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July 30, 2010

Groupon personalizes the daily deal

Filed under: advertising, local search, marketing — Rocky Agrawal @ 12:10 pm

Groupon announced a shift from its approach of the same deal for all email subscribers in a market to personalized deals in select cities. CEO Andrew Mason says that there is a backlog of 35,000 businesses waiting to be featured on Groupon and that 7 businesses are turned away for each that is featured.

Offering more deals makes sense for Groupon, for consumers and for businesses. It will lead to higher engagement among consumers, more revenue for Groupon and better results for businesses:

  • Higher engagement. As the novelty of the daily deal wears off, email open rates will decline. In my own usage, I’ve found that many businesses featured are outside the area that I’m willing to travel. If I know that deals are more local and more relevant, I’ll be more likely to open the email.
  • More revenue. Having multiple deals allows Groupon to capture revenue from more people because deals will be more relevant. The user data collected will also help with getting businesses on board — sales people will be able to say we have X thousand customers within a few miles of your business.
  • Better results for businesses. One of the concerns that small businesses have with offering big deals is attracting only deal chasers. The ideal customer is someone who will convert into a regular and pay full price. Someone who is willing to drive 30 miles to save $10 will likely have a low or negative lifetime value.

Mason says the first cut of personalization will be dumb, using limited data such as ZIP code, gender and age. While location is important, it does come with a couple of caveats:

  • Location is often directional. People living in Manhattan are much less likely to go to New Jersey for a deal than the reverse.
  • Its importance varies by business. People will travel farther to go skydiving than for a restaurant or bakery.

I’m not as convinced on using gender, age or other factors to target deals. Many of the deals have wide appeal and part of the value of products like Groupon is their serendipity.

July 29, 2010

Why small businesses are snapping up the daily deal

Filed under: advertising, google, local search, marketing, yelp — Rocky Agrawal @ 1:05 pm

A sample daily deal from Living Social.

In recent months, we’ve seen daily deal sites like Groupon and Living Social grow like crazy. Groupon is valued at $1.35 billion. That’s more than 4x the valuation of the McClatchy Company, one of the country’s largest newspaper publishers. It also ekes out The New York Times Company. Others are scrambling to get into the business, including DealPop in Seattle and CrowdCut in Minneapolis. Yelp is also testing its own entry in Sacramento.

A while back, I wrote about why small businesses were reluctant to get online. So what changed?

Well, the daily deal providers addressed most of the challenges I laid out.

  • No one was asking them to get online; now they are. Groupon, Living Social and others are rapidly building up local sales forces to approach small businesses.
  • It’s a lot simpler. Bidding on keywords is beyond the experience level and time commitment most small businesses can afford. Putting together a special offer is much simpler and the daily deal sites are doing a lot of hand holding. Even Google has realized this, with simplified pricing for its Google Tags product aimed at small businesses.
  • There’s no upfront commitment required. Unlike most advertising products, businesses don’t have to spend hundreds or thousands of dollars on an ad and pray that it works. Instead, they get paid for the deals sold before they’re actually redeemed.
  • Results are evident and compelling. Businesses can clearly see how many people are buying their deals in real time. They can also see customers as they walk through the door with the coupons. It’s a lot more trackable than other forms of advertising.

On the consumer side, the daily deal sites have turned coupons from something that were looked down on to a fun, social thing. Friends who wouldn’t use coupons in the past are touting the great deals they’ve found online.

A big challenge for providers will be providing enough new businesses to keep the deals interesting. Many of the deals I see these days are too far to drive to; a metro area is too large a geography. As the novelty of the daily deal wears off, deals will have to be more targeted based on location to avoid becoming perceived as spam.

July 4, 2010

United’s mobile check in not ready for takeoff

Filed under: advertising, airlines, customer service, mobile, ui, wireless — Tags: — Rocky Agrawal @ 8:00 am

On my last trip, I had the opportunity to try United’s mobile check-in and mobile boarding passes. The promise is paper-free check in. It sounds really great, but it’s not quite there. Partly it’s due to United’s horrible user interface, partly the newness that gate agents aren’t accustomed to it.

The user interface rarely misses an opportunity to add extra steps.

  • When online check-in opens up, United sends you an email reminding you to check in. But clicking on the link in the email takes you to the full browser version. (It should automatically redirect you to the corresponding page on the mobile site if you’re on a mobile browser.)
  • When you go to http://mobile.united.com, you have to enter your confirmation number (who remembers these?), e-ticket number (ditto), Mileage Plus number (I don’t remember it despite being a top tier flier for years) or email address (long to type). There’s no way to just cookie your email address or MP number for all future check ins.
  • You’re presented with upsells, including the ridiculously overpriced Award Accelerator. (No way to say “I never ever want this.”)
  • After you finally check in, you’d think you get a boarding pass. But now you have to enter an email address to send the boarding pass to. (Never mind that you just logged into your account with an email address; it’s not prepopulated.)
  • You’d think, “OK, now, I’ll get an email with the boarding pass.” Nope. You get an email for each segment. Neither of which contains a boarding pass, but a link to a boarding pass.
  • Instead of using one link tied to your record, there is a link for each flight. If you click on the email for the wrong flight, you can’t just flip to the other flight. You have to go back and open a different email.
  • When you finally get to the boarding pass, you see a 2D bar code read by the scanner, along with your flight and seat information in text.

After doing all of this, I went to the airport without any paper. First step: security. The TSA agent looks at my ID and phone to compare names. He then has me hold my phone over a reader. It beeps and lights up in green. Good to go. At the gate, I hold my phone over the reader. Beep. Green. Board.

At the gate for my connection in Denver, I get paged because the agent wanted me to swap seats with someone else. She asks for my boarding pass. When I say I’ve got a mobile one, she prints out a boarding pass with a new seat assignment. Being a geek, I refresh the screen and see that it shows the new seat and ditch the paper. Unfortunately it doesn’t scan and she has to board me manually.

Leaving SFO, I had to standby for an earlier flight because of weather. Although the boarding pass initially showed my standby status, somewhere along the way that disappeared. (Causing me to panic and race to the big screens in the gate area to verify that I was still on the list.) When I cleared standby, the agent called me up and issued a paper boarding pass. The link I had showed no boarding pass.

In a future ideal world, my phone would beep when I cleared the standby list, I’d click to accept and the screen would show the updated boarding pass. It would free up the mob around the gate, let me get a drink or food and get the plane out faster.

In Denver, my original mobile boarding pass was still valid. It took some fiddling to get it to scan. I thought 2-D bar codes could be held in any direction, but that didn’t seem to be the case.

Note that although the boarding pass is generated dynamically, the information is static. If your flight is delayed, you won’t see that reflected. You’ll have to go back to http://mobile.united.com and enter your flight information. It also self destructs after a flight, so if you need documentation for business purposes or making sure you get your frequent flier miles, you might want to stick with paper. (In theory, it shouldn’t be needed for miles purposes, but I don’t like to rely on theory when it comes to airlines.)

More on: airlines

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June 30, 2009

Bing, Yahoo! try to capitalize on Google’s Michael Jackson traffic surge

Filed under: advertising, aol, bing, google, search, yahoo — Rocky Agrawal @ 2:23 pm
Bing, Yahoo! ads on Michael Jackson results on Google

Bing, Yahoo! ads on Michael Jackson results on Google. Click to see full version.

Seen over the weekend: ads for bing and Yahoo! on Google search results for “Michael Jackson”.

The bing ad led to bing’s xRank page for Michael Jackson. The Yahoo! ad bizarrely led to a Yahoo! shopping results page for Michael posters, most of which had nothing to do with Jackson.

The bing ad appeared every time I reloaded the page. The other ads were much less frequent.

Update: AOL has joined the fray with ads for AOL Music, including a pitch to download a “Michael Jackson tribute toolbar” on the landing page.

October 15, 2008

Ads that work: CapitalOne Card Lab on flickr

Filed under: adsthatwork, advertising — Rocky Agrawal @ 6:04 pm

There’s so much ad clutter out there that it’s rare to see an ad that really hits the nail on the head. Here’s one that jumped out at me: an ad for CapitalOne’s Card Lab. CapitalOne lets you customize many features of your card, including the interest rate and promotions. It even lets you upload your own image for the front of the card. A perfect fit for flickr users.

September 11, 2008

Slice, dice, repackage and resell

Filed under: advertising, journalism, media, newspapers — Rocky Agrawal @ 12:03 am

The newspaper business has missed out on a lot of opportunities over the years. Here’s one they shouldn’t miss: repackaging content for niches.

Most major markets have an industry specialization or two. In Detroit it’s the auto industry. Minneapolis has retail and medical devices. Charlotte has banking. Each of those industries has a number of companies in it.

Because I work on automotive products, I frequently end up on the Detroit Free Press’ site. Usually it’s because someone sent me a link or I found the story through an aggregator. Freep.com has a business front page, but often those stories there aren’t relevant to me. There should be an easier way: I should be able to subscribe to feeds about the auto industry and the companies I follow. A halfway decent publishing system should make this a very simple process.

A few newspapers are doing this already. The Seattle Times has feeds for Boeing and Microsoft. The Houston Chronicle has a feed for the energy industry.

But they don’t seem to be capitalizing on the advertising opportunity. Having a highly targeted business audience makes that traffic much more valuable. A conference that is targeting decisionmakers in the auto industry can spend a lot more than the spam ad inventory that is classmates.com. (Which is what currently appears on the Freep page.)

Newspapers can also serve other niches depending on the local market. The most obvious is out-of-town fans of local sports teams.

September 1, 2008

Your customers are Twits

Filed under: advertising, customer service, lbs, local search, marketing, social networking, twitter — Rocky Agrawal @ 3:58 pm

Last year, I blogged about how local businesses could use Twitter to reach their customers. In that hypothetical example, a street vendor would let regulars know whether he was working or not.

A number of large companies, including Zappos, Comcast and jetBlue are already using Twitter to engage with their customers. As Twitter’s popularity grows, it will cease to be a tenable channel for customer service.

But for local businesses, it’ll be a great opportunity. Witness this exchange between Twitter developer Alex Payne and 21st Amendment Brewery.

Twitter exchange between Alex Payne and 21st Amendment brewery

Twitter exchange between Alex Payne and 21st Amendment brewery

Three of the big challenges in getting local business online are that it’s too expensive, too complicated and too hard to prove the return. A Twitter presence can address all three:

  • It’s free.
  • It’s easy. You don’t have to create a Web site to reach your customers. If you don’t have one, your Web presence can be your Twitter page. Not ideal, but better than nothing — at least it’ll get you into search engines. If you do have one, you can autoflow Twitter updates to your Web page making it easy to keep your Web presence fresh.
  • It’s easier to prove return on investment. Twitter can improve both the “R” and the “I”. You can see who’s following your business, showing return. Because there is no cost and the effort is lower, the investment is lower.

There are a number of ways businesses can use Twitter:

  • Specials of the day. “Soup of the day: tomato basil”
  • Special events. “Windsor Cooley book signing Friday night” “Closed for private party”
  • New products. “Transcontinental IPA on tap at the 21A”
  • Problems. “Closed due to broken water pipe”

The immediacy of Twitter also offers a way to do real-time inventory management. Have an especially slow night and food going to waste? Send out a tweet with a special discount.

More on: Twitter

Why don’t local businesses use the Internet?

Filed under: advertising, lbs, local search, marketing, newspapers, yellow pages — Rocky Agrawal @ 2:15 pm
John makes a burrito with his goose sauce

John makes a burrito with his goose sauce

Back in the mid 90s, I frequented The Weinery, a total dive of a hot dog place in the Cedar/Riverside area of Minneapolis. Jerry, the then owner, collected email addresses and would occasionally send out specials. Say the password when you placed your order and you got a discount.

The other day, I received an email from John at Pedro & Vinny’s. John ran a burrito cart in downtown DC. (I wrote about John’s honor system earlier.) He moved away a while back. Friday’s email announced that his burritos will be hitting the DC streets soon.

But John and Jerry are rare among small business owners. In the last 13 years, Internet use has exploded and tools have gotten easier and easier. Yet few local businesses do a good job of communicating with their existing customers and reaching out to new customers.

To be fair, they haven’t been in the habit of advertising. Before the Internet, the key local outlets were newspapers, television, radio and the yellow pages. You essentially had to buy the entire DMA for thousands of dollars. Direct mail (Valpak etc.) and Entertainment coupon books were among the few options that made economic sense.

The Internet has drastically changed the economics. Publishers can slice and dice virtually infinite inventory into smaller and smaller buckets and make advertising affordable for small businesses.

So why aren’t small businesses advertising online?

  • No one is asking them.  Publishers (by and large) haven’t changed their compensation systems for sales reps. If I were a sales rep, I’d much rather work on selling the full page ad for $10,000 than an online presence for $100.
  • It’s too complicated. Search advertising seems like a prime opportunity for local businesses because it can be highly targeted. But the interfaces and the structures are well beyond the skills or interests of small business owners. They’re too busy running their businesses to run keyword campaigns.
  • They’ve been burned. Most restaurant sites look like they were built solely to show off the Flash skills of the design firm. The restaurateur spent hundreds or thousands of dollars for a site that doesn’t drive any foot traffic because it’s unusable and doesn’t show up in search results (because everything is Flash or an image).
  • It’s hard to see the return. Online advertising is a slam dunk for businesses that can complete the transaction online. They can see what they’re getting for their money. It’s harder to show that value to businesses that rely on foot traffic.
  • No need #1. In a town of 500 people, there’s no need to advertise. Everyone knows who you are.
  • No need #2. If you’re the hot new restaurant in town and there’s always a wait to get a table, why spend money on ads?

August 31, 2008

The ad is a lie

Filed under: advertising, airlines, travel — Rocky Agrawal @ 12:18 pm

While watching the Olympics, I was struck by a gorgeous animated ad. A lobster conducts an orchestra of other sea creatures playing Gershwin. As soon as I recognized Rhapsody in Blue, I knew it had to be a United Airlines commercial.

The beautiful ad is in stark contrast with the product being advertised. We all expect exaggeration in advertising, but for the most part the product doesn’t even exist. I’m not talking about cramped seats or the fees for everything but using the toilet; the ad is one of several new commercials for United’s new international first and business class.

United’s premium products have significantly lagged their competitors, especially when compared with foreign competitors. Virgin’s and British’s business classes are much nicer than United’s first. United’s new product is a significant step forward.

The problem is that most of United’s international fleet hasn’t been reconfigured for the new product. If you buy the advertised product, chances are you’ll get the older, vastly inferior product. According to the FlyerGuide Wiki, only 11% of the fleet has been reconfigured:

Completed aircraft: 11 out of 96
Completed B747-400s: 4 out of 29
Completed B767-300s: 7 out of 21
Completed B777-200s: 0 out of 46

Good luck getting the 180-degree flat bed seats they talk about in the Butterfly and Moondust ads. There is no way to ensure that you’ll get the new product. Veteran frequent fliers play guessing games on FlyerTalk’s United forums. While you can improve your odds based on picking the routes or studying United.com seatmaps you’ll only know for sure when you step on the plane. There is a way to ensure that you don’t get the new product: buy a business class seat on a 777. None of those have been converted.

United deserves credit for making the ads easily available online, something more companies should do. The clip of the Heart commercial includes a “making of” commentary by Dennis Cary, United’s SVP of Marketing and behind the scenes interviews with the artists.

As art, the ads are some of the most creative and visually engaging ads I’ve seen; they’re downright stunning when viewed in HD. If they do their job and gets people on United’s planes, there’s a really good chance they won’t be crossing the oceans on United again.

Desi shoutout: According to United’s description, Moondust was animated by an Indian. “Ishu Patel, an Indian-born and Canadian-based animator, used his world-renowned back-lit technique in which a thin layer of plastic modeling clay is applied to a glass plate that has a 1000-watt light positioned beneath it and an animation camera above it.”

See also:

January 5, 2008

Weekly Reader – Jan. 5, 2008 – Pricing, advertising and DVRs

Filed under: advertising, marketing, television, weekly reader — Rocky Agrawal @ 11:13 pm

This week’s interesting reads:

  • Some thoughts on pricing (Redeye VC) – First Round Capital’s Josh Kopelman examines pricing strategies. He starts with pricing of soda in a hotel and found a range of $1 to $4.50. The overall range is incredible — you can get the same amount of soda for 35c to $6. Even airfares don’t vary this much on a percentage basis. How do you pick among various choices if the only thing you know is the name of the company and the price? When it involves child care, he goes with the most expensive.
  • Ad Houses Will Need to Be More Nimble (WSJ) – The Journal takes a look at the challenges facing ad agencies as clients demand more accountability and integrated campaigns. Agencies have largely been slow to adopt to the rapidly changing media environment and audience fragmentation.
  • Looking at Data Through a DVR (WSJ) – The advertising business continues its slow march from relationship-based buying to data-based buying. As DVRs and settop boxes proliferate, they increase the amount of real data advertisers have to work with. Services like Tivo’s StopWatch allow advertisers to get second-by-second response data.
    The right way to do TV advertising is to insert commercials dynamically at playback instead of a static recording at the time of transmission. Unfortunately, there are many structural barriers to this happening. This is likely to happen first in Web-based playback and will migrate to the TV.
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