Originally Written : April 2007
Trends in Marketing
Segmentation Trends:
A baby boomer turns 50 every seven seconds- joining a population segment that will grow 25 percent in the next decade while other segments remain flat. This increasing market segment is a very lucrative target for marketers; Studies show that baby boomers are a dynamic group that is much more open to new experiences and brands than previous generations of older adults. They baby boomer generation heading into their golden years, are characterized by the fact that they have disposable income and have a tendency to refer business. According to Stephanie Lakhani, of Breathe Wellness Spas, baby boomers “tend to travel and buy in groups, so giving them an incentive to refer friends in the form of an upgrade or a thank you gesture works very well.”
According to the Selig Center for Economic Growth at the University of Georgia, by 2010 the buying power of American Blacks and Hispanics is expected to be greater than the gross domestic product of Canada. There are over 56 million foreign born or first generations in America today that control over $1 trillion in spending power. This presents to be a very attractive segment for many businesses. Most marketers in this segment employ ethnic branding and capitalize on immigrant nostalgia. Instead of targeting mass markets, specialty brands aim at immigrant populations and hope that demand will migrate to general public. Businesses like Pollo Campero from Guatemala, Mexico’s Taco Tote and Jarritos are some of the pioneers in this business model.
Social Networks:
Customers are making “friends” with online retailers and brands through social networking sites like myspace.come and facebook.com. These massive platforms boast of millions of users, all segmented by geography, age, interests, jobs etc, and offer tremendous opportunities for marketers to effective tap into their market. According to Libby Pigg, senior account manager at Edelman Interactive it is possible for a company to launch a profile of their business on popular websites like MySpace or facebook. She compares it to a dating site where the company tells a little bit about itself and tries to find people that form the target segment for the company. For example, the makers of high fashion purses by using the search function of MySpace or facebook can target single women, living in New York under the age of 35.
According to Phil Kotler, professor of Marketing at Northwestern University, one of the current trends in marketing is “Marketing is done by everyone”. Blogs provide an excellent platform to do the same. With the number of blogs on the internet numbering over 43 million (according to search engine “Technorati”) everyone has a voice in the digital age. Blogs provide an excellent channel for direct feedback for businesses, in addition for being the perfect seed-bed for word-of-mouth marketing campaigns.
Viral Marketing:
Viral Marketing is a phenomenon that facilitates and encourages people to pass along a certain message. The viral model is analogous to the spread of an infectious disease. There is a potential of ‘seeding’ a few individuals with an idea, or marketing message, which infect their friends with the message, who infect more. So the idea/message propagates and can reach millions. In order for viral marketing to be successful, the number of people each person infects must be more than one. To attain this, the right individuals need to be seeded, ones that will ensure the propagation of the message. Most companies micro-segment their markets in order to find the right individuals, resorting primarily on word-of-mouth-like media like blogs and emails.
Viral campaigns usually are very cheap compared to traditional ad forms, costing $50,000 to $100,000. According to the 2004 television cost survey, the average cost of producing a 30 second television advertising spot was $338,000 which did not include the cost for air time. Viral campaigns usually consist of a funny message attached to them that sparks it to propagate. This message is propagated usually through emails, blogs and websites like You-Tube and Google Video. But constructing a campaign that appeals to viewers, prompting them to share it with their friends is not an easy task. For every successful viral campaign there are at least ten that failed. But given the low costs for the campaign, it is a risk that more and more businesses seem to be willing to take.
TV meets Internet:
One of the current social trends is that the computer is commingling with home entertainment. There is a growing trend of consumers using their computers to watch movies and video media downloaded or streamed from the internet. Computers are increasingly being used as home entertainment centers, to play DVDs and stream music. This has lead to a huge growth in the computer peripherals market, including plasma TV screens, and high end computer audio equipment. This trend has forced Dell, which prided itself as a pioneer in direct selling, to open its first retail store in Dallas.
Advent of technologies like online streaming of videos fueled by faster internet connections has changed the viewing habits of consumers. NBC and ABC now offer most of their prime time shows on their respective websites, allowing users to choose the time they want to watch, Streaming videos online though, has certain problems. Advertisers are not able to take adapt well to this new way of watching television. The TRP ratings that determine advertising rates for shows are severely skewed because of the online offerings of the two most popular networks.
There are new technologies and platforms being developed currently that attempt to tackle the problem of advertising with online video, while promising great content. One of these platforms is Joost, which distributes professionally created content from television networks. It operates on a peer-to-peer network, where the task of transferring large files is distributed among a large number of computers lowering bandwidth costs. Joost’s model includes short ads that pop up when videos are initiated, and mid-roll ads for videos that are more than five minutes long. Advertisers sponsor a piece of content but instead of just video ads, the content is given multiple elements, including email offers, banner advertising and long-form messages.
Branded Entertainment:
With the internet growing in capabilities, and a plethora of platforms to deliver content, more and more companies are delving into brand entertainment. Websites like Google video, You-Tube, AOL and MSN all collect branded content for dispersion. In addition, companies like Comcast offer video on demand services to their subscribers allowing them to watch branded content at the touch of a remote. Cell phone service providers like Cingular, Sprint and Verizon all offer live TV and on-demand videos to the cellular handsets. Frontier Airlines has an entire channel with branded content in each of its planes. Burger King and Jeep are making their own video games to further communicate their brand messages.
During the last FIFA world cup Nike launched “Joga Bonito” marketing campaign to reach soccer crazy fans. The campaign featured videos starring leading soccer players from around the world as well as home made videos of people playing soccer and showcasing their skills. According to Trevor Edwards, VP-president, global brand and category management for Nike, the “Joga” videos were viewed over 110 million times during the 10 week World Cup Campaign.
Filed under: Marketing/Advertising, Internet Broadcasting, Social Networking, Viral Marketing
