By Vikram Vasisht
In 2000 Unilever’s then Chairman Niall Fitzgerald laid down an ambitious 5 year restructuring plan popularly known as “Path to Growth”. The targets sets were high, first a 5% growth rate for its leading brands and secondly, to make them accountable for 95% of total Unilever’s revenues. To achieve this Unilever decided to chop down its rich stable of 1600 brands to 400 core or popularly called as power brands. The entire restructuring was going to take around five years with managers given clear directions to focus on core and growth oriented brands and shed the remaining (remember in India under Chairman Mr Vindi Bhanga strategy HLL’s 110 brands were down to 36 power brands). Steps taken as a part of “Path to growth” plan-
1. Cutting down on brands and manufacturing cost- Unilever saved about €4 billion ($4.9 billion) in costs over the past five years as it reduced its portfolio of brands from 1,600 to some 450 over a period of 5 years.
2. Restructuring Levers culture and reward system- After the buyout of Bestfoods its integration with current Levers business was important. Levers reenergized the enterprise culture, in terms of reviewing there own leadership group. About 40% of workforce was changed. The new work force was supposed to be more risk takers, more business-builders, people who have a passion for growth. Much more emphasis is laid on real delivery and performance. Levers moved to one of the most aggressive reward systems in terms of being skewed toward performance.
3. Exiting the American bakery market- As a part of radical restructuring, $2 billion were raised from the sale of Levers American bakery business and some European food brands. The sales were as a part of a condition imposed by European regulators after Unilever's acquisition of Bestfoods for $21.3 billion in 2000.
The plan impressed everyone initially even the numbers were positives for first few quarters but the final picture is a dismal one. Though Levers saved about €4 billion ($4.9 billion) in costs over the past five years and reduced its portfolio of brands substantially. Last year sales were down by 6% and operating profits slipped by 9%. In September 2004 came the group's first ever warning that it would not deliver a promised increase in profits and to add to there woes there leading brand grew by a mere 0.9% far short of targeted 5-6%. Analysts feel more than changing business environment it’s the missed opportunities in Unilevers strategy which is responsible for this situation.
4. Division of Levers into HPC and Food- April 2004 as a desperate effort Chairman Niall Fitzgerald went against his plans and reorganized Levers into two division Home and Personnel Care(HPC) and Food divisions in order to quicken the decision making process.
Chairman Niall FitzGerald, 58, who had a tough time restructuring Unilever, left the Unilever to head British news and information company Reuters. In keeping with tradition, Unilever PLC picked up an insider to fill the spot. Patrick Cescau, a 55-year-old director of the firm's global foods division, took over the helm in September 05 and marked the end of “Path to growth” at the same time started his own restructuring process so as to revive the growth for which Unilever is known for. Firstly let’s look at the factors which made the air hot for Unilever
Missed Opportunities
1. Advertising Misfit- Many think that the main problem is under-investment in advertising and marketing, an infatuation with brands and unattractive product. Unilever cut its ad and marketing expenditure at the worst moment. Commoditized products were vulnerable to the onslaught of retailers' own brands. In many instances, retailers' own brands now capture as much as one-fifth of the market. Unilever also over-extended some successful brands, for instance Bertolli's olive oils and pasta sauces. The firm spends 14.5% of its revenues on advertising, which is more than the 12% spent by Nestlé, the world's biggest food firm, but far less than the 20% that P&G splashes out on promoting its products. The problem also lies in the way that the company spends its advertising budget. It sacrificed longer-term advertising on television and other media for short-term promotions in an effort to stem its loss of market share which backfired.
2. Lack of Innovation- Unilevers Management obsession with sales number has taken yet another toll. Everyone in the company during “Path to Growth” was so busy with growth, sales etc that they overlooked innovation in there brands and which where there rivals knocked them. For e.g. P&G, it continues to gain share in lucrative spots: It has 70% of the tooth-whitening market, up from 57% a year ago, and 48% of disposable diapers, vs. 45% a year ago. The key behind P&G success is renewed creativity. Since the new agency took over in 2000, P&G has shown a savvy knack for innovation. From its Swiffer mop to battery-powered Crest SpinBrush toothbrushes and Whitestrip tooth whiteners, P&G has simply done a better job than rivals at coming up with new products that consumer crave -- and, not incidentally, on which it can earn higher margins than it can on its more mature lines. In the last three years P&G has updated all of its 200 brands and created whole new product categories -- such as Mr. Clean AutoDry Carwash -- that have added $2 billion in sales. The company is launched its Crest Vanilla Mint toothpaste during an episode of The Apprentice. The focus of the show was on the contestants' plans for marketing the toothpaste. During a 15-second spot, viewers were invited to visit Crest.com, where they wrote that how they would have handled the marketing job. An extremely new and innovative concept which did indeed did well.
Antony Burgmans, Chairman
M.S. (Vindi) Bhanga, president (foods)
CFO Rudy Markham
HR chief Sandy Ogg
Harish Manwani, President (Asia-Africa)
Patrick Cescau, CEO
Kees Van Der Graaf, president (Europe)
John Rice, president (Americas)
Ralph Kugler, president (HPC)3. Low Carb Diet craze untapped- Unilever needs to do a better job of managing its brands like Slim-Fast. In June 2003, it was believed in Unilevers that low-carb diets were a fad and were going to go away. Slim-Fast products traditionally included foods such as shakes and meal bars that serve as low-calorie -- but not necessarily low-carbohydrate -- alternatives to regular food. This calculation misfired and company was left behind with serious catching up to do. As a result Slim-Fast's global sales dropped by nearly 30%. At the end of last year, Unilever rolled out five low-carb Slim-Fast products. It was this move that brought some respite to Slim-Fast a move which can be vindicated by the fact that about 20% of slim fast’s revenue is from Low –Carb drinks. It has, however, been too slow to introduce new products.
4. Poor performance of Fragrance Division- Unilevers Prestige fragrance division which sells Calvin Klein Obsession, Eternity, cK, and other designer names were to slow to offer variety and get newer products in the market. On the contrary other companies were quicker to launch more products. It is believed that with fragrances, consumers are on to new things very quickly. These twin problems with Slim-Fast and fragrances have hit Unilever particularly hard in North America. Marketing the scents became tougher, as consumers became more selective in their discretionary spending.
5. Complex Organizational Structure- Levers follows a 75 year old practice of having two chairmen, one in London and one in Rotterdam. This meant complex management structure to with overlapping accountability and slow decision-making.
6. Less dispensing of dividend to shareholders arising negative sentiments
7. Volume driven growth giving way to margin driven growth as more focus was on profits and growth. This meant short term profits but hindered long term sustainable growth as it was seen world over in various Levers offices.
Business Environment
1. Competitive Heat- Yet most analysts agree that the P&G-Gillette merger is likely to make the climate even tougher for Unilever in the consumer-products business. Notably, the bulked up P&G will have more leverage to bargain with large retailers such as Wal-Mart, although in the short-term P&G may be distracted by its own consolidation it still is not a healthy sign for Levers.
2. Store Special Brand- Unilever often has to fight for market share with increasingly popular store-specific value brands, which fill the shelves of Europe's "hard discounters". With less spending on advertisement meant low brand value of a product, consumers often flocked to cheap store brand. As a result In Europe, which a FMCG business was fluctuating commodity prices which put pressure on the margins.
3. Unrealistic performance target- Many people believe it’s the unrealistic performance target which Levers has set for itself responsible for its bad shape. A moderate 3% growth would have been a practical target rather than 5-6%.
Soon after Patrick Cescau the new chairman took over in September 2004, he himself has revamped the Levers operation. Calling an end to “Path to Growth” he has restructured the organizational structure toward volume driven company from margin driven.
Change in leadership structure- The Anglo-Dutch giant had a unique dual-chairman structure that is; it had two Chairmen one in based in London and the other in Rotterdam. The Rotterdam office was lead by Antony Burgmans while the Unilevers London chairman was Patrick Cescau. In May 2005 it was changed to a more conventional form of a chairman and CEO model. Antony Burgmans became chairman and Patrick Cescau took charge as CEO. The objective of this exercise is simplicity of structure and clarity of leadership. The streamlined focus would bring better focus, accountability and will quicken the decision making time. Antony Burgmans would be the non executive chairman and it would be mainly Cescau job to steer Unilever into growth. One of the first steps taken by Cescau is towards companies’ unification popularly known as One Unilever. Cescau has been trying to transform it into a more global organization under the One Unilever programme. The idea is to ensure that Unilever is able to leverage its scale fully - something that it hasn’t done in the past. This will ensure that Unilever is in a better position to negotiate with it suppliers and big buyers (retailers) like Wal-Mart and others. Nobody in US knew that Unilever is a ten-billion dollar company because they had separate businesses (in UK, Holland and US). As a result of One Unilever they can establish this image of theirs especially when competitors like P&G have taken consolidated by acquiring Gillette.
The new restructured Unilever has 8 independent executive directors including CEO who will be responsible for there respective divisions. Out of eight directors two of them are Indians which just reinstates the respect which Indians command in Levers.
Renewed Advertising Strategy- As pointed earlier Levers failure to innovate and misdirected advertisements have hurt them badly. Taking a cue from this experience of theirs Unilever and their ad agencies are innovating and downgrading the importance of the 30-second TV spot. The target set for their many new products is between 18-25 years. Unilever believes that if it can create compelling entertainment on the Net and in game venues where guys spend time, it can foster brand loyalty. They are also going beyond the 30-second TV commercial to create a deeper bond with our guy. Their offering include streaming video, plus downloads to cell phones and Sony PlayStations this summer, a video game, blogs, and chartrooms and others.
Restructuring in HLL
Amidst the entire upheaval HLL Unilevers Indian subsidiary is undergoing its own revamping. The power brand strategy under then chairman VS Bhanga didn’t deliver as expected. Mr. Harish Marwani took over from Mr. VS Bhanga. HLL in early 2004 was divided into two divisions namely Home and Personnel Care and Food division both having there own managing director. Last month, HLL announced that Douglas Baillie, group vice-president and head, Unilever (Africa, Middle East and Turkey), will take over as its new CEO and managing director with effect from March 2006. Reversing a split that happened in 2004, HLL's dual-business structure (the home and personal care or HPC division, and the foods division) will now have Baillie as the man in charge. Arun Adhikari, managing director, HPC, was deputed chairman, Unilever Japan (with responsibility for Korea). S. Ravindranath, managing director of the foods division, will retire soon. As far as for Mr. Marwani is concerned he moves on to become president Unilevers Asia-Africa at the same time continuing as the non executive chairman here in India. Baillie's India appointment and Adhikari's move to Japan (the two countries together account for roughly 28 per cent of Unilever's Asia-Africa turnover) were both orchestrated by Manwani. Both will report directly to him, and increasingly, they will be key players in his regional gameplan. During the period of 2000-2010 it is expected that consumer spending is going to increase by $14.4 trillion, of which Asia-Africa is expected to bring in $8.6 trillion which vindicates the importance of this region for Unilever.
Carrying forward One Unilever will benefit as this would mean HLL would be one company and not two businesses or two divisions. They can also use their scale across the board, so that might of HLL can be leverage. Whether they sell Annapurna Salt or Dove soap, might of HLL in every one of these activities can be used. Also part of the interdependent Unilever and take advantage of all the global innovations. One of the distinct competitive advantage for Unilever is that they operate through out the pyramid whether it penetration driven (lower end), volume driven (middle class) or innovation driven (high end upper class user). It is clear that new management has brought in new style of strategy which now revolves around volumes and not profits. Management is willing to give managers time to build brands and wait for profits. Consolidation of ailing brands is of prime importance before deciding on their future unlike the time from 1999-2004 when they were disposed of without giving second thought. The performance of Marwani and his team would be closely monitored for his future in Unilevers as many feel he is an ideal person to replace Patrick Cescau.
Friday, March 31, 2006
The evolving face of digital entertainment
By Mrunmay Mehta
Whether it’s a 3G mobile handset, the iPod, or the Xbox, digital entertainment has long evolved from the primordial form of the fixed TV-Radio routine. With the internet playing a large role in deciding the course of entertainment, spurious unpredicted factors like the runaway success of the Apple iPod and the cult forming there from, one thing is for certain-there exists a huge opportunity for digital media management/providing companies, and the key to this market would be innovation and ease of use. With mobility increasingly becoming a part of lifestyle, entertainment on the move also will assume much greater importance, and already mobile phones are available with processing power that exceeds some of the recently used computing systems.This article tries to discuss a few recent news making happenings in the digital entertainment industry.
Interactive Television:
Imagine being able to turn your television on, pick the program you want to see from your customized pre-recorded list, pull up an on-screen menu to check the latest weather and stock quotes, instant-message a friend, order pizza from your remote control, and book your next vacation, all without leaving your couch. Welcome to the world of interactive television. The idea of having consumers actively engage in the television experience isn't new. After all, shopping channels like QVC have turned viewer-to-buyer conversion into a science.
Cable and satellite systems have greatly increased the number of channels available to consumers, and pay-per-view (PPV), where viewers use the telephone to rent access to certain programs, is a fixture at most hotels. In an effort to drive traffic to the Internet, television-show hosts often exhort viewers to log on to web sites and take companion surveys, enter sweepstakes and download recipes. More recently, the spotlight has been on personal video recording (PVR) technology, which is offered by devices like TiVo and SONICBlue's ReplayTV. These products take the VCR one step further, offering hard-disk-based recording of favorite programs, pause-and-rewind capabilities for live television, and the ability to skip commercials during playback. In Europe and elsewhere, satellite system providers such as BSkyB and Canal Satellite are offering enhanced features, including t-commerce applications, to their customers. By connecting their set-top box to their phone line, viewers can access e-mail, shop, bank, place bets, and more. Many providers are also experimenting with video-on-demand (VOD), which allows consumers to request and view content whenever they want without having to record it first.
Indeed, several entertainment companies have filed suit against SONICBlue, claiming that the ad-skipping technology in the ReplayTV device violates content-providers' copyright. Five users, assisted by the Electronic Frontier Foundation, have countered by filing a suit against the entertainment companies, seeking to affirm their right to use their ReplayTV boxes to skip advertising and digitally record content. Show Me the Money Television can certainly influence consumers to buy products (Home Shopping Network and QVC are examples of success in that arena), but exactly how much commerce can be integrated into entertainment remains to be seen. Imagine a scenario where two consumer households are watching the same program. The young, single professional sees ads for a sports car, while the family with two children sees ads for a minivan. This is something advertisers have not been able to do before. The technical feasibility of this, is being proven in a trial currently being conducted by SpotOn, a joint effort by ACTV, Motorola and Wink, on an AT&T system. Historically, we have been used to the idea of program flow, and entire schedules of shows are created with the idea of people continuously watching the lineup. The idea of flow is now changing. The network may become more of a brand that the consumer turns to just to consider which programs are worth adding to his personal schedule. If people are cherry-picking programs that way, they might not go to their local stations at all. Interactive TV also poses questions on a societal level. We have society-making media (shared media which enable movement of people and ideas across groups) and segment-making media (media which crystallizes people's sense of belonging to a niche). In a world dominated by niche media, it is increasingly possible to drill down only into areas that you care about, and dwell on particularistic interest groups, often excluding your neighbors. It's a form of electronic gating. You can create or change programming based on whom you're targeting. What does it mean to have a society in which the shared experience becomes less and less common? How will the brave new world of interactive television change society? Tune in at a later date to find out.
The Digital Living Room
When Microsoft introduced its long-awaited Xbox 360 console on May 12 in an MTV special, its intentions went beyond just fun and games, The company called the long-awaited product a "future-generation game and entertainment system. "While Xbox 360 promises to offer video games compatible with HDTV, fast processing and a lot of memory, Microsoft also noted that the system can play DVDs and CDs, stream music from MP3 players, and network with the company's "Media Center" PCs to stream digital content around the house, among other tasks. Microsoft's market: The increasingly crowded living room. In fact, the parade of technology companies targeting home entertainment is a long one. Dell Computer sells TVs. Apple Computer's iMac Mini is viewed by analysts as a potential entertainment server. Media-ready PCs abound from the likes of Hewlett-Packard. These technology stalwarts are selling wares that were typically offered by consumer electronic giants such as Sony. But do they have what it takes to compete in your living room? Is the so-called digital living room -- in which audio and visual content is available on demand and combined with Internet and other applications in one seamless environment -- fact or fantasy? Who will the winners ultimately be?
The vision of the digital living room isn't new. Some form of it has been pitched for decades. Interactive TV was introduced in the 1980s. Microsoft created a digital home as a prototype in 1994 and has dabbled with everything from WebTV to game systems. The digital living room "vision" has evolved to a level where content of all forms is delivered according to highly personalized specifications along with Internet service on one box -- a kind of home entertainment server. Indeed, many components of the digital living room are in place today. Video-on-demand service is available through most cable providers. Music and video can be pumped through computer networks wirelessly. Televisions and computers are largely made from similar components. Gaming devices can play DVDs and connect to the Internet.
Problems? Well, these devices don’t play well together as of now. Just like companies that have a hard time connecting various hardware and software platforms, consumers who try to go digital with all of their entertainment will have integration issues. Meanwhile, many devices don't play nicely together. Apple's iPod songs don't play on the Windows Media player, and vice versa. In most cases, a Sony TV can't communicate automatically with home PCs. And then there's the conundrum around having separate boxes for every entertainment function-- music, digital video recording, DVD players and the like. Standards are just being formed, but there are turf wars as players such as Microsoft, Sony and Comcast jockey for position. The problem is compounded by another fact: Consumer electronics product cycles take along time. A television could last 15 years compared to a PC that maybe replaced in four years. That means the latest technology takes a long time to reach television sets.
Meanwhile, Fader says the whole concept of the digital living room needs other things to fall into place first. For instance, broadband penetration needs to be at100% for consumers to get audio, video and web access pumped into their home networks. Nevertheless, the living room gadgets keep coming. Whether these gadgets collect dust or become dominant will rest on one thing -- ease of use.
So what makes the idea of the digital living room so appealing to technology suppliers? According to experts, it's a matter of extending brands to grow sales and revenue. If a company like Microsoft can dominate the living room, its software could be everywhere in every facet of life. A company like Dell can take the same parts it uses for displays to manufacture and sell televisions. The other appeal of branching out to more consumer products is the so-called "halo effect" – the Holy Grail that Apple is pursuing with success. By selling iPods, Apple has managed to sell more of its other products such as its iMac. For the fiscal second quarter that ended on March 26, Apple reported net income of $290 million, compared to $46 million a year ago. Apple shipped 5,311,000 iPods during the quarter, up 558% from a year ago. The iPod's success also had an effect on the shipments of Apple's Macintosh computers. Apple shipped 1,070,000 computers in the quarter, up 43% from a year ago. "Apple is firing on all cylinders," said Steve Jobs, Apple's CEO, in a press release. Indeed, Apple offers a host of components that could eventually be used to create a digital living room. The company that can piece together a digital living room and offer customers all the entertainment they want in any format will be the big winner.
Podcasting: Can This New Medium Make Money? For whom?
Podcasting, a way to broadcast audio over the Internet, has become the latest web movement to get everyone's attention. Including Apple Computer CEO Steve Jobs, who recently called it "the next generation of radio". On June 28, Apple announced that it had integrated podcasts into the latest version of iTunes software so that users can manage and receive these new kinds of broadcasts. It's a logical move. After all, the podcast moniker stuck partially because of the popularity of the iPod, although most of these broadcasts are produced in a format that can be played on music players using the MPEG-1 Audio Layer-3, or MP3, audio compression format. Podcasting can also apply to video broadcasts, but audio dominates for now. The actual content on podcasts is a mix of amateur broadcasters -- waxing poetic about everything from global warming to venture capital to ice hockey – and media giants that are repurposing existing shows. The market for podcasts is growing quickly. A survey by the Pew Internet & American Life Project found that more than six million people out of the 22 million who own iPods or MP3 players have listened to a podcast. Such activity begs the question: Is pod casting here to stay? Experts at Wharton and analysts who follow the market answer with a resounding yes. As to whether a business model emerges for these broadcasts, observers suggest that advertising and subscription revenues may eventually come into play. Apple, for example, could begin serving as a guide to pod casts and sell a few more iPods in the process. "A lot of the attention has been overdone, but pod casting is not going away," says Wharton marketing professor Peter Fader. "It will continue to grow and resources will be thrown at it. Some will do podcasting well and be rewarded for it."
Regardless of how predictions pan out, the way media is consumed is rapidly changing. Podcasting for audio does what Tivo does for watching television: Entertainment is consumed on your schedule. Experts predict that "media consumption will be routinely time shifted." Indeed, time shifting is the most important aspect of podcasting, but the traditional broadcasters may be up to the challenge. Podcasting has gained momentum quickly because the average American can create a show easily and everyone wants to be a celebrity. But podcasting is becoming increasingly mainstream as big media players jump in too. With the low barriers to entry, some stations can make podcasting an intern task.For Apple, podcasts now provide more content to populate the company's iTunes and iPod products, says Fader. However, longer term it's possible that podcasting will require some kind of paid subscription. The catch is that Apple hasn't focused on subscriptions, choosing to sell songs through iTunes and generating hardware sales as consumers gobble up the iPod. “Apple could find itself in a tough spot," experts suggest, adding that pod casting could push along the subscription model for music and audio distribution, something that Apple hasn't trumpeted. To be sure, Apple mitigated future risks by tightly integrating podcasts into iTunes in late June 05, but it is noted that you don't necessarily need an iPod to get a podcast. Indeed, analysts expect Microsoft and Real Networks to offer guides to podcasting in the near future. Podcasting is a boon for Apple if it sells more iPods, but it's also a threat to Apple's control of the platform. If you use your portable music device mostly to hear non-commercial or retransmitted podcasts, what do you need Apple for? Hence, the inventor himself stands to lose out from his creation
Whether it’s a 3G mobile handset, the iPod, or the Xbox, digital entertainment has long evolved from the primordial form of the fixed TV-Radio routine. With the internet playing a large role in deciding the course of entertainment, spurious unpredicted factors like the runaway success of the Apple iPod and the cult forming there from, one thing is for certain-there exists a huge opportunity for digital media management/providing companies, and the key to this market would be innovation and ease of use. With mobility increasingly becoming a part of lifestyle, entertainment on the move also will assume much greater importance, and already mobile phones are available with processing power that exceeds some of the recently used computing systems.This article tries to discuss a few recent news making happenings in the digital entertainment industry.
Interactive Television:
Imagine being able to turn your television on, pick the program you want to see from your customized pre-recorded list, pull up an on-screen menu to check the latest weather and stock quotes, instant-message a friend, order pizza from your remote control, and book your next vacation, all without leaving your couch. Welcome to the world of interactive television. The idea of having consumers actively engage in the television experience isn't new. After all, shopping channels like QVC have turned viewer-to-buyer conversion into a science.
Cable and satellite systems have greatly increased the number of channels available to consumers, and pay-per-view (PPV), where viewers use the telephone to rent access to certain programs, is a fixture at most hotels. In an effort to drive traffic to the Internet, television-show hosts often exhort viewers to log on to web sites and take companion surveys, enter sweepstakes and download recipes. More recently, the spotlight has been on personal video recording (PVR) technology, which is offered by devices like TiVo and SONICBlue's ReplayTV. These products take the VCR one step further, offering hard-disk-based recording of favorite programs, pause-and-rewind capabilities for live television, and the ability to skip commercials during playback. In Europe and elsewhere, satellite system providers such as BSkyB and Canal Satellite are offering enhanced features, including t-commerce applications, to their customers. By connecting their set-top box to their phone line, viewers can access e-mail, shop, bank, place bets, and more. Many providers are also experimenting with video-on-demand (VOD), which allows consumers to request and view content whenever they want without having to record it first.
Indeed, several entertainment companies have filed suit against SONICBlue, claiming that the ad-skipping technology in the ReplayTV device violates content-providers' copyright. Five users, assisted by the Electronic Frontier Foundation, have countered by filing a suit against the entertainment companies, seeking to affirm their right to use their ReplayTV boxes to skip advertising and digitally record content. Show Me the Money Television can certainly influence consumers to buy products (Home Shopping Network and QVC are examples of success in that arena), but exactly how much commerce can be integrated into entertainment remains to be seen. Imagine a scenario where two consumer households are watching the same program. The young, single professional sees ads for a sports car, while the family with two children sees ads for a minivan. This is something advertisers have not been able to do before. The technical feasibility of this, is being proven in a trial currently being conducted by SpotOn, a joint effort by ACTV, Motorola and Wink, on an AT&T system. Historically, we have been used to the idea of program flow, and entire schedules of shows are created with the idea of people continuously watching the lineup. The idea of flow is now changing. The network may become more of a brand that the consumer turns to just to consider which programs are worth adding to his personal schedule. If people are cherry-picking programs that way, they might not go to their local stations at all. Interactive TV also poses questions on a societal level. We have society-making media (shared media which enable movement of people and ideas across groups) and segment-making media (media which crystallizes people's sense of belonging to a niche). In a world dominated by niche media, it is increasingly possible to drill down only into areas that you care about, and dwell on particularistic interest groups, often excluding your neighbors. It's a form of electronic gating. You can create or change programming based on whom you're targeting. What does it mean to have a society in which the shared experience becomes less and less common? How will the brave new world of interactive television change society? Tune in at a later date to find out.
The Digital Living Room
When Microsoft introduced its long-awaited Xbox 360 console on May 12 in an MTV special, its intentions went beyond just fun and games, The company called the long-awaited product a "future-generation game and entertainment system. "While Xbox 360 promises to offer video games compatible with HDTV, fast processing and a lot of memory, Microsoft also noted that the system can play DVDs and CDs, stream music from MP3 players, and network with the company's "Media Center" PCs to stream digital content around the house, among other tasks. Microsoft's market: The increasingly crowded living room. In fact, the parade of technology companies targeting home entertainment is a long one. Dell Computer sells TVs. Apple Computer's iMac Mini is viewed by analysts as a potential entertainment server. Media-ready PCs abound from the likes of Hewlett-Packard. These technology stalwarts are selling wares that were typically offered by consumer electronic giants such as Sony. But do they have what it takes to compete in your living room? Is the so-called digital living room -- in which audio and visual content is available on demand and combined with Internet and other applications in one seamless environment -- fact or fantasy? Who will the winners ultimately be?
The vision of the digital living room isn't new. Some form of it has been pitched for decades. Interactive TV was introduced in the 1980s. Microsoft created a digital home as a prototype in 1994 and has dabbled with everything from WebTV to game systems. The digital living room "vision" has evolved to a level where content of all forms is delivered according to highly personalized specifications along with Internet service on one box -- a kind of home entertainment server. Indeed, many components of the digital living room are in place today. Video-on-demand service is available through most cable providers. Music and video can be pumped through computer networks wirelessly. Televisions and computers are largely made from similar components. Gaming devices can play DVDs and connect to the Internet.
Problems? Well, these devices don’t play well together as of now. Just like companies that have a hard time connecting various hardware and software platforms, consumers who try to go digital with all of their entertainment will have integration issues. Meanwhile, many devices don't play nicely together. Apple's iPod songs don't play on the Windows Media player, and vice versa. In most cases, a Sony TV can't communicate automatically with home PCs. And then there's the conundrum around having separate boxes for every entertainment function-- music, digital video recording, DVD players and the like. Standards are just being formed, but there are turf wars as players such as Microsoft, Sony and Comcast jockey for position. The problem is compounded by another fact: Consumer electronics product cycles take along time. A television could last 15 years compared to a PC that maybe replaced in four years. That means the latest technology takes a long time to reach television sets.
Meanwhile, Fader says the whole concept of the digital living room needs other things to fall into place first. For instance, broadband penetration needs to be at100% for consumers to get audio, video and web access pumped into their home networks. Nevertheless, the living room gadgets keep coming. Whether these gadgets collect dust or become dominant will rest on one thing -- ease of use.
So what makes the idea of the digital living room so appealing to technology suppliers? According to experts, it's a matter of extending brands to grow sales and revenue. If a company like Microsoft can dominate the living room, its software could be everywhere in every facet of life. A company like Dell can take the same parts it uses for displays to manufacture and sell televisions. The other appeal of branching out to more consumer products is the so-called "halo effect" – the Holy Grail that Apple is pursuing with success. By selling iPods, Apple has managed to sell more of its other products such as its iMac. For the fiscal second quarter that ended on March 26, Apple reported net income of $290 million, compared to $46 million a year ago. Apple shipped 5,311,000 iPods during the quarter, up 558% from a year ago. The iPod's success also had an effect on the shipments of Apple's Macintosh computers. Apple shipped 1,070,000 computers in the quarter, up 43% from a year ago. "Apple is firing on all cylinders," said Steve Jobs, Apple's CEO, in a press release. Indeed, Apple offers a host of components that could eventually be used to create a digital living room. The company that can piece together a digital living room and offer customers all the entertainment they want in any format will be the big winner.
Podcasting: Can This New Medium Make Money? For whom?
Podcasting, a way to broadcast audio over the Internet, has become the latest web movement to get everyone's attention. Including Apple Computer CEO Steve Jobs, who recently called it "the next generation of radio". On June 28, Apple announced that it had integrated podcasts into the latest version of iTunes software so that users can manage and receive these new kinds of broadcasts. It's a logical move. After all, the podcast moniker stuck partially because of the popularity of the iPod, although most of these broadcasts are produced in a format that can be played on music players using the MPEG-1 Audio Layer-3, or MP3, audio compression format. Podcasting can also apply to video broadcasts, but audio dominates for now. The actual content on podcasts is a mix of amateur broadcasters -- waxing poetic about everything from global warming to venture capital to ice hockey – and media giants that are repurposing existing shows. The market for podcasts is growing quickly. A survey by the Pew Internet & American Life Project found that more than six million people out of the 22 million who own iPods or MP3 players have listened to a podcast. Such activity begs the question: Is pod casting here to stay? Experts at Wharton and analysts who follow the market answer with a resounding yes. As to whether a business model emerges for these broadcasts, observers suggest that advertising and subscription revenues may eventually come into play. Apple, for example, could begin serving as a guide to pod casts and sell a few more iPods in the process. "A lot of the attention has been overdone, but pod casting is not going away," says Wharton marketing professor Peter Fader. "It will continue to grow and resources will be thrown at it. Some will do podcasting well and be rewarded for it."
Regardless of how predictions pan out, the way media is consumed is rapidly changing. Podcasting for audio does what Tivo does for watching television: Entertainment is consumed on your schedule. Experts predict that "media consumption will be routinely time shifted." Indeed, time shifting is the most important aspect of podcasting, but the traditional broadcasters may be up to the challenge. Podcasting has gained momentum quickly because the average American can create a show easily and everyone wants to be a celebrity. But podcasting is becoming increasingly mainstream as big media players jump in too. With the low barriers to entry, some stations can make podcasting an intern task.For Apple, podcasts now provide more content to populate the company's iTunes and iPod products, says Fader. However, longer term it's possible that podcasting will require some kind of paid subscription. The catch is that Apple hasn't focused on subscriptions, choosing to sell songs through iTunes and generating hardware sales as consumers gobble up the iPod. “Apple could find itself in a tough spot," experts suggest, adding that pod casting could push along the subscription model for music and audio distribution, something that Apple hasn't trumpeted. To be sure, Apple mitigated future risks by tightly integrating podcasts into iTunes in late June 05, but it is noted that you don't necessarily need an iPod to get a podcast. Indeed, analysts expect Microsoft and Real Networks to offer guides to podcasting in the near future. Podcasting is a boon for Apple if it sells more iPods, but it's also a threat to Apple's control of the platform. If you use your portable music device mostly to hear non-commercial or retransmitted podcasts, what do you need Apple for? Hence, the inventor himself stands to lose out from his creation
Thursday, March 23, 2006
A revolution called blogging
By Ahmed Faiyaz
Blogs and BloggingChoose one of the following options: Technology has improved my life; it sets me free. Or, technology has harmed my quality of life; it enslaves me. Chances are you may want to reply, "All of the above." In recent years, the Internet itself has been evolving as weblogs or blogs become more and more of a trusted social medium. Blogging is a tool for users as they try to deal with a changing technology landscape where the problem is no longer how to get more information from one person to another but how to constrain that flood of information, how to deliver and receive more meaningful and contextual information for you and your business.
Typically, a blog (a contraction of Weblog) is created with easy-to-use software that streamlines the process of creating and updating a professional-looking Web page, giving users a low-cost platform from which to express their thoughts on a particular subject. Written material made available on a blog is called a post and can be linked easily to other information on the Web, such as other blogs, a company Web site, news articles, photo images, or video and audio files. This allows information on a blog to be indexed and swiftly accessed by popular search engines such as Google or Yahoo and disseminated far more quickly—and, in some instances, far more prominently—than other, more traditional forms of corporate communications.
Glenn Reid, CEO of FiveAcross, an innovator in communication software for networks, agreed. "As the blizzard of information has increased, we have all been trying to find a filter, editorial oversight as it were. That happens in blogs. If I like the blogger's point of view, I follow his or her recommendations. Connecting people to one another can be a solution."
Because traditional media platforms are closed to most of us, "these new channels offer tremendous opportunities for commercial programmers as well as for universities, companies and 'us'," said Jeremy Allaire, president of Brightcove, a new online service for distribution of TV over the Internet.
As with any opportunity, new channels also bring new challenges. "Media of any kind act as amplifiers for ideas of individuals; it's all about power," said Chandratillake. "With power comes danger. For example, two weeks ago we got a submission from the BNP, the largest anti-immigration party in the UK. Here we are now amplifying the message of an organization that would have thrown me out of England at age three."
In a world where everybody can broadcast, where everything is reported, there are problems, agreed Marc Canter of Ourmedia.org, a non-profit whose goal is to make it easy for the public to publish digital media. "But, that also means there will be more often be multiple views of events. For example, police behavior will be reported on by more than just those in the traditional media. No one source can control our view of an event. That's a tremendous positive."
More can indeed be better, especially if the content is better than the "58 hours a week of mind-numbing entertainment some people watch each week on TV," agreed Mike Homer, head of Open Media Network, a new, free public service for the mass viewing and publishing of content on the web, much of it educational. "We want to reinvent public broadcasting. We intend to accelerate content creation and audience growth, as well as harness the community to help organize, rate and rank offerings. It's an entirely new landscape for rich media delivery.
Growing Popularity
Recently, blogs have been credited with everything from CBS News anchorman Dan Rather's departure, to unauthorized previews of the latest Apple Computer products, to new transparency in presidential campaigns. The big question is whether blogs, short for weblogs, have the staying power to become more than just online diaries. Will bloggers upend the mainstream media? What legal protections should bloggers have? Is there a blogger business model?
However the growth rate of blogs is impressive. Technorati, a search engine that monitors blogs, tracked more than 8 million online diaries as of March 21, up from 100,000 just two years ago. A new blog is created every 7.4 seconds. That adds up to 12,000 new blogs a day, 275,000 posts a day and 10,800 updates an hour. At its most basic level, it's a technology that is lowering the cost of publishing and turning out to be the next extension of the web, blogging is still in its early days. It's analogous to where the web was in 1995 and 1996. It's not clear how it will turn out.
The opportunity
What is clear is that opportunities for blogging abound. Companies can use bloggers to put a more human face on interactions with employees and customers; marketers can create buzz through blogs; and bloggers can act as fact checkers for the mainstream media. There are dozens of applications for blogs, Werbach notes, and many that haven't even been conceived yet. To be sure, the concepts behind blogging aren't exactly new. Comment and feedback have been around as long as the Internet itself. What's new is the ease with which anyone can publish their thoughts on any number of topics, whether it's the latest Congressional hearings, the newest gadget or the hottest pair of shoes.
The amateur content movement was clearly enabled by the Internet, which made it relatively easy for anyone to start a web site. Some of those early sites peddled Pez dispensers and antiques (eBay) while others were just directories pointing to other sites (Yahoo). From there, the concept of amateur content has ballooned. In South Korea, for example, a newspaper dubbed ohmynews.com is written, not by trained journalists, but by regular citizens who send in their reports to editors, who then pick the best ones for publication. Companies and individuals have created their own Internet sites offering original information and content. Other sites, like the technology news-oriented Slashdot, are populated by visitors posting items they have seen elsewhere.
The Blogosphere's Rathergate
For now, blogging is much like the web sites of the mid-1990s -- lots of drivel, some useful items and plenty of opinions on every topic.
Today's blogs are mostly associated with politics -- not surprising given that former presidential candidate Howard Dean used blogs to rally supporters. Blogs detailing the documents that CBS used to question President Bush's National Guard service were picked apart by bloggers, who pointed out font differences in the documents and thus raised questions about their authenticity. The scandal, known in the "blogosphere" as Rathergate, ultimately resulted in the anchorman's departure. On the other side of the political spectrum, bloggers detailed Senator Trent Lott's glowing comments in 2002 about Strom Thurmond's presidential run in 1948 during which he supported segregation. A few apologies later, Lott gave up a bid to be the Senate majority leader.
The danger of overtly political blogs is one of selective hearing. If there's a blog for every taste, readers will just flock to sites they agree with. Fader adds that the marketplace of ideas and readers will weed out bloggers who are on the fringe and peddle bad information; they just won't develop an audience. In the future a technology may be created to rate credible bloggers. The system, which would operate like eBay's buyer and seller ratings, could create a blogger pecking order based on readers' opinions.
In the meantime, the courts are trying to figure out whether the First Amendment's freedom of the press protections apply to bloggers. Are bloggers journalists? It's a tricky question. For instance, some bloggers are de facto journalists -- because they do interviews, file news stories and provide opinions on current events -- and others are just regular people writing about their most recent family vacations. The courts will ultimately have to develop a legal test to extend press privileges, if necessary. According to Hunter, determining what will shake out in the courts is anyone's guess. It's hard to say where this will go legally however courts will ultimately give press credentials to a select group of bloggers.
For now, the disputes over press protections continue. Apple Computer recently sued a site called Think Secret for publishing information about upcoming products. Apple alleges that by publishing the data, Think Secret divulged trade secrets. Should Think Secret be treated as a journalism site? The issue spawned a host of blog entries and even a blogger boycott of Apple. The lesson: Apple can use the courts to try to stop product leaks, but the effort is likely to be futile. Indeed, a Technorati search turned up a blog revealing mockups of an iPad, a tablet PC-like device
The whole blogger-as-journalist issue also raises another key issue: Is the mainstream media about to be usurped by a bunch of amateurs? Yes and no. The mainstream media worries about blogging just as they initially did about Matt Drudge, who created a tabloid-style news site that features a few stories penned by Drudge but mostly links to other media outlets.
Blogging has already adopted a similar role of chasing tips, rumors and other potential stories. It's a threat to the mainstream media to the extent that it takes away central control of content and distribution, but "it's not a substitute for the resources and brands that media companies have developed." What's likely is that the mainstream media and blogosphere will share a happy coexistence, he adds. Indeed, bloggers often comment on, and provide links to, articles in The New York Times and other mainstream media.
Whether bloggers supplant the press will depend on their skillfulness, for commentary, bloggers' opinions are just as good as commentary printed in newspapers. However, investigative journalism will still be the hallmark of the media. First-hand reporting will be the distinction between blogging and journalism. It's a good idea to read both blogs and mainstream news. A blogger in Iraq can detail things on the ground that journalists often can't.... Bloggers are viewed more as fact checkers to keep the media honest. The challenge for mainstream media is to keep up with bloggers' speed.
Overall, media angst over blogs is misplaced. The idea that blogging will kill media is as overblown as when they said that e-commerce would kill the retailing business.
The Voice of Microsoft in Siberia
Media navel gazing is one blogger preoccupation, but another development has been the use of weblogs by companies and organizations. The "danger" is that corporations might not "understand the culture of blogging" and produce content that contains carefully vetted material instead of spontaneous writings that appeal to blog fans. Indeed, corporations are allowing employees to keep blogs, and in many cases encouraging online diaries. Microsoft, Sun Microsystems, General Motors and Boeing are just some of the companies that use blogs to communicate with employees and outsiders.
Robert Scoble, a Microsoft employee who operates Scobleizer, a blog about Microsoft products and developments, maintains one of the more interesting blogs around. Scoble, whose official title is "technical evangelist," sounds like many employees at large companies. He has his share of gripes, but will also defend his employer. The key is that he is balanced, says Brown. "This Microsoft employee has to maintain credibility by remaining transparent. By being negative once in a while, it's more credible when he's positive."
Scoble is so credible as a Microsoft blogger that he is viewed as the voice of the company across the globe. When Ted Demopoulos, principal of Demopoulos Associates, an information technology consulting company, was traveling in Russia recently, he stopped in Surgut, Siberia, where he was surprised to find Scoble fans. "I'm out in the middle of nowhere and they ask me about Scoble," says Demopoulos. "To them, Scoble is the voice of Microsoft."
Is There a Business Model?
While corporations can chalk up blogging as a marketing expense, the story is a little different for individuals. Can blogging pay the bills? If you are lucky, you can pay the hosting fees, but that's about it. Nevertheless, Experts predict that multiple business models will emerge. Individuals ages 18-25 are spending more of their time online, and marketers need to reach them. That means blogging could become a way to target the most coveted audience for media.
Bloggers currently can sell ads through a keyword system such as Google's Adsense. If an individual writes a blog about asbestos lawsuits, he or she is bound to get significant traffic from lawyers. And that could lead to subscription models. Some bloggers may become so successful that they can charge for their output. The rub with the subscription approach is that it's not clear if anyone will pay for content beyond financial news, data and pornography, says Fader. The other model is one that depends on being acquired, adds Demopoulos. Google bought Blogger.com, and media companies such as Gawker Media are buying and consolidating popular blogs.
What happens when bloggers try to make money off their sites? It's not a matter of when bloggers want to be paid, but when do readers want to pay for content. The mainstream media hasn't had the guts or savvy to start charging. It will be difficult for bloggers.
The business opportunity
Selling out to and joining mainstream media. This is what Andrew Sullivan did. Although "selling out" in this instance means handing over the technical headaches of operating his site to Time.com while retaining editorial control and accepting a regular paycheck. "Andrew Sullivan," the brand is subsumed into Time.com's, bolstering the latter. "I like to think of it as a moment when the blogosphere and the (mainstream media) made touchdown," Sullivan told the press.
Selling out while staying independent. Calacanis has managed to do this with Weblogs Inc. since selling his company to AOL last month for a reported $25 million. "The things that have changed are all on the backend," he wrote in the aftermath of Gawker's Yahoo (Research) deal. "With AOL's support we can hire more bloggers, promote the blogs, sell more advertising, and ultimately pay bloggers more money. That's the basic concept behind the deal: scaling the business." AOL gained a fresh portfolio of brands and a geyser of traffic against which to sell ads. The synergies are invisible.
Syndicate and partner while holding fast to the brands. Nick Denton at Gawker Media is building brands. To that end, he turned to syndication -- first with VNU overseas and now Yahoo -- to bolster traffic and penetrate the mainstream without selling out.
The Blog Conglomerate (the Federated Model). This is John Battelle's approach. His soon-to-launch FM Publishing network will combine the brand-oriented aspect of Denton's approach with Calacanis' focus on back-end synergies. FM Publishing will become the hub for a loose conglomerate of A-list bloggers whose combined traffic will start to reach a critical mass. But there are no editorial synergies between the diffuse blogs in the portfolio
Fit to print? The last addition to this list is a blogger federation that harvests its best thoughts, jokes and criticisms for recombination in another medium. Rather than build a business on the back of a hub site, why not have a team of editors painlessly extract and repurpose the collective intelligence of a blogging network in exchange for final approval and a share of the profits? Imagine an editorial supply chain where content begins life in a blog and is then reprocessed as needed by new layers of editors, producers, etc. To an extent, Yahoo has done just that with Gawker's syndication (and about a billion other sources). But why stop at recombining them within another Web site? Why not a magazine? Or any other medium that advertisers are willing to pay for? As it happens, that's exactly what Tony Perkins has done with Always On, where the repurposed punditry of his techie members has spawned a 100,000-circulation quarterly magazine aimed at an audience that missed reading it the first time
Blogging & Corporate America
Over the last twelve months, business leaders have grudgingly, warily, come to realize that blogging is a force that must be used—or at least accounted for—in their communications strategies. Companies are increasingly using blogs to communicate to both internal and external audiences. But blogs have also become a thorn in the side of these very same companies—witness the many vitriolic blogs posted by former employees and disgruntled customers. Corporate America may fear critical comments in public blogs, but it isn't ignoring the medium's potential for improving internal communication.The numbers are downright puny. According to The Fortune 500 Business Blogging Wiki (a list of blogs provided by employees about their companies and products), only 22 of the 500 largest U.S. companies operate public blogs from their executive suites. That amounts to a measly 4.4%. Has the blogging sensation passed corporations by?
Not by a long shot. Instead of public blogs, think about blog technology. That's the focus for many leading companies around the world. From McDonald's (MCD) to Cannondale Bicycle, corporations are using the software to revamp internal communications, reach out to suppliers, and remake corporate Intranets. Often the site doesn't look much different from what it's replacing. Sometimes there's nothing particularly bloggy about the results.But these corporate initiatives are interactive and cheap to deploy -- making them an attractive form of communication. "Blogs are a way to bring our knowledge together," says Dave Weick, chief information officer at McDonald's.Conversation Pieces. Over the last month, Cannondale has opened its corporate Web site to 15 of its sales and marketing staffers. Each one now has the tools to file his or her own updates, press releases, photos, and news about the race teams Cannondale sponsors, says Janet Maurice, the company's Webmaster.It may not seem like they're blogging. They're simply using software to send information. Sometimes they do it from remote Internet cafés. In time, they'll be able to file from cell phones. But each mailing, technically, is a blog post. And the program will expand to a host of Cannondale staffers and affiliates. "We're transferring our corporate content management system to blogs," Maurice says.Why are blogs supplanting traditional corporate Intranets? They're a snap to set up, and cheap to run. That's why the blog universe -- as counted by Technorati, the leading blog search engine -- has tripled to 27 million in the last year. They dwarf the number of personal Web pages, which require more technical expertise. What's more, blogs are designed to change daily and -- importantly -- to receive comments from the public. This means that while traditional corporate Intranets are static, blogs generate conversation.Extra Value. The first corporate blogger at McDonald's was Chief Operating Officer Michael Roberts, who launched his internal blog last fall. He used it to spread information through the company's global operations and receive feedback. Now, according to Weick, McDonald's is distributing blog access to thousands of employees, who will use them to report on operations at restaurants worldwide.The question at McDonald's and Cannondale is whether they'll extend blogs outside the company, to their customers. Already, newspapers such as the Houston Chronicle are building communities of bloggers, which provide new sources of information -- and new advertising platforms.Robin Hopper, CEO of iUpload, the Toronto-based outfit that hosts the McDonald's and Cannondale blogs, predicts that growing numbers of companies will distribute blogs in an effort to build social networks around their brands and products. "It's a whole new way to market," he says. "People willingly provide all sorts of demographic information on blogs." Companies can then use that to target them with customized services and advertisements.Building Trust. Hopper says that media and entertainment outfits are already sprouting blogs by the thousands. For example, the TV show Canadian Idol, the cousin of Fox's American Idol, provides a blog to every potential contestant.They use them to post their bios and pictures -- which provide material for the show's producers. Fans can also post on www.idolblogs.ca, a blogging community that has reached 40,000, says Hopper.Could Cannondale follow suit? Not so fast, warns Maurice. "With every great technology comes the fear that it might go out of control," she says. So she's launching Cannondale's blogging program cautiously, starting with brand managers and their teams. Later it will extend from so-called trusted bloggers, whose posts go up on the site automatically, to "untrusted bloggers," whose submissions must be edited. Everyone's A Critic. Companies interested in opening up branded blogs to the broad public face plenty of risks. Opponents of the company could use them to spread criticisms or nasty rumors -- and the host outfit would face the wrath of bloggers if it were seen to shut down or censor customers' entries. Conversely, if criticism appears on the blogs, the company can learn quickly and respond. For such giants as Wal-Mart (WMT) and McDonald's -- both subjects of blistering documentaries recently -- such an early warning system might prove to be worth the gamble
Blogging for Market Research
The Blogosphere is a vast, unruly, and totally tantalizing mother lode of unvarnished consumer opinion on every product and service in the capitalist universe. But to know what the masses are saying about your product, you would have to dig through 350,000 fresh daily postings on a staggering 20 million blogs worldwide (90% of them are based in the U.S.). And that's just the beginning. Roughly 50,000 new blogs are launched every day.
Let's say you're still determined to find out how your new gizmo is being received. You could hire a couple of teenagers to Google the product name all day and compile a digest of all the blog citations. But they would probably end up with a vast amount of material, particularly for mass-market products such as a new line of blue jeans or brand of ice cream. And it would be difficult to draw meaningful conclusions from the quotes because bloggers don't always reveal basic information about themselves (such as their age and gender).
Enter Umbria, a market research firm in Boulder that designs software to find useful consumer intelligence on the Internet. "The blogosphere is overflowing with brutally honest opinion," says Howard Kaushansky, Umbria's 47-year-old CEO. "Our goal is to track those opinions down."
Every few hours Umbria (http://www.umbrialistens.com) sends an application called a spider out over the web to scour the blogosphere for postings about the firm's clients, most of which are big consumer companies, such as Electronic Arts, SAP, and Sprint. By analyzing keywords in blogs, Umbria can classify each citation thematically. In the case of Sprint, for example, Umbria's software can tell whether a blogger is talking about customer service, the company's advertisements, or a particular calling plan.
Another big challenge is to decipher what's on a blogger's mind. To figure out whether an opinion is strong or tepid, for example, it helps to know that "awesome" is a stronger endorsement than "pretty cool," and that "shoddy" is less damning than "abominable." Umbria has several employees with Ph.D.s in linguistics and artificial intelligence who are forever tweaking the software to make it better at categorizing opinions.
Kaushansky claims his software can even identify sarcasm, a useful skill in the prickly blogosphere. Consider this statement: "The Treo 650 is the greatest phone in the world ... NOT!" Umbria's language-parsing software is "trained" to classify that and other common sarcastic turns of phrase as negative sentiments about the client. "Sarcasm is difficult for people to pick up, let alone machines," says Kaushansky. "But it's very valuable from a market research standpoint because it tells you how a customer really feels."
The software can also estimate the author's age and gender. Elongated spellings ("soooooooo"), multiple exclamation marks (!!!), and acronyms such as POS ("parent over shoulder") suggest a teenage female member of Generation Y (born after 1979). The blogger is probably a teenage boy if a posting is rife with hip-hop terminology such as "aight" (translation: "all right") and "true dat" ("I agree!").
The twenty- and thirty-something members of Generation X are more likely to use complete sentences. Gen X men also tend to favor satiric jibes and vivid adjectives such as "sordid" and "hilarious." Gen X women favor elaborately emotive turns of phrase, such as "wishing I could just crawl out of my skin and go on without it" (a real example). Male baby-boomers, on the other hand, tend to favor stale hip-hop-isms such as "jiggy" and "bling." They also pepper their blogs with terms such as "prostate" and "IRA."
Umbria's service is warp-speed quick. It usually takes less than a minute for the spider to crawl through those 20 million blogs. That's followed by a few additional minutes spent running linguistic algorithms on any relevant blog entries. Then out spits an "Umbria Buzz Report" that tells clients how they are being portrayed in the blogosphere. The reports cover the overall brand experience, along with consumer reactions to specific products and even specific features of those products. Umbria also tallies the number of comments, classifies all of them by estimated age and gender, and gauges whether blog sentiment is skewing positive or negative. In its reports, available weekly or monthly, Umbria always makes a point of reproducing a few of the juiciest blog postings verbatim (see the box above).
Bloggers are often early adopters of products and services, according to Kaushansky, and they tend to be more fervent and expansive in their opinions than the general population. Clients say Umbria's service helps them discern attitudes that may not show up for months using traditional market-research tools such as surveys and focus groups. Working on behalf of U.S. Cellular (http://www.uscc.com), for example, Umbria trawled the blogosphere and provided an early read that teens were especially anxious about exceeding their calling-plan minutes. The reason: They worried that their parents might charge them for overages.
Buzz Reports are infinitely customizable. Umbria can gauge the response to a specific product launch or an advertising campaign. The service is also useful for gathering intelligence on competitors. Izze Beverage (http://www.izze.com), a 45-employee Boulder company that makes sparkling fruit juices, recently engaged Umbria to track what bloggers were saying about rival brands. The exercise was a revelation, according to CEO Todd Woloson. When a blogger had a bad fruit juice experience with one of his competitors, the result was often a profane online rant. "We want to make sure that never happens to us," says Woloson. The company recently hired a customer relations specialist that it hopes will soothe angry consumers before they take to their blogs.
Umbria is a relatively small player in the $20 million blog research market, with a 10% share. Principal rivals include Cincinnati-based Intelliseek (http://www.invisible.com), which controls about a third of the market, and BuzzMetrics in New York, which does not disclose revenues. The latter two companies also crawl the blogosphere on behalf of corporate clients. But Umbria's solution is entirely software-based. Kaushansky's competitors also meet with clients to interpret the data and suggest strategic responses. "Ultimately we rely on both technology and humans for analysis," says Max Kalehoff, marketing director for BuzzMetrics. "Umbria takes an extremely automated approach."
Automation is the source of Umbria's competitive edge: affordability. Companies pay roughly $60,000 a year for its service. By contrast, the fee to engage one of its rivals can easily run into the seven figures. Kaushansky intends to maintain Umbria's low-cost and no-consultants strategy. The company's next frontier: algorithms that will classify bloggers by ethnicity, location, income, social class, and level of education.
GM and blogging
When Bob Lutz, the vice chairman of product development at General Motors, wants to get quick feedback from consumers on the company's latest product launch, new strategy, or something as specific as the quality of the sheet-metal fits on the latest Chevrolet, he knows where to go: his corporate blog, http://fastlane.gmblogs.com/.
Lutz is among a small but growing number of corporate executives who have started to experiment with blogs—Web-based commentary sites usually written in a first-person, conversational manner—to connect with customers online and advance corporate communications and marketing goals.
There are sixty-plus blogs produced by large corporations—and many more if, for example, you count the approximately 2,000 individual blogs written by Sun Microsystems employees that are then aggregated into one group blog at http://www.blogs.sun.com/. Besides General Motors and Sun Microsystems, companies that encourage blogging activity include The Boeing Company, Google, Hewlett-Packard, IBM, Microsoft, Red Hat, Edelman, Stonyfield Farm, and Yahoo. These blogs are part of a constantly expanding blogosphere that, as of the end of 2004, had some 32 million readers, according to the Pew Internet & American Life Project.
What Lutz and other executives recognize is that a blog is an incredibly effective yet low-cost way to:
· Influence the public "conversation" about your company: Make it easy for journalists to find the latest, most accurate information about new products or ventures. In the case of a crisis, a blog allows you to shape the conversation about it.
· Enhance brand visibility and credibility: Appear higher in search engine rankings, establish expertise in industry or subject area, and personalize one's company by giving it a human voice.
· Achieve customer intimacy: Speak directly to consumers and have them come right back with suggestions or complaints—or kudos.
How bloggers connectBloggers are somewhat like constantly circulating guests at a very large cocktail party: They don't all talk directly with one another, but each of them talks to many others, thus forming a richly interlinked network. According to David Sifry, founder and CEO of blog-focused search engine Technorati, there are almost 18 million blogs, spanning over one and a half billion links.
Technically, conversations among bloggers can occur in two ways. Blogging software can be configured to allow blog visitors to post a comment that others visiting the blog can also view. The GM FastLane blog featuring Lutz's comments is a corporate site that invites visitors to post their thoughts as well.
Other corporate sites do not permit posts from outsiders but do communicate on a blog-to-blog basis using various tools (such as the search engines Technorati, PubSub, and Google Blog Search) that allow users to monitor what is being said about themselves or their blog in cyberspace. These corporate blogs, like the vast majority of other blogs out there, use RSS (for real simple syndication) feeds, a tool that allows people to subscribe to blogs and thus be notified when the blogger has posted something new.
"If you are going to do a blog, you should always have an RSS feed of your own, which then allows people to subscribe to your publication," says Tim Bray, director of Web technologies at Sun Microsystems.
Take a lead in the conversationThis ability to engage with others is what gives blogs their power. "Blogs are all about conversations," says Sifry. A corporate blog allows a company both to keep an ear to the ground to hear what's being said about it and, if necessary, speak up with a correction.
"If you're not blogging, you're missing out on the chance to contribute to the conversation taking place in the blogosphere," says consultant Debbie Weil, creator of the BlogWrite for CEOs blog (http://www.blogwriteforceos.com/) and author of The Corporate Blogging Book (forthcoming in 2006 from Penguin/Portfolio).
You're also missing out on the chance to reach the journalists who write about your company for more traditional media outlets: a Euro RSCG Magnet and Columbia University Survey of the Media in 2005 found that 51 percent of journalists view blogs regularly.
Boost credibility and get closer to customersNot surprisingly, many of the early adopters of blogs have been technology companies eager to leverage blogs' ability to position a company executive for recognition as an expert in a given industry or on a specific topic. With his blog, Jonathan Schwartz, the president and COO of Sun Microsystems, has established himself (blogs.sun.com/jonathan) as a thought leader on issues pertinent to computer operating systems.
"Blogs allow us to get our message out to the world in a direct, unmediated, and unfiltered way," Bray says. Bray, who has been blogging since February of 2003 on tech-related topics, says that blogging allows Sun to write things that "are read directly by people in the software development community without being filtered by journalists and analysts."
He adds that a more subtle benefit is the fact that the blogging by Schwartz and many other employees has made it apparent to the world that Sun is not a faceless corporate monolith but a community of people who are passionate about software and information technology, and eager to engage with customers. He mentions one instance when a blog reader was trying to figure out how to obtain a type of software licensing approval from Sun. Several employee bloggers volunteered to assist, says Bray, and "they put the problem on a quick path to resolution.
Blog Pulse
here are many sites such as daypop.com and blogdex.com that can tell you what subjects are hot in the blogging world. And that's invaluable information if you've just released a new product and want to see what the world—or at least the part of the world that is online—is saying about it.
What we particularly like about BlogPulse, which is produced by Intelliseek, is its ability to graphically pinpoint blog news to specific time periods. So let's say Apple wants to look at blog mentions of its recently released Tiger operating system. Steve Jobs would enter those terms into the BlogPulse search bar. When the results are displayed, he would click the “Trend this Search” icon at the top of the list. This produces a chart that shows blog activity by date. You can click on the peaks to see what the buzz was that day. In this case, the big news was around the April 29 launch date, but you can also see more blog mentions generated on June 6, when the Apple-Intel relationship was announced.
This information will not only give you links to specific content about your product generated around the Web, but also provide a view into what specifically generates interest in your product or company.
Conclusion
Blogging is not a fad, it's the rise of amateur content, which is replacing the centralized, controlled content done by professionals. While most agree that blogging will continue to be popular, its next steps are uncertain. Blogging overexposure is on the horizon. Right now, blogging is trendy, I see that lasting a few years, but it will slow down. Blogging is here to stay, as many sites start to incorporate blogging features, and some news sites become more blog-like. The blogosphere will also become known for topics other than technology and politics. Two things are certain: Blogging will remain disruptive to the traditional media, and new uses will surface. You are going to see blogging move to video and instant messaging. It's just the beginning.
Sources:
HBS Articles, Knowledge @ Wharton, Cover stories on blogging in Fortune, CNN and Business Week
Blogs and BloggingChoose one of the following options: Technology has improved my life; it sets me free. Or, technology has harmed my quality of life; it enslaves me. Chances are you may want to reply, "All of the above." In recent years, the Internet itself has been evolving as weblogs or blogs become more and more of a trusted social medium. Blogging is a tool for users as they try to deal with a changing technology landscape where the problem is no longer how to get more information from one person to another but how to constrain that flood of information, how to deliver and receive more meaningful and contextual information for you and your business.
Typically, a blog (a contraction of Weblog) is created with easy-to-use software that streamlines the process of creating and updating a professional-looking Web page, giving users a low-cost platform from which to express their thoughts on a particular subject. Written material made available on a blog is called a post and can be linked easily to other information on the Web, such as other blogs, a company Web site, news articles, photo images, or video and audio files. This allows information on a blog to be indexed and swiftly accessed by popular search engines such as Google or Yahoo and disseminated far more quickly—and, in some instances, far more prominently—than other, more traditional forms of corporate communications.
Glenn Reid, CEO of FiveAcross, an innovator in communication software for networks, agreed. "As the blizzard of information has increased, we have all been trying to find a filter, editorial oversight as it were. That happens in blogs. If I like the blogger's point of view, I follow his or her recommendations. Connecting people to one another can be a solution."
Because traditional media platforms are closed to most of us, "these new channels offer tremendous opportunities for commercial programmers as well as for universities, companies and 'us'," said Jeremy Allaire, president of Brightcove, a new online service for distribution of TV over the Internet.
As with any opportunity, new channels also bring new challenges. "Media of any kind act as amplifiers for ideas of individuals; it's all about power," said Chandratillake. "With power comes danger. For example, two weeks ago we got a submission from the BNP, the largest anti-immigration party in the UK. Here we are now amplifying the message of an organization that would have thrown me out of England at age three."
In a world where everybody can broadcast, where everything is reported, there are problems, agreed Marc Canter of Ourmedia.org, a non-profit whose goal is to make it easy for the public to publish digital media. "But, that also means there will be more often be multiple views of events. For example, police behavior will be reported on by more than just those in the traditional media. No one source can control our view of an event. That's a tremendous positive."
More can indeed be better, especially if the content is better than the "58 hours a week of mind-numbing entertainment some people watch each week on TV," agreed Mike Homer, head of Open Media Network, a new, free public service for the mass viewing and publishing of content on the web, much of it educational. "We want to reinvent public broadcasting. We intend to accelerate content creation and audience growth, as well as harness the community to help organize, rate and rank offerings. It's an entirely new landscape for rich media delivery.
Growing Popularity
Recently, blogs have been credited with everything from CBS News anchorman Dan Rather's departure, to unauthorized previews of the latest Apple Computer products, to new transparency in presidential campaigns. The big question is whether blogs, short for weblogs, have the staying power to become more than just online diaries. Will bloggers upend the mainstream media? What legal protections should bloggers have? Is there a blogger business model?
However the growth rate of blogs is impressive. Technorati, a search engine that monitors blogs, tracked more than 8 million online diaries as of March 21, up from 100,000 just two years ago. A new blog is created every 7.4 seconds. That adds up to 12,000 new blogs a day, 275,000 posts a day and 10,800 updates an hour. At its most basic level, it's a technology that is lowering the cost of publishing and turning out to be the next extension of the web, blogging is still in its early days. It's analogous to where the web was in 1995 and 1996. It's not clear how it will turn out.
The opportunity
What is clear is that opportunities for blogging abound. Companies can use bloggers to put a more human face on interactions with employees and customers; marketers can create buzz through blogs; and bloggers can act as fact checkers for the mainstream media. There are dozens of applications for blogs, Werbach notes, and many that haven't even been conceived yet. To be sure, the concepts behind blogging aren't exactly new. Comment and feedback have been around as long as the Internet itself. What's new is the ease with which anyone can publish their thoughts on any number of topics, whether it's the latest Congressional hearings, the newest gadget or the hottest pair of shoes.
The amateur content movement was clearly enabled by the Internet, which made it relatively easy for anyone to start a web site. Some of those early sites peddled Pez dispensers and antiques (eBay) while others were just directories pointing to other sites (Yahoo). From there, the concept of amateur content has ballooned. In South Korea, for example, a newspaper dubbed ohmynews.com is written, not by trained journalists, but by regular citizens who send in their reports to editors, who then pick the best ones for publication. Companies and individuals have created their own Internet sites offering original information and content. Other sites, like the technology news-oriented Slashdot, are populated by visitors posting items they have seen elsewhere.
The Blogosphere's Rathergate
For now, blogging is much like the web sites of the mid-1990s -- lots of drivel, some useful items and plenty of opinions on every topic.
Today's blogs are mostly associated with politics -- not surprising given that former presidential candidate Howard Dean used blogs to rally supporters. Blogs detailing the documents that CBS used to question President Bush's National Guard service were picked apart by bloggers, who pointed out font differences in the documents and thus raised questions about their authenticity. The scandal, known in the "blogosphere" as Rathergate, ultimately resulted in the anchorman's departure. On the other side of the political spectrum, bloggers detailed Senator Trent Lott's glowing comments in 2002 about Strom Thurmond's presidential run in 1948 during which he supported segregation. A few apologies later, Lott gave up a bid to be the Senate majority leader.
The danger of overtly political blogs is one of selective hearing. If there's a blog for every taste, readers will just flock to sites they agree with. Fader adds that the marketplace of ideas and readers will weed out bloggers who are on the fringe and peddle bad information; they just won't develop an audience. In the future a technology may be created to rate credible bloggers. The system, which would operate like eBay's buyer and seller ratings, could create a blogger pecking order based on readers' opinions.
In the meantime, the courts are trying to figure out whether the First Amendment's freedom of the press protections apply to bloggers. Are bloggers journalists? It's a tricky question. For instance, some bloggers are de facto journalists -- because they do interviews, file news stories and provide opinions on current events -- and others are just regular people writing about their most recent family vacations. The courts will ultimately have to develop a legal test to extend press privileges, if necessary. According to Hunter, determining what will shake out in the courts is anyone's guess. It's hard to say where this will go legally however courts will ultimately give press credentials to a select group of bloggers.
For now, the disputes over press protections continue. Apple Computer recently sued a site called Think Secret for publishing information about upcoming products. Apple alleges that by publishing the data, Think Secret divulged trade secrets. Should Think Secret be treated as a journalism site? The issue spawned a host of blog entries and even a blogger boycott of Apple. The lesson: Apple can use the courts to try to stop product leaks, but the effort is likely to be futile. Indeed, a Technorati search turned up a blog revealing mockups of an iPad, a tablet PC-like device
The whole blogger-as-journalist issue also raises another key issue: Is the mainstream media about to be usurped by a bunch of amateurs? Yes and no. The mainstream media worries about blogging just as they initially did about Matt Drudge, who created a tabloid-style news site that features a few stories penned by Drudge but mostly links to other media outlets.
Blogging has already adopted a similar role of chasing tips, rumors and other potential stories. It's a threat to the mainstream media to the extent that it takes away central control of content and distribution, but "it's not a substitute for the resources and brands that media companies have developed." What's likely is that the mainstream media and blogosphere will share a happy coexistence, he adds. Indeed, bloggers often comment on, and provide links to, articles in The New York Times and other mainstream media.
Whether bloggers supplant the press will depend on their skillfulness, for commentary, bloggers' opinions are just as good as commentary printed in newspapers. However, investigative journalism will still be the hallmark of the media. First-hand reporting will be the distinction between blogging and journalism. It's a good idea to read both blogs and mainstream news. A blogger in Iraq can detail things on the ground that journalists often can't.... Bloggers are viewed more as fact checkers to keep the media honest. The challenge for mainstream media is to keep up with bloggers' speed.
Overall, media angst over blogs is misplaced. The idea that blogging will kill media is as overblown as when they said that e-commerce would kill the retailing business.
The Voice of Microsoft in Siberia
Media navel gazing is one blogger preoccupation, but another development has been the use of weblogs by companies and organizations. The "danger" is that corporations might not "understand the culture of blogging" and produce content that contains carefully vetted material instead of spontaneous writings that appeal to blog fans. Indeed, corporations are allowing employees to keep blogs, and in many cases encouraging online diaries. Microsoft, Sun Microsystems, General Motors and Boeing are just some of the companies that use blogs to communicate with employees and outsiders.
Robert Scoble, a Microsoft employee who operates Scobleizer, a blog about Microsoft products and developments, maintains one of the more interesting blogs around. Scoble, whose official title is "technical evangelist," sounds like many employees at large companies. He has his share of gripes, but will also defend his employer. The key is that he is balanced, says Brown. "This Microsoft employee has to maintain credibility by remaining transparent. By being negative once in a while, it's more credible when he's positive."
Scoble is so credible as a Microsoft blogger that he is viewed as the voice of the company across the globe. When Ted Demopoulos, principal of Demopoulos Associates, an information technology consulting company, was traveling in Russia recently, he stopped in Surgut, Siberia, where he was surprised to find Scoble fans. "I'm out in the middle of nowhere and they ask me about Scoble," says Demopoulos. "To them, Scoble is the voice of Microsoft."
Is There a Business Model?
While corporations can chalk up blogging as a marketing expense, the story is a little different for individuals. Can blogging pay the bills? If you are lucky, you can pay the hosting fees, but that's about it. Nevertheless, Experts predict that multiple business models will emerge. Individuals ages 18-25 are spending more of their time online, and marketers need to reach them. That means blogging could become a way to target the most coveted audience for media.
Bloggers currently can sell ads through a keyword system such as Google's Adsense. If an individual writes a blog about asbestos lawsuits, he or she is bound to get significant traffic from lawyers. And that could lead to subscription models. Some bloggers may become so successful that they can charge for their output. The rub with the subscription approach is that it's not clear if anyone will pay for content beyond financial news, data and pornography, says Fader. The other model is one that depends on being acquired, adds Demopoulos. Google bought Blogger.com, and media companies such as Gawker Media are buying and consolidating popular blogs.
What happens when bloggers try to make money off their sites? It's not a matter of when bloggers want to be paid, but when do readers want to pay for content. The mainstream media hasn't had the guts or savvy to start charging. It will be difficult for bloggers.
The business opportunity
Selling out to and joining mainstream media. This is what Andrew Sullivan did. Although "selling out" in this instance means handing over the technical headaches of operating his site to Time.com while retaining editorial control and accepting a regular paycheck. "Andrew Sullivan," the brand is subsumed into Time.com's, bolstering the latter. "I like to think of it as a moment when the blogosphere and the (mainstream media) made touchdown," Sullivan told the press.
Selling out while staying independent. Calacanis has managed to do this with Weblogs Inc. since selling his company to AOL last month for a reported $25 million. "The things that have changed are all on the backend," he wrote in the aftermath of Gawker's Yahoo (Research) deal. "With AOL's support we can hire more bloggers, promote the blogs, sell more advertising, and ultimately pay bloggers more money. That's the basic concept behind the deal: scaling the business." AOL gained a fresh portfolio of brands and a geyser of traffic against which to sell ads. The synergies are invisible.
Syndicate and partner while holding fast to the brands. Nick Denton at Gawker Media is building brands. To that end, he turned to syndication -- first with VNU overseas and now Yahoo -- to bolster traffic and penetrate the mainstream without selling out.
The Blog Conglomerate (the Federated Model). This is John Battelle's approach. His soon-to-launch FM Publishing network will combine the brand-oriented aspect of Denton's approach with Calacanis' focus on back-end synergies. FM Publishing will become the hub for a loose conglomerate of A-list bloggers whose combined traffic will start to reach a critical mass. But there are no editorial synergies between the diffuse blogs in the portfolio
Fit to print? The last addition to this list is a blogger federation that harvests its best thoughts, jokes and criticisms for recombination in another medium. Rather than build a business on the back of a hub site, why not have a team of editors painlessly extract and repurpose the collective intelligence of a blogging network in exchange for final approval and a share of the profits? Imagine an editorial supply chain where content begins life in a blog and is then reprocessed as needed by new layers of editors, producers, etc. To an extent, Yahoo has done just that with Gawker's syndication (and about a billion other sources). But why stop at recombining them within another Web site? Why not a magazine? Or any other medium that advertisers are willing to pay for? As it happens, that's exactly what Tony Perkins has done with Always On, where the repurposed punditry of his techie members has spawned a 100,000-circulation quarterly magazine aimed at an audience that missed reading it the first time
Blogging & Corporate America
Over the last twelve months, business leaders have grudgingly, warily, come to realize that blogging is a force that must be used—or at least accounted for—in their communications strategies. Companies are increasingly using blogs to communicate to both internal and external audiences. But blogs have also become a thorn in the side of these very same companies—witness the many vitriolic blogs posted by former employees and disgruntled customers. Corporate America may fear critical comments in public blogs, but it isn't ignoring the medium's potential for improving internal communication.The numbers are downright puny. According to The Fortune 500 Business Blogging Wiki (a list of blogs provided by employees about their companies and products), only 22 of the 500 largest U.S. companies operate public blogs from their executive suites. That amounts to a measly 4.4%. Has the blogging sensation passed corporations by?
Not by a long shot. Instead of public blogs, think about blog technology. That's the focus for many leading companies around the world. From McDonald's (MCD) to Cannondale Bicycle, corporations are using the software to revamp internal communications, reach out to suppliers, and remake corporate Intranets. Often the site doesn't look much different from what it's replacing. Sometimes there's nothing particularly bloggy about the results.But these corporate initiatives are interactive and cheap to deploy -- making them an attractive form of communication. "Blogs are a way to bring our knowledge together," says Dave Weick, chief information officer at McDonald's.Conversation Pieces. Over the last month, Cannondale has opened its corporate Web site to 15 of its sales and marketing staffers. Each one now has the tools to file his or her own updates, press releases, photos, and news about the race teams Cannondale sponsors, says Janet Maurice, the company's Webmaster.It may not seem like they're blogging. They're simply using software to send information. Sometimes they do it from remote Internet cafés. In time, they'll be able to file from cell phones. But each mailing, technically, is a blog post. And the program will expand to a host of Cannondale staffers and affiliates. "We're transferring our corporate content management system to blogs," Maurice says.Why are blogs supplanting traditional corporate Intranets? They're a snap to set up, and cheap to run. That's why the blog universe -- as counted by Technorati, the leading blog search engine -- has tripled to 27 million in the last year. They dwarf the number of personal Web pages, which require more technical expertise. What's more, blogs are designed to change daily and -- importantly -- to receive comments from the public. This means that while traditional corporate Intranets are static, blogs generate conversation.Extra Value. The first corporate blogger at McDonald's was Chief Operating Officer Michael Roberts, who launched his internal blog last fall. He used it to spread information through the company's global operations and receive feedback. Now, according to Weick, McDonald's is distributing blog access to thousands of employees, who will use them to report on operations at restaurants worldwide.The question at McDonald's and Cannondale is whether they'll extend blogs outside the company, to their customers. Already, newspapers such as the Houston Chronicle are building communities of bloggers, which provide new sources of information -- and new advertising platforms.Robin Hopper, CEO of iUpload, the Toronto-based outfit that hosts the McDonald's and Cannondale blogs, predicts that growing numbers of companies will distribute blogs in an effort to build social networks around their brands and products. "It's a whole new way to market," he says. "People willingly provide all sorts of demographic information on blogs." Companies can then use that to target them with customized services and advertisements.Building Trust. Hopper says that media and entertainment outfits are already sprouting blogs by the thousands. For example, the TV show Canadian Idol, the cousin of Fox's American Idol, provides a blog to every potential contestant.They use them to post their bios and pictures -- which provide material for the show's producers. Fans can also post on www.idolblogs.ca, a blogging community that has reached 40,000, says Hopper.Could Cannondale follow suit? Not so fast, warns Maurice. "With every great technology comes the fear that it might go out of control," she says. So she's launching Cannondale's blogging program cautiously, starting with brand managers and their teams. Later it will extend from so-called trusted bloggers, whose posts go up on the site automatically, to "untrusted bloggers," whose submissions must be edited. Everyone's A Critic. Companies interested in opening up branded blogs to the broad public face plenty of risks. Opponents of the company could use them to spread criticisms or nasty rumors -- and the host outfit would face the wrath of bloggers if it were seen to shut down or censor customers' entries. Conversely, if criticism appears on the blogs, the company can learn quickly and respond. For such giants as Wal-Mart (WMT) and McDonald's -- both subjects of blistering documentaries recently -- such an early warning system might prove to be worth the gamble
Blogging for Market Research
The Blogosphere is a vast, unruly, and totally tantalizing mother lode of unvarnished consumer opinion on every product and service in the capitalist universe. But to know what the masses are saying about your product, you would have to dig through 350,000 fresh daily postings on a staggering 20 million blogs worldwide (90% of them are based in the U.S.). And that's just the beginning. Roughly 50,000 new blogs are launched every day.
Let's say you're still determined to find out how your new gizmo is being received. You could hire a couple of teenagers to Google the product name all day and compile a digest of all the blog citations. But they would probably end up with a vast amount of material, particularly for mass-market products such as a new line of blue jeans or brand of ice cream. And it would be difficult to draw meaningful conclusions from the quotes because bloggers don't always reveal basic information about themselves (such as their age and gender).
Enter Umbria, a market research firm in Boulder that designs software to find useful consumer intelligence on the Internet. "The blogosphere is overflowing with brutally honest opinion," says Howard Kaushansky, Umbria's 47-year-old CEO. "Our goal is to track those opinions down."
Every few hours Umbria (http://www.umbrialistens.com) sends an application called a spider out over the web to scour the blogosphere for postings about the firm's clients, most of which are big consumer companies, such as Electronic Arts, SAP, and Sprint. By analyzing keywords in blogs, Umbria can classify each citation thematically. In the case of Sprint, for example, Umbria's software can tell whether a blogger is talking about customer service, the company's advertisements, or a particular calling plan.
Another big challenge is to decipher what's on a blogger's mind. To figure out whether an opinion is strong or tepid, for example, it helps to know that "awesome" is a stronger endorsement than "pretty cool," and that "shoddy" is less damning than "abominable." Umbria has several employees with Ph.D.s in linguistics and artificial intelligence who are forever tweaking the software to make it better at categorizing opinions.
Kaushansky claims his software can even identify sarcasm, a useful skill in the prickly blogosphere. Consider this statement: "The Treo 650 is the greatest phone in the world ... NOT!" Umbria's language-parsing software is "trained" to classify that and other common sarcastic turns of phrase as negative sentiments about the client. "Sarcasm is difficult for people to pick up, let alone machines," says Kaushansky. "But it's very valuable from a market research standpoint because it tells you how a customer really feels."
The software can also estimate the author's age and gender. Elongated spellings ("soooooooo"), multiple exclamation marks (!!!), and acronyms such as POS ("parent over shoulder") suggest a teenage female member of Generation Y (born after 1979). The blogger is probably a teenage boy if a posting is rife with hip-hop terminology such as "aight" (translation: "all right") and "true dat" ("I agree!").
The twenty- and thirty-something members of Generation X are more likely to use complete sentences. Gen X men also tend to favor satiric jibes and vivid adjectives such as "sordid" and "hilarious." Gen X women favor elaborately emotive turns of phrase, such as "wishing I could just crawl out of my skin and go on without it" (a real example). Male baby-boomers, on the other hand, tend to favor stale hip-hop-isms such as "jiggy" and "bling." They also pepper their blogs with terms such as "prostate" and "IRA."
Umbria's service is warp-speed quick. It usually takes less than a minute for the spider to crawl through those 20 million blogs. That's followed by a few additional minutes spent running linguistic algorithms on any relevant blog entries. Then out spits an "Umbria Buzz Report" that tells clients how they are being portrayed in the blogosphere. The reports cover the overall brand experience, along with consumer reactions to specific products and even specific features of those products. Umbria also tallies the number of comments, classifies all of them by estimated age and gender, and gauges whether blog sentiment is skewing positive or negative. In its reports, available weekly or monthly, Umbria always makes a point of reproducing a few of the juiciest blog postings verbatim (see the box above).
Bloggers are often early adopters of products and services, according to Kaushansky, and they tend to be more fervent and expansive in their opinions than the general population. Clients say Umbria's service helps them discern attitudes that may not show up for months using traditional market-research tools such as surveys and focus groups. Working on behalf of U.S. Cellular (http://www.uscc.com), for example, Umbria trawled the blogosphere and provided an early read that teens were especially anxious about exceeding their calling-plan minutes. The reason: They worried that their parents might charge them for overages.
Buzz Reports are infinitely customizable. Umbria can gauge the response to a specific product launch or an advertising campaign. The service is also useful for gathering intelligence on competitors. Izze Beverage (http://www.izze.com), a 45-employee Boulder company that makes sparkling fruit juices, recently engaged Umbria to track what bloggers were saying about rival brands. The exercise was a revelation, according to CEO Todd Woloson. When a blogger had a bad fruit juice experience with one of his competitors, the result was often a profane online rant. "We want to make sure that never happens to us," says Woloson. The company recently hired a customer relations specialist that it hopes will soothe angry consumers before they take to their blogs.
Umbria is a relatively small player in the $20 million blog research market, with a 10% share. Principal rivals include Cincinnati-based Intelliseek (http://www.invisible.com), which controls about a third of the market, and BuzzMetrics in New York, which does not disclose revenues. The latter two companies also crawl the blogosphere on behalf of corporate clients. But Umbria's solution is entirely software-based. Kaushansky's competitors also meet with clients to interpret the data and suggest strategic responses. "Ultimately we rely on both technology and humans for analysis," says Max Kalehoff, marketing director for BuzzMetrics. "Umbria takes an extremely automated approach."
Automation is the source of Umbria's competitive edge: affordability. Companies pay roughly $60,000 a year for its service. By contrast, the fee to engage one of its rivals can easily run into the seven figures. Kaushansky intends to maintain Umbria's low-cost and no-consultants strategy. The company's next frontier: algorithms that will classify bloggers by ethnicity, location, income, social class, and level of education.
GM and blogging
When Bob Lutz, the vice chairman of product development at General Motors, wants to get quick feedback from consumers on the company's latest product launch, new strategy, or something as specific as the quality of the sheet-metal fits on the latest Chevrolet, he knows where to go: his corporate blog, http://fastlane.gmblogs.com/.
Lutz is among a small but growing number of corporate executives who have started to experiment with blogs—Web-based commentary sites usually written in a first-person, conversational manner—to connect with customers online and advance corporate communications and marketing goals.
There are sixty-plus blogs produced by large corporations—and many more if, for example, you count the approximately 2,000 individual blogs written by Sun Microsystems employees that are then aggregated into one group blog at http://www.blogs.sun.com/. Besides General Motors and Sun Microsystems, companies that encourage blogging activity include The Boeing Company, Google, Hewlett-Packard, IBM, Microsoft, Red Hat, Edelman, Stonyfield Farm, and Yahoo. These blogs are part of a constantly expanding blogosphere that, as of the end of 2004, had some 32 million readers, according to the Pew Internet & American Life Project.
What Lutz and other executives recognize is that a blog is an incredibly effective yet low-cost way to:
· Influence the public "conversation" about your company: Make it easy for journalists to find the latest, most accurate information about new products or ventures. In the case of a crisis, a blog allows you to shape the conversation about it.
· Enhance brand visibility and credibility: Appear higher in search engine rankings, establish expertise in industry or subject area, and personalize one's company by giving it a human voice.
· Achieve customer intimacy: Speak directly to consumers and have them come right back with suggestions or complaints—or kudos.
How bloggers connectBloggers are somewhat like constantly circulating guests at a very large cocktail party: They don't all talk directly with one another, but each of them talks to many others, thus forming a richly interlinked network. According to David Sifry, founder and CEO of blog-focused search engine Technorati, there are almost 18 million blogs, spanning over one and a half billion links.
Technically, conversations among bloggers can occur in two ways. Blogging software can be configured to allow blog visitors to post a comment that others visiting the blog can also view. The GM FastLane blog featuring Lutz's comments is a corporate site that invites visitors to post their thoughts as well.
Other corporate sites do not permit posts from outsiders but do communicate on a blog-to-blog basis using various tools (such as the search engines Technorati, PubSub, and Google Blog Search) that allow users to monitor what is being said about themselves or their blog in cyberspace. These corporate blogs, like the vast majority of other blogs out there, use RSS (for real simple syndication) feeds, a tool that allows people to subscribe to blogs and thus be notified when the blogger has posted something new.
"If you are going to do a blog, you should always have an RSS feed of your own, which then allows people to subscribe to your publication," says Tim Bray, director of Web technologies at Sun Microsystems.
Take a lead in the conversationThis ability to engage with others is what gives blogs their power. "Blogs are all about conversations," says Sifry. A corporate blog allows a company both to keep an ear to the ground to hear what's being said about it and, if necessary, speak up with a correction.
"If you're not blogging, you're missing out on the chance to contribute to the conversation taking place in the blogosphere," says consultant Debbie Weil, creator of the BlogWrite for CEOs blog (http://www.blogwriteforceos.com/) and author of The Corporate Blogging Book (forthcoming in 2006 from Penguin/Portfolio).
You're also missing out on the chance to reach the journalists who write about your company for more traditional media outlets: a Euro RSCG Magnet and Columbia University Survey of the Media in 2005 found that 51 percent of journalists view blogs regularly.
Boost credibility and get closer to customersNot surprisingly, many of the early adopters of blogs have been technology companies eager to leverage blogs' ability to position a company executive for recognition as an expert in a given industry or on a specific topic. With his blog, Jonathan Schwartz, the president and COO of Sun Microsystems, has established himself (blogs.sun.com/jonathan) as a thought leader on issues pertinent to computer operating systems.
"Blogs allow us to get our message out to the world in a direct, unmediated, and unfiltered way," Bray says. Bray, who has been blogging since February of 2003 on tech-related topics, says that blogging allows Sun to write things that "are read directly by people in the software development community without being filtered by journalists and analysts."
He adds that a more subtle benefit is the fact that the blogging by Schwartz and many other employees has made it apparent to the world that Sun is not a faceless corporate monolith but a community of people who are passionate about software and information technology, and eager to engage with customers. He mentions one instance when a blog reader was trying to figure out how to obtain a type of software licensing approval from Sun. Several employee bloggers volunteered to assist, says Bray, and "they put the problem on a quick path to resolution.
Blog Pulse
here are many sites such as daypop.com and blogdex.com that can tell you what subjects are hot in the blogging world. And that's invaluable information if you've just released a new product and want to see what the world—or at least the part of the world that is online—is saying about it.
What we particularly like about BlogPulse, which is produced by Intelliseek, is its ability to graphically pinpoint blog news to specific time periods. So let's say Apple wants to look at blog mentions of its recently released Tiger operating system. Steve Jobs would enter those terms into the BlogPulse search bar. When the results are displayed, he would click the “Trend this Search” icon at the top of the list. This produces a chart that shows blog activity by date. You can click on the peaks to see what the buzz was that day. In this case, the big news was around the April 29 launch date, but you can also see more blog mentions generated on June 6, when the Apple-Intel relationship was announced.
This information will not only give you links to specific content about your product generated around the Web, but also provide a view into what specifically generates interest in your product or company.
Conclusion
Blogging is not a fad, it's the rise of amateur content, which is replacing the centralized, controlled content done by professionals. While most agree that blogging will continue to be popular, its next steps are uncertain. Blogging overexposure is on the horizon. Right now, blogging is trendy, I see that lasting a few years, but it will slow down. Blogging is here to stay, as many sites start to incorporate blogging features, and some news sites become more blog-like. The blogosphere will also become known for topics other than technology and politics. Two things are certain: Blogging will remain disruptive to the traditional media, and new uses will surface. You are going to see blogging move to video and instant messaging. It's just the beginning.
Sources:
HBS Articles, Knowledge @ Wharton, Cover stories on blogging in Fortune, CNN and Business Week
The future of Bluecasting as a new medium of outdoor communication
- By Ahmed Faiyaz
When one hears of a term like Bluecasting a number of questions would arise. What is Bluecasting? How does it work etc. Let us first get familiar with the essentials.
What is BlueCasting?
BlueCasting is a proximity marketing solution which allows brands to communicate to users via Bluetooth-enabled mobile phones. BlueCasting is a trademark of Filter UK Ltd, mobile partners to OneZeroOne and infrastructure providers to Maiden and BA Media
What is Bluetooth?
Bluetooth is a standard for radio hardware and operating software which are embedded into consumer electronics like mobile phones, digital cameras and printers. All Bluetooth devices can “talk” to each other using this standard and share information with each other.
Who invented it?
The Bluetooth SIG (Special Interest Group) was founded in 1998 to promote and develop a wireless technology which would allow devices of rival companies to exchange data. These include promoter member companies Agere, Ericsson, IBM, Intel, Microsoft, Motorola, Nokia and Toshiba, and thousands of Associate and Adopter member companies.
Why ‘Bluetooth’
Harald Bluetooth was a 10th Century Viking king who united Denmark and Norway. The runic logo is testament to this heritage.
So is it expensive?
No; it’s free.. The technology is device to device not through the network. So your phone speaks to your Bluetooth ear piece in your car for example and doesn’t charge you via a phone network every time it rings.
How do Bluetooth Devices Communicate?
Bluetooth is basically a tiny radio transmitter and receiver embedded into an electronic device. When a Bluetooth device [for example, a phone] wants to “talk” to another device [for example, a computer] it simply broadcasts a radio signal which is received by the other unit.
What Frequency does BlueCasting Operate At?
Bluetooth is a world standard which operates at a frequency of 2.45 Gigahertz – this band is referred to as ISM [Industrial, Scientific, Medical].
Does Bluetooth Interfere with Other Equipment?
Not at all. Bluetooth delivers a low-power “tagged” signal which is specifically designed to avoid interfering with other equipment, making Bluetooth an easy-to-adopt technology.
Is Bluetooth Dangerous?
The low power and high frequency of the ISM band means there are no negative effects of prolonged exposure. The International Telecommunication Union specifically chose this band because it is has no effect on humans [or anything else for that matter].
What Does a BlueCast server look like?
A BlueCast Server is basically a Windows PC running our BlueCast software and augmented by a Bluetooth aerial.
How Big is The Server?
The BlueCast server is the same size as a small portable computer. It measures approximately 31cm wide by 25cm high by 4cm deep. It weighs around 2.7Kg.
What does the Server need?
The standard BlueCast server runs off 240 volts AC power. Optionally the server can be plugged into an Ethernet connection, access a WiFi network or ADSL connection for remote monitoring and maintenance.
How Does BlueCasting Work?
A consumer comes within range of a BlueCast Server and switches their mobile phone to “discoverable”. The BlueCast server recognises the handset and then sends information to it over Bluetooth.
What is the range of BlueCasting?
Anything from a few meters up to 250 meters. We are able to increase or decrease the signal strength to accurately adjust the range.
What Type of Content is BlueCast?
We can BlueCast anything from a small piece of text or a still image up to an audio clip or even video.
Does it Track Users?
Yes, it does. This means that if a user has opted-in and received some content we know they have received it and therefore the next time they come into range we can either send them new content or simply ignore them. This means we do not keep sending the same content to the same people. It also means our content gets more and more relevant to each cosumer over time.
Is it Junk Mail?
No. BlueCasting only works if the user turns on their Bluetooth, makes it “discoverable” and elects to receive the content. If at any point the user says they do not want it then we stop trying to talk to them.
Does BlueCasting Comply with Privacy Law?
Yes, it does. It has been certified by the Legal Counsel to the IPA [Institute of Practitioners in Advertising] as complying with the EU Digital Privacy Directive.
How and where does it work……
• Digital Billboards
– Pushes content to users based on proximity
– Value-add for existing advertising locations
– Adds new dimension for retail and public spaces
• Broadband Delivery
– Pushes content to users upon user request
– By-passes mobile networks and associated charges
– Very high speed when compared to GPRS transfer
• BlueCast servers located at prime poster sites Shopping hubs, Malls, Airports, Multiplexes etc
• Delivers additional information based on current advertisments
• Can be synchronised with multi-ad displays
• BlueCast servers located in retail environments
• Deliver special offers, vouchers, etc & can tie in with specific brand[s]
• Delivery of “grazing” content like News, games, audio, video, magazine content
• Essentially its to cater to a captive audience
•
•
•
Content Delivery on Bluecasting
• BlueCast server is used to deliver paid-for content to user’s handset without need for mobile network.
• Fast delivery [around 25k per second]
• Delivery “there and then”
• No network charges for user, no network commission payable
• Enables new type of rich-media content/application sales
Advantages of Bluecasting
• Fast
– Delivers content at 25k to 35k per second (10 times faster than GPRS)
• Free
– Does not use mobile network and therefore no distribution costs
• Secure
– BlueCasting uses latest security technologies [opt-in, PIN code]
– Communication is server to phone, not phone to phone; no virus potential
• Smart
– Builds up profile of user and follows associated rules
– Creates a pull for the brand & effectiveness can be measured
• Fun
– Rich media, Java games, TrueTones - large files in seconds
• Proven
– Maiden and BA media recently installed in their infrastructure ; Coldplay’s launch of X & Y
Some Bluecasting successes:
The campaign, carried out to promote the launch of Coldplay's album "X&Y", is just one of several that are being pioneered in and on billboards, movie theaters, airports and train stations around the United States and Europe.
The upshot: Advertising is coming to a cell phone near you.
Filter UK, the mobile marketing agency behind the Coldplay campaign, embedded its Bluetooth ad servers in giant television screens in several central London train stations. The screens promoted the album and also urged users to switch their Bluetooth handsets to "discoverable" mode, so that they could receive more content. Commuters with discoverable Bluetooth handsets passing within 100 meters of the billboards were sent a message asking if they'd like to receive the Coldplay content, which included video interviews, music clips and still images.
The billboards detected 87,000 unique discoverable handsets, of which 13,000 opted to receive the material, a response rate of about 15 percent—very high by advertising industry standards. While the Coldplay campaign may be the biggest Bluetooth campaign yet, it isn't the first.
In the United States, the pioneer is WideRay, which has just finished a summer-long campaign at several Loews movie theatres around the country—in New York's Lincoln Square, Loews Universal Citywalk in Los Angeles and the Loews Metreon in San Francisco.
Instead of billboards, WideRay installed its "Jack Service Point" units in theater kiosks, and offered downloads via Bluetooth or infrared. The downloads featured content related to the Fox films "Mr. and Mrs. Smith", "Fantastic Four" and "Kingdom of Heaven," and included movie trailers, ring tones and wallpaper images.
Technology from Filter and competitor Hypertag Ltd. has been used in several previous campaigns in the United Kingdom. Filter Bluetooth ads tied into British Airways billboards around London convinced 10,000 users to download content earlier this year. Filter also powered successful ads for Range Rover and Volvo in London's Heathrow airport this spring, as well as advertising kiosks in Bristol sponsored by Carling, a British beer brand.
Maiden, a major handler of UK billboards, is outfitting its advertising spaces with Filter technology in 30 train stations around the United Kingdom. Hypertag has carried out two major Bluetooth promotions for album launches, one for a New Order album in March, and the other in August for the Goldfrapp album "Supernature."
The New Order promo was embedded in kiosks in HMV UK Ltd. music stores in London and Manchester, England, while the Goldfrapp launch uses a downloadable Java application called Hyperstore and is promoted through billboards and Goldfrapp performances. Bluetooth ads are made practical by the growing density of Bluetooth in Western countries. In all of Western Europe, 19 percent of cell phones will be Bluetooth-enabled by the end of this year, according to Strategy Analytics, nearly doubling to 64 million from 35 million last year.
Filter said it believes the density in the United Kingdom is higher, upward of 30 percent. In North America, the analysis firm puts the figure at 32 million handsets, about 14 percent of the total, by the end of this year. That's up from last year's 15 million. Bluetooth is also popular in China and Korea, but not as much in Japan, where technologies such as 3G and GPRS are more widely used.
The Future in India
As per a research conducted by Frost & Sullivan 10 % of mobile phones in Indian metros have Bluetooth. This number is growing every quarter with the cost being only Rs 6- 7,000. These numbers are likely to show an upward trend with the number of Bluetooth phones increasing by 30% per annum.
The Target Audience
Age 18 – 24
– Visit the malls / multiplexes at least once a week; many 2 – 3 times a week
– Reside in the vicinity of the mall or study/ work in the same area
– Visit 2 – 3 hours on each visit; 4-5 on weekend or if they are watching a movie
– Often unwind at cafés in the evenings
– Are brand conscious and are looking for value for money purchases ; willing to pay for high brand equity & image
– Visit at least 2 stores on each visit to the mall apart from the food court / cafe; Check out new collections/ products
– Global in taste & outlook and are tech savvy
Age 25 – 40
– Sec A, B+; High disposable incomes & work long hours
– Use laptops, mobile phones & PDA’s for official purpose
– Spend close to an hour each time waiting for a flight at airports and fly often
– Shop when required at malls and catch a movie when they can at a multiplex
– Are brand conscious and do not like unsolicited marketing messages/ calls ; willing to pay for high brand equity & image
– Are sophisticated in their taste, individualistic and brand loyal
Potential locations
BlueCast servers could be located in places where the the target audience hang out regularly such as:
Shopping Areas eg Brigade Road in Bangalore, MG Rd in Pune
Malls eg Forum & Garuda in Bangalore, Inorbit in Mumbai
Cafes eg Barista, Café Coffee Day
Multiplexes eg E-square, Inox, PVR
Airport Departure lounges
What kind of content would appeal to the target audience:
Wallpapers of Dockers, Levis or Benetton’s new season offerings
Music clips, images and ringertones of new movies & music albums
Images of sports icons who endorse Nike/Rbk/Adidas
New releases and bestsellers’ list from Crossword/ Landmark
Discounts and special offers from retail stores eg Nike, Fabmall, Levis
New product information, images and feature downloads of new mobile phones, laptops and watches eg Motorola, Timex, Lenovo
Discount offers, new routes, check - in information and flight schedules from Kingfisher & Jet
Images, features and clips of new cars launched eg Swift, Honda
Promotions and new launches in stores like Lifestyle & Shoppers Stop
I believe that is a new and exciting medium that one could reach out to their target audience through. It is also an innovative tool and provides a new touch point to reach out to the target base in a more cost efficient & measurable way and moving away from the expensive and highly cluttered traditional media like television and newspapers.
SourcesBluecasting.com
Protein Feed web articles
Original research done at Kinetic one –o – one & Ogilvy Activation
When one hears of a term like Bluecasting a number of questions would arise. What is Bluecasting? How does it work etc. Let us first get familiar with the essentials.
What is BlueCasting?
BlueCasting is a proximity marketing solution which allows brands to communicate to users via Bluetooth-enabled mobile phones. BlueCasting is a trademark of Filter UK Ltd, mobile partners to OneZeroOne and infrastructure providers to Maiden and BA Media
What is Bluetooth?
Bluetooth is a standard for radio hardware and operating software which are embedded into consumer electronics like mobile phones, digital cameras and printers. All Bluetooth devices can “talk” to each other using this standard and share information with each other.
Who invented it?
The Bluetooth SIG (Special Interest Group) was founded in 1998 to promote and develop a wireless technology which would allow devices of rival companies to exchange data. These include promoter member companies Agere, Ericsson, IBM, Intel, Microsoft, Motorola, Nokia and Toshiba, and thousands of Associate and Adopter member companies.
Why ‘Bluetooth’
Harald Bluetooth was a 10th Century Viking king who united Denmark and Norway. The runic logo is testament to this heritage.
So is it expensive?
No; it’s free.. The technology is device to device not through the network. So your phone speaks to your Bluetooth ear piece in your car for example and doesn’t charge you via a phone network every time it rings.
How do Bluetooth Devices Communicate?
Bluetooth is basically a tiny radio transmitter and receiver embedded into an electronic device. When a Bluetooth device [for example, a phone] wants to “talk” to another device [for example, a computer] it simply broadcasts a radio signal which is received by the other unit.
What Frequency does BlueCasting Operate At?
Bluetooth is a world standard which operates at a frequency of 2.45 Gigahertz – this band is referred to as ISM [Industrial, Scientific, Medical].
Does Bluetooth Interfere with Other Equipment?
Not at all. Bluetooth delivers a low-power “tagged” signal which is specifically designed to avoid interfering with other equipment, making Bluetooth an easy-to-adopt technology.
Is Bluetooth Dangerous?
The low power and high frequency of the ISM band means there are no negative effects of prolonged exposure. The International Telecommunication Union specifically chose this band because it is has no effect on humans [or anything else for that matter].
What Does a BlueCast server look like?
A BlueCast Server is basically a Windows PC running our BlueCast software and augmented by a Bluetooth aerial.
How Big is The Server?
The BlueCast server is the same size as a small portable computer. It measures approximately 31cm wide by 25cm high by 4cm deep. It weighs around 2.7Kg.
What does the Server need?
The standard BlueCast server runs off 240 volts AC power. Optionally the server can be plugged into an Ethernet connection, access a WiFi network or ADSL connection for remote monitoring and maintenance.
How Does BlueCasting Work?
A consumer comes within range of a BlueCast Server and switches their mobile phone to “discoverable”. The BlueCast server recognises the handset and then sends information to it over Bluetooth.
What is the range of BlueCasting?
Anything from a few meters up to 250 meters. We are able to increase or decrease the signal strength to accurately adjust the range.
What Type of Content is BlueCast?
We can BlueCast anything from a small piece of text or a still image up to an audio clip or even video.
Does it Track Users?
Yes, it does. This means that if a user has opted-in and received some content we know they have received it and therefore the next time they come into range we can either send them new content or simply ignore them. This means we do not keep sending the same content to the same people. It also means our content gets more and more relevant to each cosumer over time.
Is it Junk Mail?
No. BlueCasting only works if the user turns on their Bluetooth, makes it “discoverable” and elects to receive the content. If at any point the user says they do not want it then we stop trying to talk to them.
Does BlueCasting Comply with Privacy Law?
Yes, it does. It has been certified by the Legal Counsel to the IPA [Institute of Practitioners in Advertising] as complying with the EU Digital Privacy Directive.
How and where does it work……
• Digital Billboards
– Pushes content to users based on proximity
– Value-add for existing advertising locations
– Adds new dimension for retail and public spaces
• Broadband Delivery
– Pushes content to users upon user request
– By-passes mobile networks and associated charges
– Very high speed when compared to GPRS transfer
• BlueCast servers located at prime poster sites Shopping hubs, Malls, Airports, Multiplexes etc
• Delivers additional information based on current advertisments
• Can be synchronised with multi-ad displays
• BlueCast servers located in retail environments
• Deliver special offers, vouchers, etc & can tie in with specific brand[s]
• Delivery of “grazing” content like News, games, audio, video, magazine content
• Essentially its to cater to a captive audience
•
•
•
Content Delivery on Bluecasting
• BlueCast server is used to deliver paid-for content to user’s handset without need for mobile network.
• Fast delivery [around 25k per second]
• Delivery “there and then”
• No network charges for user, no network commission payable
• Enables new type of rich-media content/application sales
Advantages of Bluecasting
• Fast
– Delivers content at 25k to 35k per second (10 times faster than GPRS)
• Free
– Does not use mobile network and therefore no distribution costs
• Secure
– BlueCasting uses latest security technologies [opt-in, PIN code]
– Communication is server to phone, not phone to phone; no virus potential
• Smart
– Builds up profile of user and follows associated rules
– Creates a pull for the brand & effectiveness can be measured
• Fun
– Rich media, Java games, TrueTones - large files in seconds
• Proven
– Maiden and BA media recently installed in their infrastructure ; Coldplay’s launch of X & Y
Some Bluecasting successes:
The campaign, carried out to promote the launch of Coldplay's album "X&Y", is just one of several that are being pioneered in and on billboards, movie theaters, airports and train stations around the United States and Europe.
The upshot: Advertising is coming to a cell phone near you.
Filter UK, the mobile marketing agency behind the Coldplay campaign, embedded its Bluetooth ad servers in giant television screens in several central London train stations. The screens promoted the album and also urged users to switch their Bluetooth handsets to "discoverable" mode, so that they could receive more content. Commuters with discoverable Bluetooth handsets passing within 100 meters of the billboards were sent a message asking if they'd like to receive the Coldplay content, which included video interviews, music clips and still images.
The billboards detected 87,000 unique discoverable handsets, of which 13,000 opted to receive the material, a response rate of about 15 percent—very high by advertising industry standards. While the Coldplay campaign may be the biggest Bluetooth campaign yet, it isn't the first.
In the United States, the pioneer is WideRay, which has just finished a summer-long campaign at several Loews movie theatres around the country—in New York's Lincoln Square, Loews Universal Citywalk in Los Angeles and the Loews Metreon in San Francisco.
Instead of billboards, WideRay installed its "Jack Service Point" units in theater kiosks, and offered downloads via Bluetooth or infrared. The downloads featured content related to the Fox films "Mr. and Mrs. Smith", "Fantastic Four" and "Kingdom of Heaven," and included movie trailers, ring tones and wallpaper images.
Technology from Filter and competitor Hypertag Ltd. has been used in several previous campaigns in the United Kingdom. Filter Bluetooth ads tied into British Airways billboards around London convinced 10,000 users to download content earlier this year. Filter also powered successful ads for Range Rover and Volvo in London's Heathrow airport this spring, as well as advertising kiosks in Bristol sponsored by Carling, a British beer brand.
Maiden, a major handler of UK billboards, is outfitting its advertising spaces with Filter technology in 30 train stations around the United Kingdom. Hypertag has carried out two major Bluetooth promotions for album launches, one for a New Order album in March, and the other in August for the Goldfrapp album "Supernature."
The New Order promo was embedded in kiosks in HMV UK Ltd. music stores in London and Manchester, England, while the Goldfrapp launch uses a downloadable Java application called Hyperstore and is promoted through billboards and Goldfrapp performances. Bluetooth ads are made practical by the growing density of Bluetooth in Western countries. In all of Western Europe, 19 percent of cell phones will be Bluetooth-enabled by the end of this year, according to Strategy Analytics, nearly doubling to 64 million from 35 million last year.
Filter said it believes the density in the United Kingdom is higher, upward of 30 percent. In North America, the analysis firm puts the figure at 32 million handsets, about 14 percent of the total, by the end of this year. That's up from last year's 15 million. Bluetooth is also popular in China and Korea, but not as much in Japan, where technologies such as 3G and GPRS are more widely used.
The Future in India
As per a research conducted by Frost & Sullivan 10 % of mobile phones in Indian metros have Bluetooth. This number is growing every quarter with the cost being only Rs 6- 7,000. These numbers are likely to show an upward trend with the number of Bluetooth phones increasing by 30% per annum.
The Target Audience
Age 18 – 24
– Visit the malls / multiplexes at least once a week; many 2 – 3 times a week
– Reside in the vicinity of the mall or study/ work in the same area
– Visit 2 – 3 hours on each visit; 4-5 on weekend or if they are watching a movie
– Often unwind at cafés in the evenings
– Are brand conscious and are looking for value for money purchases ; willing to pay for high brand equity & image
– Visit at least 2 stores on each visit to the mall apart from the food court / cafe; Check out new collections/ products
– Global in taste & outlook and are tech savvy
Age 25 – 40
– Sec A, B+; High disposable incomes & work long hours
– Use laptops, mobile phones & PDA’s for official purpose
– Spend close to an hour each time waiting for a flight at airports and fly often
– Shop when required at malls and catch a movie when they can at a multiplex
– Are brand conscious and do not like unsolicited marketing messages/ calls ; willing to pay for high brand equity & image
– Are sophisticated in their taste, individualistic and brand loyal
Potential locations
BlueCast servers could be located in places where the the target audience hang out regularly such as:
Shopping Areas eg Brigade Road in Bangalore, MG Rd in Pune
Malls eg Forum & Garuda in Bangalore, Inorbit in Mumbai
Cafes eg Barista, Café Coffee Day
Multiplexes eg E-square, Inox, PVR
Airport Departure lounges
What kind of content would appeal to the target audience:
Wallpapers of Dockers, Levis or Benetton’s new season offerings
Music clips, images and ringertones of new movies & music albums
Images of sports icons who endorse Nike/Rbk/Adidas
New releases and bestsellers’ list from Crossword/ Landmark
Discounts and special offers from retail stores eg Nike, Fabmall, Levis
New product information, images and feature downloads of new mobile phones, laptops and watches eg Motorola, Timex, Lenovo
Discount offers, new routes, check - in information and flight schedules from Kingfisher & Jet
Images, features and clips of new cars launched eg Swift, Honda
Promotions and new launches in stores like Lifestyle & Shoppers Stop
I believe that is a new and exciting medium that one could reach out to their target audience through. It is also an innovative tool and provides a new touch point to reach out to the target base in a more cost efficient & measurable way and moving away from the expensive and highly cluttered traditional media like television and newspapers.
SourcesBluecasting.com
Protein Feed web articles
Original research done at Kinetic one –o – one & Ogilvy Activation
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