Promotion

3

Google to launch “Groupon”

Posted at January 22, 2011 // Advertising, Promotion, Strategy / Tactics, Web

The test of success of any brand is if you’re still a brand name, or if you have transformed into a generic word. For Google, the word Google has transformed from a brand to a verb. So, how does a generic free paid search service support a $600+ stock price? Well, Google offers a lot more than free paid search. It’s no secret to industry watcher that Google’s business model is to dominate the World Wide Web.

Why is that important to Google? Because the more services they offer. The more information they gather. The more knowledge they have about internet users. And ultimately knowledge is power, and knowledge makes $$$. The more people use the internet, the more profitable this knowledge becomes. The more people use the internet, the more knowledge there is to know. To capture this knowledge, and ultimately the business opportunity, Google launches new services.

How does this work? You may not pay to use Google search. However, Google asks advertisers to support that service. Advertisers are willing to pay to be featured in Google search because Google has knowledge about your search. Advertisers can leverage this knowledge to maximize the impact of their ads. So, advertisers pay Google. Google search gets funding for continuous operation. You use Google search. You see an ad that was specifically target to you. You click on the ad. You buy a product making advertisers money. Advertisers pay Google. And the circle of life continues.

The latest Google service to be launched is a social coupon service, currently named Google Offers. Mashable obtained a confidential document detailing a program that’s built on a social coupon model comparable to Groupon, Living Social, or a variety of clones already exist. Google spokesperson is reported to confirm the program:

“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”

The news did not surprise industry watchers, as it came shortly after Google’s failed bid to acquire Groupon back in December.  It was reported that Groupon rejected the $6-billion offer and it’s rumored that they are entertaining the idea of an IPO.  However, with Google getting into this business category, Groupon’s future prospect is greatly hindered.

Despite being the entrenched player in the social coupon category, Groupon falls short in several areas in going against Google.  The biggest threat to Groupon is indeed Google’s business model.  Google ultimately can offer a suite of solutions and analytics.  Google can become a one-stop shop for a small business owner, making a marketing campaign easier to be executed by a small business owner.  Google is already a part of internet users’ lives, and can eventually serve up Google Offers to internet users in a variety of touchpoints.  This level of integration is probably something that Groupon is never going to match.  Therefore, it’s fairly conceivable that all else equal, a campaign with Google would be more successful than a campaign with Groupon.  Eventually, a vision of Google search tying to an ad that links to the coupon.  You Google-map a place on your mobile, and a coupon is served to your phone.  You rate a local business on the recently launched Google Places (with Hotpot), and a related coupon pops up.  However, until all that vision comes to life, Google Offer is an immediate success because it just need to place a few link on the many existing Google services people already use everyday to draw attention to this new one.  A shout out on search, picture sharing, blogs, etc.  The launch can be big and immediate.

The opportunity is endless, making it very attractive to advertisers.  In addition, Google’s strength in analytics makes this option more appealing.  One problem with these social coupons is that you cannot understand its true effectiveness.  Coupons got redeemed, but are these all deal seekers?  Did I truly engage these new triers?  Is this a one-time business?  (Sidenote: Tom Fishburne warned his readers this week against jumping on the Social Coupon Bandwagon for exactly this reason.)  Well, Google can serve up a whole suite of analytics that can help you analyze the success of the campaign.  It can also monitor noise around the internet to see the strength of word-of-mouth generated by the campaign.  Did paid search increase?  Did you get a better rating?  You can follow up with a paid search campaign that continues to raise top-of-mind awareness, and keep the engagement going with your consumers.  This makes Google not just a viable player in this market, but likely the biggest player in this market virtually immediately after the launch.

Photo Credit: by Steve Rhodes

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1

AT&T stepping up to the plate?

Posted at January 17, 2011 // Advertising, Promotion, Strategy / Tactics

Finally, AT&T is launching a response of sort to the iPhone / Verizon announcement and the T-Mobile competitive response.  Today, in my Inbox was an email with a subject heading of “AT&T is getting faster with 4G”.

The communication focused on three aspects:

  1. 4G Speed:  First and foremost, AT&T reinforce their plan to launch 4G.  This is not necessarily news.  However, more aggressive efforts needs to be made on this front as competitors continue to use this as their point of advantage.  T-Mobile has launched a directed ad campaign toward the two iPhone carriers for their lack of 4G speed.
  2. Coverage:  This is to continue to reinforce the fact that the AT&T network is strong.  This is part of AT&T’s continuous battle against Verizon.  Verizon has been aggressively promoting their coverage for years.  In 2009, Verizon launched a head-to-head coverage campaign against AT&T.  With the iPhone going to Verizon, it’s more important than ever for AT&T to emphasize that AT&T can offer the same coverage as Verizon.
  3. Talk & Surf:  This is a new battleground for AT&T.  This is directed toward to potential iPhone users going to the Verizon Network.  Due the difference in networks, the iPhone cannot be on a call and on the web at the same time on the Verizon network.  AT&T is capitalizing on this fact to sway current / potential iPhone users to stay with AT&T or to switch to AT&T.  This point of differentiation is likely to be played up more in upcoming communications.  This is one area where AT&T is not playing catch up, but rather has a true competitive advantage.

It’s clear that AT&T has identified who and what they’re going to fight.  The question is how they’re going to build on this campaign.  A lonely email is not going to do the job.  It’d be interesting to see how the story may unfold with new radio or tv ads.

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6

Nameless Logos – Stupid or Necessary?

Posted at January 8, 2011 // Advertising, Promotion, Retail, Strategy / Tactics

As I follow the Starbucks logo conversation, one particular change had evoked quite a reaction:  The removal of the words “Starbucks Coffee” from the logo.

This move invited many reactions from various marketers, branding experts, and strategists.  Some questioned the wisdom of removing the name from the logo and its effect on branding.  Others considered the flexibility offered by the removal of the category.  Some asserted that it was a bold move to remove both name and category at the same time.

Sources say that the words won’t disappear entirely.  While these words will no longer be part of the logo, they will be printed on the Starbucks cups.  This should help alleviate some of the branding concerns.  However, Starbucks had long been more than just coffee.  While it’s true that Starbucks gave birth to the premium coffee industry, Starbucks is not just a product but a brand.

Premium coffee was not just about the bean that was used.  After all, before Starbucks, there were already a cottage industry of premium coffee brewing in the city of Seattle.  Starbucks was successful because it had a vision how to deliver of that premium coffee to the masses.  That was the “Third Place” principal:  Starbucks offered you an option outside of your home and your office.  Some used this “third place” to relax, other used it for work.  Starbucks offered not just a drink, but a culture.  Over the year, Starbucks had expanded into food, merchandises, and most notably music.  Now, the trick is not to deviate too far away from it’s heart and soul – coffee.

There was another recent logo update that removed the category:  MTV.  MTV chose to remove the words “Music Television” from the logo a while back.  In addition, it offered the real estate on the logos to feature the latest reality stars.  There were quite a bit of backlash that the network had walked away from its core and moved to the latest fad.

Starbucks in Beijing

The lesson for Starbucks is to move with caution, lest risk alienating your core.

There is another theory that the removal of the words.  On one hand, a wordless logo offers flexibility on categories.  On the other hand, a wordless logo also offers flexibility on countries.  As this photo illustrates, aboard, the Starbucks logo is overshadowed by the name itself (which are the characters.  The characters read Starbucks Coffee).  In order to build a successful brand, one must have full control of the branding and the communication hierarchy.  Removing the English name from the logo allows the company better control on how to incorporate the name into its branding in different countries.  A smart move for a company with global ambitions

So perhaps Starbucks has no intention of walking away from its core, after all.

Photo credit:  Logos via Adage.com.  ®/™ Trademarks owned by Starbucks Corporation and MTV Networks respectively.  Beijing picture by Achim Hepp.

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