Groupon IPO $25 billion? Only time will tell...

The idea that a coupon company could be worth so much is crazy. Coupons are only a small fraction of a companies marketing mix while in contrast, advertising (Google) demand a constant investment.

However, it is also hard to ignore Groupon's stellar growth. The two year old start up has announced that it has expanded its presence from 1 to 35 countries and from 2 million users to more than 50 million last year alone. Bloomberg has announced the comany's IPO worth to as much as $25 billion; beating Google by $2 billion since it went public in 2004.

Not bad considering that at the same time last year the company was valued at $1.3 billion. It has also since then raised over $950 million in investment capital. Its to early to say whether Groupon backing down from Google's $6 billion offer was stroke of genius or simply a bad call.

Investors like Ben Horowitz, a partner at Andreessen Horowitz, says that he is not worried about new competitors due to Groupon's huge sales force size that will make it hard for competitors to scale up.

The only issue I take with Groupon is that its business model can be easily replicated, thus leaving it susceptible to substitution by consumers. Groupon has to work hard at differentiating itself in both quality and service to make sure that it will endure.

Sources

http://venturebeat.com/2011/03/17/groupon-25-billion-ipo/

http://venturebeat.com/2010/12/03/groupon-rejects-googles-offer/

http://dealbook.nytimes.com/2011/03/17/groupon-valuation-soars-as-possible-i-p-o-nears/?src=dlbksb

Face Recognition, Social Media Marketing & A New Wave of Privacy Invasion

Facial recognition software is sure to take hold in the near future as the latest tool for social media sites and direct marketing campaigns. The implications of such software developments will increase direct marketing accuracy, increase social media interaction and for sure begin a new wave privacy invasion.

Today, websites like face.com, that has developed face recognition software that allows users to scan internet for pictures of themselves, makes it easy fro any one to upload a picture search and put a name to every face on the internet. On one hand, this might be a helpful tool for a user to find and delete pictures they would not otherwise like to be posted.

On the other hand, for example, this gives employers an unprecedented power to find a slew of information both public and private that might cause discrimination of employment. For instance, an employer could get a hold of an applicants’ mug shot even if the applicant in question may have had all charges acquitted or found not guilty. The point is it doesn’t matter! If a picture of you that you do not approve makes its way on the Internet, finding it and putting a name to the face is now easier than ever.

Facial recognition technology development also has the potential to become an invasive and creepy advertising tool similar to scenes from the movie “Minority Report,” where digital hologram ads address a person directly by name. This scenario is not far fetched nor far from manifesting as the electronic giant, NEC, has already been testing its take on facial recognition ads in malls throughout Japan. The humanoid billboard has the capacity to scan passerby shoppers faces and indentify the shoppers sex, ethnicity and approximate age with an 80%-95% accuracy. The humanoid billboard then reaches into its database and begins to bombard the shopper with suggestions of products they might like.

As facial recognition technology advances and its accuracy increases we are sure to see and even more aggressive and personalized “face” to social media marketing and direct marketing in general. This is sure to become another reality of living in The Digital “Marketing” Age.

Sources:

http://www.dailymail.co.uk/sciencetech/article-1305191/Facial-recognition-software-allow-ability-identify-people-photographs-internet.html

face.com

http://www.guardian.co.uk/media/pda/2010/sep/27/advertising-billboards-facial-recognition-japan

http://www.youtube.com/watch?v=nQbVD5hlddk&feature=related

Myspace Needs to Win Social Media Content War

Myspace needs to cover its loses and realize that the social networking battle is over and that Facebook has won it. At this point, Myspace needs to redefine what having a Myspace means and how it’s different from Facebook. Granted, Myspace’s music integration is a step in the right direction, but its still not enough; especially since the introduction of Ping, a social network for music just recently launched on the iTunes store . Myspace has to step out of the confines of its old identity as the once “biggest social network in the world,” and start thinking about what they can become. I believe Myspace should simply look at its name and realize what it offers. It is literally a space on the web for people to manage, interact, share, work, play, entertain, read and whatever else they want to do on the internet.

Think about it, Facebook, in its very essence, is a social network that helps people connect and manage the social aspect of their lives; for the most part. But, what about all the other aspects of our lives like business, hobbies, interests, news, fashion, shopping, politics, music, the environment, social issues, economics and so forth? This is where Myspace needs to concentrate its efforts and capitalize on its still impressive, 70 million monthly visitors in the US alone. Myspace stands at a cross roads with very unique advantage over other media portals, it has a social network set up.

As Jason Nazar, Co-Founder and CEO of Dotstoc.com outlines in step one of his article “How to Save Myspace: The Seven-Step Plan,” Myspace should compete with sites like Yahoo as a next generation portal. Myspace can enter the market with its user database advantage and create a social media content network in which users can manage all the other aspects of their lives besides social. Users should be able to profile the various areas of interest in their lives with website bookmarks, news feeds, articles, music, video, photos, original works, blog postings and anything that is relevant to their particular interests. This in turns truly makes myspace a virtual space where users can organize and manage the various aspects of their lives with all the tools and benefits that the internet has to offer.

Along with content overhaul, Myspace needs to retract from its intrusive and irrelevant ads to users. As Matt Rosoff of CNET.com states in “How to Save Myspace,” the company needs to make its ads relevant to the user's profile. Many people complain of the amount of irrelevant and cheap commercial product ads they get on their user page; not to mention how big and intrusive they can be.

In short Myspace need to think beyond the confines of social networks and embrace the managing of users content and media desires from all over the web. That’s what I would call my space on the web. Just another reality of adapting in the Digital “Marketign” Age.

E-Marketers Beware: Product Performance Claims, Pricing & Consumer Buying Process

E-Marketing has changed the way consumers interact, communicate and most importantly make purchasing decisions of a brand’s product or service. Brand marketers and advertisers now have a wide array of mediums through which to reach its target audience. For instance, product ad placement has never been easier and more precise than with search engines like Google, Bing and Yahoo. Never have advertisers been able to obtain such detailed information about its consumer’s likes and dislikes than through Facebook connect or “likes.” Advertisers can also ride the waves of success of others through ad placement on popular YouTube videos. Even highly informative and intuitive interactive ads can be readily accessible to iPhone smartphone users since implementation of iAd to the iOS platform.

On the flipside of the same coin, never have product advertising claims been up for such widespread scrutiny and comparison. With thousands of product review sites, published consumer reports, and social media buzz, brands must make sure that their product claims are true. Doing a fact check for a product/service ad is as simple doing a Google search for a product review or discussing with friends or groups on Facebook that have already used the product/service. According to a study conducted by GroupM search and comScore called, “The Virtuous Circle: the Role of Search and Social Media in the Purchase Pathway,” before purchasing a product, 58% of respondents turned to search engines such as Google and Bing, 24% visited a company website, and 18% went on social media sites.

Another arena where consumers are grabbing a foothold and leveling the playing field in their advantage is through the use of comparison-shopping application on smartphones such as Red Laser. Finding competitive pricing in nearby retail venues is as simple as entering a store scanning a desired product’s barcode and finding the pricing and location of the same product at a retail venue near you. The article by Time, “How Smartphones Level the Playing Field for Shoppers,” gives amazing insight as to how consumers can now have price transparency.

For marketers this means that though they have gained huge audiences through e-marketing, they also much consumer confidence to lose if their products don't match up to their ad claims. For retailer it means that competitive pricing is readily available and thus their pricing must be able to compete. This is just another reality of living in the digital “marketing” age.

Sources:

http://advertising.apple.com/

http://redlaser.com/

http://www.informationweek.com/news/internet/social_network/showArticle.jhtml? articleID=229219363

http://money.blogs.time.com/2010/12/16/how-smartphones-level-the-playing-field-for-shoppers/

Social Media Marketing: Not as Easy as Socializing

Social media and marketing is not an engagement to be taken lightly by any means when it comes to building promotional campaigns and brand awareness. First and foremost, the social media platforms demand constant updating, interaction and communication to its recipients. Without this constant interaction a product or brand campaign is sure to die in the flurry of wall post and updates that already invade users Facebook and Twitter pages. Secondly it has to engage its by responding comments or intriguing the user to interact with questions or games.

Just recently my good friend Jorge Jaimes started a Facebook campaign to launch his 3D animation Nutty Heads. With over 60 unique character animations to introduce to the market, Jorge is constantly creating and posting new comic style newsletters with his animations engaging in funny situations and commentary. He even goes as far as leaving occasional comments on his most frequent visitors pictures and posts as well as responding to posts with one of his main characters Moe Green. This constant tailoring of messages and graphic design, though tiresome, has paid off as he has already gained over 2,000 friends on Facebook in less than 3 months. He has also found that many people are posting different Nutty Head characters according to their mood or liking.

Another fun and engaging social media campaign was the one launched by Burger King back in 2009 when they made the “Whopper Sacrifice” Facebook app. The concept of the app essentially was that if users deleted or “sacrificed” 10 of their Facebook friends then they would get a free whopper. The point of this campaign was to strike up controversy and publicity, which it did and thus got the message out. The fact that more than 50,000 friends were deleted during the time the app was up and running certainly points out how engaging the campaign was; as well as how we can use Facebook friends as currency.

Starbucks " Pay-By-Phone" app... Genuis!

I believe that Starbucks "Pay-By-Phone" app is a brilliant step in the right direction for a couple of reasons. First, in todays digital age and technology entrenched society, it is more unlikely that you will forget your wallet in the car than your phone. Today, users are in such a constant interaction with their smartphones that they might as well classify it as a bodily limb. Whether it’s Facebook, Google search, e-mailing, texting, playing games or making a call, smartphones are indispensible to the end users who own them. An expression that I often use is that I feel naked without my phone. A notion that I find many share considering how much utility my iPhone has on my day-to-day life.

Second, users being able to check their reward points or account balance gives users more intent of participation than a simple debit card. Think about it, "Out of sight out of mind." The fact that consumers can now check how many more lattes they need in order to get the next one free or whether they can afford that mocha-frappachiato drink without having to check at the register is priceless. Not to mention the app also tells you where the nearest Starbucks is to you. Convenience is everything and so the app delivers just that. People today are way to busy to be worrying about checking their reward points online or at a physical register. Why not have all that crucial information to this trivial aspect of your life a short button push away?

Lastly, Starbucks has stated that up to a third of its costumers have smartphones and that those numbers are bound to grow due to the increasing growth of smartphone sales every year. In an intelligent move to address demands of this growing market, Starbucks switched to free Wi-Fi rather than paid thus giving all those data hungry smartphones a place to unload from those saturated 3G networks that everyone is complaining about. It’s even gone as far as teaming up with Yahoo to launch its own Digital Network with exclusive content that can only be accessed at store locations. Starbucks is well aware of the growing tech consumer population and it is doing its very best to retain and grow that base accordingly.

In essence the app offers convenience, builds consumer intent of participation in reward programs and is grasping onto the growing trend of smartphone users in the market.

http://technorati.com/technology/article/new-starbucks-pay-by-phone-will/

http://iphone.firstblogfirst.com/2011/01/24/mobile-payment-debuts-nationally-at-starbucks/