look for where you may need to add to your mix with an outsourced vendor to help you get the yield from that increased budget!

Blogs and B-to-B belong together

A KnowledgeStorm survey of more than 4,500 IT professionals found that more than 80% read blogs, with 18% saying they read them daily and 33% weekly! Moreover, 53% of respondents said blogs influence their purchase decisions. That influence looms even larger over regular blog users. Of the respondents who said they read blogs daily, nearly 69% said blogs influenced their IT purchase behavior. Clearly the blogsphere is having the desired influence we as marketers had hoped.

Other interesting results were nearly half of the respondents said they comment on or contribute to blogs at least once a month; 70% said that they "recommend or pass along content from blogs to co-workers and colleagues" at least once a month; 59% said they were "somewhat" or "very" familiar with RSS technology, which lets users subscribe to blogs and other online content. But only 31% said they subscribe to RSS feeds or use a RSS reader to access content.

So what should Buzz Marketers be doing? Two things: First, if you are going to blog, credibility and transparency are the keys. Blogs that are clearly written by industry or subject matter experts will, even if they are written by a vendor, stand out if there is compelling content. Second, we as an industry have to get more innovative with marketing opportunities within these environments. It requires an ad message that isn't so corporate and formal, and it may involve incorporating the blogger into the dialogue with you the marketer.

CAUTION: Web Stats May Vary

WebTrends, LiveStats, WebSideStory – are all software vendors with no standards for calculating hits, views and more. Competing methods of measuring traffic online leave advertisers and marketers almost flying blind!

From the start, measuring online traffic was a juggling act. Rather than simply relying on a Web site's traffic reports, major advertisers traditionally compared that data with independent services. Those outfits argue that there are many reasons not to just count the clicks off a Web site's server logs. For example, comScore points out that servers would count pop-up ads as a page view if their tracking service didn't filter them out.

Independent traffic analysis becomes more important as bigger chunks of advertising flow online and the threat of "click fraud," grows bigger. Newer services, such as Alexa and Hitwise, are also alternatives to the older traffic-measuring companies and providing some free traffic data via their Web sites.

Buzz Marketing BuzzKILL: Overtime a variety of metrics will be applied to different services until one measurement that combines a set of standards can emerge. Until that happens Web metrics will remain a crapshoot.

How to Measure WOM Advertising

Keller Fay group put out a great research paper called Single Source of Word of Mouth (WOM) Measurement available on their website and in it they detail how WOM advertising can be tracked – it’s a must read for Buzz Marketers despite the fact that the study focuses only on B2C.

Here is a summary of the findings

1) Over the course of a week, consumers participate in conversations in which specific brands are mentioned 78 times (per week!)
2) 70% of these conversations take place “face to face”, 19% happen by phone, 8% are online (shocking since I would have thought more would be online)
3) Conversations were mostly with Family (23%), Spouses (25%) Friends (26%) and co-workers (15%)
But here is the cincher
4) a full 78% of the consumers ranked the advice as credible, it is hard to imagine these kinds of rankings being assigned to advertising or other traditional marketing communications. That’s the power of relationships for ya!

What’s a Buzz Marketer to do?? I think we need to be more adept at developing greater targeted messaging, more visual advertising, and better experiential brands so we can stimulate more word of mouth. Think about it …

In Search of the Best RSS Reader?

There are an ever increasing number of Web-based RSS readers out there - and if you think of RSS as a tool for helping you to drink from the fire-hose of information on the Web, then you'll find a lot to like about Web-Based RSS readers.

They're always available, no matter what machine you're on; it's one less application that you have to install (and upgrade) on your system; and they keep your feeds as up-to-date as possible.

The downside is because they are browser-based applications they don't offer the flexibility (or the complexity) of apps installed locally on your hard drive. And they don't offer anything fancy in the way of user interface.

With locally installed apps like Feed Demon or FeedReader they offer such interface niceties as a three-panel interface and let you individualize the display of the feed entries.

Regardless Buzz Marketers monitor a selection of RSS readers to see how the end user community is viewing their feeds. For me the top Web-based RSS readers are Google Reader, Newsgator Online, and Bloglines. All three are available for free so why not see what your user sees?

For a more in depth discussion on Web-Based RSS Readers check out Information Week’s analysis