A Peek At Your Competitors’ Notes

As emerging media wash over the marketplace, it’s understandable if you feel like you’ve been sent back to school. But while facts and opinions are abundant in this classroom, proven methods are as rare as a hard-bound dictionary.

What are the key insights you need before your next client meeting, budget session or management hire? We asked blue-chip business strategists such as McKinsey & Company, Accenture and Gartner Group. Then we studied marketers, agencies and campaigns to find cases that bring the most crucial lessons to life. Some lessons fly in the face of conventional assumptions; others skewer the hype surrounding the “next new thing.” They reveal that you can control some of your marketing content, but you should let go of your marketing ego. Your flexibility and grasp of the big picture will reward you, while blind faith in an unfettered Internet will not. And yet, it’s true: nearly every campaign you touch for the rest of your career will require a digital element.



lesson No. 1: BECOME YOUR TARGET

CLIENT/CAMPAIGN Starwood’s new hotel brand, Aloft, will offer loft-style rooms with flat-panel TVs and Wi-Fi Internet access. Although the first hotel will not be built until 2008, the first phase of a yet-to-be-determined multimillion-dollar marketing campaign launched in September. A second phase, including more traditional TV, print and radio ads, will follow in January from the client’s agency, RDA.



STRATEGY Go virtual first. To build buzz, brand loyalty and gain consumer input on design, Starwood opened in September a prototype of the real hotel on Second Life, a social networking space with more than 600,000 registered users. Marc Schiller, founder and CEO of New York-based Web shop Electric Artists, suggested the idea of using SL as an alternative marketing strategy to Starwood executives. “You have to track new technologies … and catch them just as they move from the early adopters to the masses,” he says. “The brands that capture that sweet spot become very successful at leveraging early platforms.”

Aloft Hotels are targeting trendy, tech-savvy 30-year-olds—exactly the Second Life demo, according to SL owner Linden Labs. The site’s users are 65 percent male and 35 percent female. The average age is 32, and users spend an average of 22.8 hours a month on SL.

Starwood will also use SL to hold virtual marketing events in conjunction with other advertisers to keep the buzz alive. Although no deals are inked, Starwood hopes to hold virtual cocktail parties with a record label promoting a new album or an entertainment company releasing a new film. To keep attracting new customers, the virtual hotel will remain open even after the brick-and-mortar versions are built. “My biggest concern was [whether we] would have something relevant in this community and also keep bringing [virtual users] back,” says Brian McGuinness, vp of Aloft Hotels. Given the competition on SL for a user’s attention, “it is important that we program the space for entertainment,” he says.

Starwood also created www.virtualaloft.com, a blog to gather consumer input on the color and style of the real hotel based on their thoughts of the design of the virtual hotel.



LEARNING CURVE Avatars—digitized, 3D figures—rule the virtual world. But how many busy execs have their own avatars? To better understand its target consumer, execs at Starwood, Electric Artists and design firm Electric Sheep created avatars of themselves to research building a virtual hotel. Just like in the real world, Starwood execs first had to buy land. They bought an island on SL; hotel execs declined to name an exact figure, but islands cost $1,250 and have a $195 a month maintenance fee, says Linden Labs. And just to get a better grasp of the virtual world, the 25-person team held daily meetings inside their own SL boardroom.

It’s too early to start counting real-world hotel bookings, but Starwood execs are paying close attention to the PR impressions. Since the blog launched on Aug. 7, it’s had more than 10,000 visits. “[We] are starting to build passion for the launch of the real hotel, which is the type of stuff you can’t buy,” McGuinness says.

He considers the virtual Aloft blog “added value.” Several hundred consumer comments —from “would love to see more artwork” to “too much Jetsons”—are being considered and incorporated into new versions of the virtual hotel—and may change the appearance of the real hotels. “This ultimately gives them a feeling of ownership of the product, and helps build brand loyalty before we even open our doors,” McGuinness says.

Despite having a reputation for being addictive, one drawback to SL is the fact that it is hard for some newcomers to determine what all the fuss is about. Participating in the site requires computers with sophisticated broadband connections and graphics, as well as users with some gaming skills to figure out how to maneuver. To this, Schiller responds, “The type of people who are captivated by this stuff are not really gamers at all. But you do have to have an interest in computers.”

Virtual worlds may seem silly, but it’s hard to deny that real people do spend real money in them. Right now, Starwood execs have no plans to charge for their virtual hotel services. After all, avatars don’t really need to sleep.



lesson No. 2:

MINE FOR ONLINE JEWELS

CLIENT/CAMPAIGN Suzuki Motors launched its Grand Vitara and SX4 with a $100 million campaign tagged “Way of life” that began in September 2005. About $7 million is allotted for digital ads in two areas: auto sites and niche sites aimed at surfers, skate- and snowboarders and other sports enthusiasts.



STRATEGY Suzuki’s campaign positions the brand as active and free spirited, for independent-minded drivers looking for value. Mass market TV and print work sets an overarching tone that is reinforced with specialized online placement. TV spots air on college football and pro sports programs; print ads appear in high-circulation sports, auto and financial magazines.

The goal of the Web work is to drive traffic to the company’s site and generate leads for dealers. The niche ads are also designed to build a connection to the brand among active 35- to 45-year-olds. Suzuki says average click-through rates are about 1 percent, and car sites are the “most efficient” buy for dealer leads, while niche ads build greater brand consideration among early-stage car buyers.



LEARNING CURVE As many of you know, the Web is surprisingly finite. “The online choices seem limitless at first, but when we apply all the factors that we use to judge them, the set of good sites gets small,” says Joe Ferry, account supervisor at roster shop Colby and Partners.

Large, high-traffic sites such as Yahoo, MSN and AOL are too expensive for the number of target customers they reach and dealer leads they generate. Popular, user-generated sites such as MySpace require highly customized content that is labor-intensive to create and manage, driving up the cost, says David Harris, Suzuki’s e-business marketing manager. And ad space on car buyer sites regularly sells out and competition is tight for the most desirable slots.

Based on lessons learned earlier this year, Suzuki is managing to get space on the crowded auto sites, such as cars.com and Autotrader.com, by buying 2007 space in September—about four months ahead of the competition, according to industry experts.

The company also taps cheaper, lesser known, high-response sites that are used by leading-edge car buffs, such as Auto Blog. “Auto Blog was ideal for us. For a while we were their sole sponsor and had run of the site,” says Harris. But the site was sold to AOL last year, and now the car ads compete with everything from movie to loan company ads.

There is also a lot of ad clutter in the general sports category. “By going to enthusiasts for specific sports favored by our active target, our ads are more noticed,” says Shelby Saville, svp at StarLink IP, Suzuki’s online media shop. But highly specialized sites offer only a limited number of viewers who are shopping for a new car. Once that group is saturated, the leads to dealers dwindle, and Suzuki has to shift to new sites, Saville says. Matrix Consulting in Santa Monica, Calif., is also retained to aid in the search. “If you want to find the jewels, you really have to go grassroots,” says Harris.

When faced with not-so-perfect sites, the client goes into experimental mode. Suzuki negotiates to target a subgroup of a site’s users or tests various executions. “We try different placements [and] creative execution to discover what is the most efficient for that particular site,” says Ferry.



lesson No. 3:

SEEK CONTROLLED CHAOS

CLIENT/CAMPAIGN Yahoo launched its Yahoo Answers site with “Ask the Planet,” an online, PR and event marketing campaign. Introduced in June, the site provides a venue for users to respond to each other’s questions. Part of the campaign involved celebrities posing questions, which cost an estimated $1 million or less to promote (many of the promos appeared on Yahoo’s own sites and the celebs were not paid).



STRATEGY Yahoo mixed science and religion to spark a blogfest. For the online portion of the campaign, the client recruited famed physicist Stephen Hawking, Bono, Donald Trump, Al Gore and six other well-knowns to pose questions and solicit answers from site users.

By using non-Hollywood celebrities, the client and its agencies OgilvyOne and Soho Square sought to distinguish the new service from other user-generated outlets. Radio ads in New York, Los Angeles and San Francisco, public relations, blogs and search marketing announced the questions.

Online ads, which included the celebrity “Question of the Day,” ran throughout Yahoo and on Slate, iVillage and IMDb. The client also tapped Tribal Fusion, 24/7 Real Media, Burst Blogs and other ad networks that provided space on hundreds of thousands of sites.

Hawking proved to be the most elusive, but also the most fascinating, says Patrick Crane, Yahoo’s marketing vp. His question—”How can humans survive the next 100 years?”—triggered instant and controversial response, with about 10,000 answers the first day. “It was thrilling. The question went online, and every time you clicked to refresh your computer screen, there were a few hundred more answers,” says Crane. In all, more than 25,000 people responded in three weeks, and a heated debate about the Hawking-Yahoo question blossomed out to the blogosphere. The Yahoo brand was regularly cited in comments about science and religion that were often personal and sometimes hostile. Christians were called “crazy” and “oppressed”; non-Christians were called “doomed” and “evil.”

A month after his query hit the Web, Hawking answered his own question in a video posted on the site, which attracted more than 758,000 views and started a new round of bloggers’ comments.

When the dust settled, both sides in the Hawking debate ended up treating the Yahoo brand as an unbiased bystander in the fray, neither atheist nor crusader.

“We can’t control the Web outside of our site and we don’t want to shy away from being associated with controversy in our marketing,” says Crane. “It takes a strong stomach. But if we believe in this medium, we have to show that we mean it.”



LEARNING CURVE Managing the chaotic content of the so-called “citizen media” takes finesse, and for Yahoo most of the heavy lifting was done at the conceptual stages of its campaign. To encourage smart, passionate answers from consumers, the client focused on celebrities who are seen as “evangelists” in their respective fields.

“Our hope was to elevate the everyday dialogue on the Web by our tonality and type of question,” says Bill Roden, assistant creative director at OgilvyOne. The company figured the best way to engage consumers was by “activating their imaginations,” says Nick Chavez, director of marketing.

Yahoo says it decided never to post fake blogs or comment on other blogs in an attempt to promote the brand or tame inflammatory online chatter resulting from the campaign. It seems like an easy fix, but it’s a good way for an online market to shoot itself in the foot, say execs. “Beware. Users can smell a marketing blog or a fake commentary a mile away,” says Crane. lesson No. 4: Redefine ROI

CLIENT/CAMPAIGN Microsoft’s business software lineup—Office, Windows Vista, Windows Mobile and Exchange Server—was launched in March 2006 with a $500 million campaign tagged, “Software for the people-ready business.” More than $50 million was allotted for digital ads.



STRATEGY The campaign’s goal is to be “a perception-changing experience,” convincing business execs that Microsoft has new team-productivity products “that they would be willing to bet their business on,” says David Grubb, Microsoft worldwide media director.

Broadcast spots ran during the NCAA March Madness college basketball tournament and were integrated with online ads and sponsorships on CBS companion sites that promoted the games. Microsoft also advertised during TV drama 24 and exclusively sponsored a section on the Fox companion site, 24 Inside. Other ads run in news-oriented content in print, cable TV and radio. Streaming video ads appear on MSN Video.

All ads take users to Microsoft’s “People Ready” site, which features case studies and white papers explaining the software technology and promoting current and future Windows and Office products. Also included is repurposed content from Fortune, Forbes, Harvard Business Review, The Economist and The Wall Street Journal.



LEARNING CURVE If you don’t know by now that ROI is more than just sales figures, then you’re in the wrong business. Microsoft defines its return on investment not only with financial numbers, but also in terms of its investment in knowledge about engaging the consumer and cross-platform marketing. That knowledge is crucial for its current and future marketing plans, say Microsoft insiders.

So, what content better speaks to consumers: college basketball or Keifer Sutherland? Tracking showed more execs who watched 24 were motivated to spend time on Microsoft’s site than execs who watched the March Madness basketball games. As for companion sites, 24 Inside attracted more total traffic and sent more of those visitors to the Microsoft site than the CBS Sportsline People Behind the Scenes site about March Madness, despite the games’ high ratings. “Content that is highly interactive and time sensitive, such as a live sports tournament, does not encourage traffic to our sites,” says Grubb.

In examining traffic to the business articles on its People Ready site, Microsoft has quickly learned which publications and topics warranted the most clicks and greatest time spent. That knowledge allows it to drive harder bargains when buying space. “It changes the currency of what we negotiate when we advertise with those publications,” says Grubb.

The complex process of measuring is handled by McCann Erickson, Universal McCann and MRM, which operate as a client team under the same roof in San Francisco, according to Steve Soldano, Universal McCann global brand manager. The agencies measure traffic from all ads to Microsoft’s home page and People Ready site, and the time spent at each Web stop along the way. Brief online surveys and polls provide qualitative data. The team reviews the data and analysis and sends client reports each month.

Microsoft also works with Dynamic Logic, which posts surveys on multiple Web sites asking users who have seen the People Ready ads about their attitudes toward the campaign.

“Measurement is not about collecting raw data, but about the insights that come from interpreting the data. And for that you need context,” and a sense of the big picture, says Soldano. “Digital media is constantly evolving; you can’t assume what works with one campaign will work the same way on the next.” Because Microsoft is looking for perception changes, “we also have to give it time and study results over multiple campaigns,” says Grubb.

Execs say it is too early to see large perception shifts, but they have gathered valuable info on how their target responds to online marketing. The bottom line is also showing positive results. From April to June 2006, sales in the Information Worker category, which includes Office, were up 6 percent, and sales of Windows XP rose 13 percent from April to June 2006. Overall, the return of info and revenue on their digital investment has proven solid; digital marketing’s slice of the client’s marketing budget is expected to be bigger next year, sources say.



lesson No. 5: BE FAST AND FLEXIBLE

CLIENT/CAMPAIGN Atlanta-based Georgia-Pacific’s Brawny Academy, a series of Web-based episodic digital reality shows promoting paper towels, launched May 29. The campaign started with a 60-second ad from Fallon, Minneapolis, designed to drive traffic to the Brawny Academy Web site where viewers could see each episode. New episodes appeared every two weeks, and Fallon also prepared 30-second teaser spots that would run every two weeks based on the upcoming episode. Interactive shop Critical Mass, based in Chicago, handled Web banner ads for the campaign. G-P spent $3.6 million on Brawny ads in June and July, according to Nielsen Monitor-Plus.



STRATEGY Want a husband who learns how to put down the toilet seat and mop up red wine stains? G-P’s goal is to get women excited about the brand by training their husbands to be more compassionate and do housework. G-P created a series of Webisodes in which husbands, nominated by their wives, learn specific cooking, cleaning and child-rearing techniques. A 60-second teaser ad on TV was designed to reach a wide audience and encourage consumers to visit the Brawny Academy site. The first Webisode appeared June 12, which included original content from G-P, and was designed to drive the rest of the campaign.

But when the 60-second teaser didn’t live up to expectations, G-P turned on a dime by changing both the creative and the type of ads it was using to reach consumers.



LEARNING CURVE Dan Dooley, G-P’s senior manager of digital marketing, will not disclose specific numbers, but says he didn’t like the amount of Web traffic he was seeing after the initial 60-second ad and the promo spots. Within 10 days of the Web launch, he asked Critical Mass to create a solution to drive more traffic to the Brawny Academy Web site. Critical Mass chose a rich media solution by placing a 30-second video with unused Brawny Academy content from Fallon within a banner ad that consumers would see on sites targeted at women, such as iVillage. When consumers moved their mouse over the banner, a 30-second video would appear. Consumers could then click through to watch the full episode on the Brawny Web site.

“When you launch a campaign, it doesn’t mean it’s over,” says George Panopoulos, Critical Mass’ e-marketing director. “We watched, we learned, we got data and we changed.”

Meanwhile, G-P monitored consumer calls about the campaign and learned that women wanted to know more about the husbands who were participating. “The wives were calling to say, ‘My husband is like this guy,’ and they were asking how they could get their husbands into the camp.” So the decision was made to focus the creative in the 30-second videos on the husbands going through the process.

“New media provides you with the ability to challenge your assumptions on the fly and then create tactics from those assumptions that you challenge,” Dooley says. “It would take weeks to turn around a TV spot in the same way unless you are just re-editing old footage.”

Fallon also learned that Webisodes don’t always follow the rules of broadcast TV. It was treating each Webisode like a TV show by running promo ads for each. But not all viewers kept up with each episode, says Chris Lawrence, Fallon’s group account director. “We were trying to borrow a lesson from broadcast TV and midway through we realized it may not be working,” he says. “We were promoting episode 4, but people had not seen episodes 1-3, and didn’t want to take the time to go back and catch up.” So the agency changed the promo spots to just show the idea of the academy.

Lawrence sums it up: “There is an experimental nature [to new media], and you have to have a client that has the courage to accept the risk, go forward and be willing to make changes along the way.”