I've been in Las Vegas this week at the Electronic Retailer's Association's annual conference. One of the sessions I attended called, "Increase your ROI with New Technologies" took at look at emerging (or already emerged, depending on your perspective) technologies that can driving business for retailers.
One of the presenters, Todd Narwid from Narrowstep, brought up some interesting points about how the retail industry is changing:
Marketers are not keeping up with shifting changes. He sees marketers as slow adopters of social networking and online video as marketing solutions. As I see it, there are two reasons for this: 1. It's easy to stick with what's worked; 2. Metrics are in place for older marketing strategies; 3. Companies billing based on a percentage of ad spend have no interest in advertising strategies that are more labor than cost intensive.
Narwid suggests that first mover advantages are huge in areas like online video, which makes sense since any new marketing strategy will reward first movers.
Broadband penetration and online video continue to grow. Is this still an effective marketing talking point? Are businesses really clueless enough to think, "I suppose people aren't dialing-up that much anymore?"
Anecdotal data can win over empirical data in many cases when it comes to justifying ad spends. In no way unique to this discussion, but clearly an interesting point. I could see pitches being developed around the concept of, "Your kids are on YouTube all night, right? So why aren't you advertising there and creating company videos for YouTube?" A compelling, but not necessarily rational, argument.
Narwid's most interesting nugget came when he mentioned this:
Online conversions increased 5x for a client among people who watched a video associated with the product.
Video is powerful stuff. Having a video that helps explain the features and benefits of a product is clearly going to help close more business than a web page without video. In a sense, we're seeing the creating of an entirely new division of the infomercial industry around on-demand web-based infomercials.
Narwid built upon that by explaining the relationship between online and offline advertising, explaining that advertisers should, "Drive people to a more compelling argument."
And that's really the point. The web allows people to go deep in their research of products and services that interest them. Their interest may not have started online, but that's where the research is done. Effective use of advertising - online or off - drives people to a website where people can hear your most compelling arguments on why they should buy from you or work with you.
1. Posted by: Kenneth on October 3, 2007 12:15 PM:
You bring up great points on how conservative actions like sticking to what's known, relying on established metrics, and needing complete understanding of the entire benefit can stifle growth. These actions are great in predictable markets, but predictable usually means slow growth. Stepping outside of these boundaries is risky. The fortunate part is that risk usually has a huge upside and small downside. It is just the point of Nassim Nicholas Taleb's Black Swan.
I just read Gut Feelings: The Intelligence of the Unconscious by Gerd Gigerenzer which steps through why Anecdotal data can win over empirical data in many cases. Emprical evidence is often rigorous and highly useful. It's fault is that it often takes a long time to gather, even when sampling. The other fault is that people don't like to process data to the depth that it is provided, I mean, how often does someone even challenge another's methodology or ask for a basic review. If you trust the source and it "looks" right, matching with environmental clues you pick daily, then you trust the result.
Shoot first and ask questions later is a good strategy if someone is shooting at you and in the world of technology, someone is often shooting or at least about to beat you to market.