Intelligent Marketing with Web 2.0

by Luke Donnelly

In the 21st Century, companies will rely more heavily on the artificial intelligence of the Social Web (Web 2.0) to market products and services to people more effectively. Effective marketing relies on intelligent spending, using those precious marketing dollars to reach the right demographic targets with your message. Why pay to broadcast your advertising message to a wide audience, when you can make useful "recommendations" to only those that are likely to be interested, at a much lower cost? This is why companies are starting to provide goods and services using the tools of Web 2.0.

Even today, in the infancy of the Web 2., take companies like London's Last FM. This online music service "scrobbles", or collects data about what you listen to on iTunes, and displays it to other Last FM listeners, and in real-time on your Skype profile. It also collects data about what you've been listening to on the go, by eavesdropping every time you connect your iPod or iPhone to your computer. The service then slowly, over time, builds an accurate profile of the kind of music you like. Even if your tastes are varied.

Using tagging and intelligent software, Last.fm uses your profile to make recommendations about songs or artists you might like to pay to download and concerts you might like to attend, based on your location and tastes. It identifies other listeners with similar taste to yours, and makes recommendations such as "We know you haven't heard any music yet by X, but 85% of people with tastes similar to yours often listen to the new album by X". You can play a sample song by X and watch a video. One click later, you've bought the album, not from a traditional ad, but from a recommendation -- a helpful, accurate recommendation.

"Recommendation marketing" is useful, but it is crucial that the recommendations are accurate. Look at Amazon. When I buy a birthday present for my sister on Amazon, I factor in that she has very different tastes from me. So it's exhausting when I then receive inaccurate purchasing recommendations a few months later from Amazon: "Hey, we think you might like to buy the new book by (insert name your least favourite Chick Lit author here)".

Doesn't Amazon's recommendation service remember that I didn't choose to send that previous gift item to myself? I chose to send it to someone else! So the later recommendation that Amazon makes to me should be based on MY tastes, not on my judgments about gifts for others. There's room for improvement.

Companies know that the social web is big business. A recent business case competition on tagging for taste and suggestion was held by Netflix, with a one million dollar prize! Using the Netflix online DVD ordering service, customers build up a preference list of movies they would like to see. The problem is that customers are not walking around a rental store. The only real estate they have is the computer screen. So if they don't see titles they might like, they don't rent, or they rent less frequently.

Making accurate recommendations about what a consumer might like is a important when managing a business. Why pay for warehouses full of DVDs that no-one wants to see? How many copies of a new European arthouse movie should the company order for their St Louis warehouse, for example, based on the film-watching tastes of their customers in St Louis?

Netflix has their own recommendation engine, but they suspected it could be improved. After years of trying to improve it themselves, they thought there was still room for improvement. So they exposed much of their customer statistics and ran a huge business case competition over three years, that ended last week. The prize of a million dollars went to a team that designed a recommendation engine that could beat Netflix's existing engine by 10%.

But this is just the beginning. A few short years from now, with (and in some cases without) our permission, smart companies will be using Web 2.0 marketing technologies to know exactly what we listen to, what we choose to wear, what we watch, where we like to eat out. But also, what we have not yet watched. What we have not yet listened to. Where we have not yet eaten, but, based on accurate judgment about our tastes, where we would like to eat.

At that point, the common questionnaire will be dead. Web 2.0 will be almost as intelligent as humans, and a huge percentage of company recommendations will lead to purchases. Enriching your experience, increasing companies' earnings, and every marketing dollar spent will yield returns.

It’s All in the Packaging

by Jen Non

Browsing through the shelves at Kinokuniya reinforced one important point that marketers tend to forget: the power of packaging.


Yes, the brand name matters. In the same way that most people will gravitate towards the best-selling authors such as Dan Brown, Danielle Steele or Jodi Picoult, consumers in a supermarket will readily look for big-name brands such as Heinz ketchup, Pantene shampoo or Colgate toothpaste. Yet, if you’re in a very cluttered or crowded area such as Kinokuniya (or any hypermarket like Carrefour or Cold Storage), the problem is standing out among the thousands of seemingly identical items.

If the average customer is like me, he/she will quickly scan the shelves and look at items that grab the eye. For example, while browsing aimlessly through the non-fiction sections of Kinokuniya, I tended to look at books whose covers caught and held my attention through colourful or interesting graphics, or succinct titles that hinted of something fascinating (e.g., "The Fall of Advertising & The Rise of PR" by Al Ries and Laura Ries; "Guns, Germs and Steel" by Jared Diamond). All other books fell to the wayside, with nary a thought given to them. With the countless selection offered by Kinokuniya as well as the limited time I had in the store, I could not be bothered to look at each book one by one and read each of their précis on the back cover. Similar to being at the supermarket as well, when you’ve got a harried mother of two looking for mayonnaise while being plagued by the constant cries of her child who WANTS ICE CREAM… NOW!

Sadly, though, packaging (as well as shelving and visual merchandising) has been largely out of the product mix whenever marketers do their brainstorming. Most of the time, we get bland and generic labels that do nothing to excite a customer’s attention and imagination. Even worse, we get packaging labels that aren’t even seen by the customers! To quote one recent article by Scott Young and Jonathan Asher, “Consider rounded containers. They look great in the conference room (or when viewed in a focus group) when they face directly forward, but, in-store these containers are often turned off-center, which can greatly compromise their impact and communication. Bagged products can also be a challenge because they are likely to sag or get ‘scrunched’ on shelf, which can impact quality perceptions and/or make key copy points (claims, variety, etc.) unreadable.”

If you still don’t believe in the power of good packaging, consider the Japanese who have elevated packaging and gift wrapping into an art form. The food contained inside the beautiful packaging may not always be good (and for non-Japanese speakers such as myself, we may even be clueless as to what is actually inside the package), but we must have that item because it’s simply exquisite! Moira Cullen, the Senior Director for Global Design at The Hershey Company, said it best when she spoke about the packaging employed for food, confections and teas sold in Japan’s leading department stores: “On a purely visceral, visual level, I was seduced by these objects. The boxes and pouches and bags were exquisite. Each one was uniquely exceptional. I didn’t always know what was inside, but I didn’t care. I was so amazed I bought an extra suitcase just for samples. I had to bring them home with me.”

Photo source: theDieline.com. Those interested in learning more about brand packaging may go to the Brand Packaging website at www.brandpackaging.com

DDB Brasil's Tsunami: How not to win awards

In a bid to create the edginess necessary to win awards, it seems that the distinguished adverstising firm DDB Brasil overstepped the bounds of ethics and good taste when it released the following ad, entitled "Tsunami," supposedly created for the World Wildlife Fund.


While the ad is illogical and distasteful, evidently its shock value was enough for DDB Brasil to garner a prestigious One Club "Merit Award." However, many complained that the content of the ad was offensive, and what's worse, the ad was not even commissioned by the WWF. It was created by DDB alone for the purpose of claiming awards.

Confronted with public anger to the false ad, DDB Brasil initially lied and disclaimed ownership, but it was later shown to be the agency's work. The fallout from the fiasco has prompted the One Club to revoke DDB Brasil's merit award and issue strict new rules regarding "fake" ads. Moreover, the WWF has also issued a statement condemning the ad and disclaiming any association.

However, the firestorm did not stop there, and the scandal has spawned a sardonic "response" ad, which proclaims: "It was just advertising. Don't make war about it."

Pepsi gives readers a taste of the future with Harry Potter-style ad

This post is an article that was shared by one of our members, Roland Lim

This article heralds the new media space to watch out for: magazine video ads! Will this new technology catch on?

By Kenneth Li in New York

Published: August 20 2009 03:00 | Last updated: August 20 2009 03:00

When Entertainment Weekly readers open the magazine next month, they will discover people talking to them from a wafer-thin video screen built into a printed page in a marketing experiment that highlights the radical new strategies advertisers are employing to reach consumers.

The full-motion ad is made possible by technology from a US company called Amerchip that works much like a singing greeting card and recalls the moving pictures of the "Daily Prophet" newspaper of the Harry Potter films.

The cost of the promotion from CBS, the US broadcaster, and Pepsi, the soft drink maker, was not disclosed. However, magazine industry executives estimated the ad would come at a high cost at a time when media companies around the globe face a severe decline in advertising revenue.

"It's part of the future - a way to engage consumers in new and surprising ways," said George Schweitzer, president of CBS marketing group. "How do you sample a drink? You give them a taste."

CBS and Pepsi's promotion will feature a six-page print advertisement in the magazine that will play a video promoting the Monday night autumn television programming line-up.

The promotion will appear in copies to subscribers of the magazine in the New York and Los Angeles area. It has not been decided exactly how many of Entertainment Weekly's 1.8m circulation will receive the video ad version.

Although the companies declined to discuss the cost of the promotion, one magazine industry executive familiar with the technology estimated the ad on 100,000 copies would cost in the low seven-figure range.

On that basis, the cost of one full-page ad page for an advertiser in Entertainment Weekly would be many times higher than 9 cents per regular page, based on the magazine's current rate card.

Although it remains unclear if the technology will catch on with other marketers and magazines, the magazine industry has continued to seek new technology to lift the moribund print sector, which has been hit with a severe decline in ad revenue and slipping circulation.

Esquire, a men's magazine published by Hearst, last year created a cover for its 75th anniversary issue built with an E Ink screen, the same technology used in Amazon.com's Kindle reader, that generated significant buzz.

Find the article on the website of Financial Times