Putting Money in the Meter…Microsoft CashBack

I’ve had a chance to think a little bit about the discussions this week on the “Future of Search” panel and truthfully, I’m a bit confused.

I’ve decided to reflect on Microsoft's presentation because I have been patiently waiting for internal feedback on the consumer search incentive program they launched this spring. Martin Stoddart, Senior Product Manager of Microsoft Live Search gave quite an optimistic view on Microsoft’s future in the search game earlier this week at IAB MIXX and I’d like to share some of his thoughts on how Microsoft plans to slay the dragon (disguised in librarian clothing).

Stoddart’s view is that disruptive forces are at work pushing the search product to a new level (phase 3) that is geared towards the more experienced search consumer demands for enhanced results (rich semantics for example), paid engagement & rewards.


Honing in on the disruption, Stoddart described Microsoft’s consumer reward system as a much more attractive and advanced business model than the “aging” cost per click method. In May 2008, there was a big roll out of the CashBack program and Stoddart highlighted the model as a success. Although he didn’t share numbers on the program which is currently only available in the US, he sounded pretty convinced about the direction things were going.

Here’s where (my) confusion sets in…

Essentially, Microsoft has created an enormous consumer affiliate program to encourage searches on its platform and in doing so, has created somewhat of a closed market environment where users will get cash back or discounts on purchases made from Microsoft merchants.

So I’ve stumbled hard on the oxymoron of “enhanced results, rich semantic search etc.” and the proposed closed search (commercial) environment. How can your search be rich and closed at the same time? It feels a bit like AOL circa 1995 no?

In theory, affiliate programs can be successful at capturing market share but with the growing trend of consumers demanding transparency, mobility and freedom to select from infinite online options, the thought of receiving rewards for a finite list of merchants seems archaic and somehow (for lack of a better term) uncool.

Martin went on to describe some of the features that were in development at Microsoft. All of them made a lot of sense and it’s true that Microsoft has all the assets to string together the laundry list of enhancements required to compete over the next few years.

I guess my question is whether paying consumers to come to a relatively closed environment will hold down the fort while Microsoft works on developing the items that are required to deliver rich results to the users of the future. By holding down the fort I mean: drive loyalty, maintain its already battered market share or optimistically, steal from the dragon’s lair. In a way it feels like the company is putting money in the meter while it dashes around internally to come up with the phase 3 experience.

I'll dig around the media buying side over the next few weeks to see where the media budget votes are on this one.

Items on the development list included:

Experience

• Best of search and browse
• Intent-based refinements
• 1 click simplicity
• Immersive verticals

Intelligence

• Opinion Index to expose the wisdom of the crowds
• Predictive Pricing
• Query Suggestions
• Comparison tools
• Traffic aware routing

Multi-Device Access

• Mobile Product Search
• Turn-by-turn Directions
• Gas Prices
• Movies

It's a tall order for anyone.

Snail Mail is the New Hip Mail...Hippopost

I have a real soft spot for the intersection of online and offline media and at MIXX Toronto this week, a cool Canadian start-up, Hippopost, presented a business model that put the on/offline junction to riveting use.

Hippopost is an online social media tool that allows users to upload favourite photos and create postcards that are then sent via snail mail to friends and family. The service addresses the consumer demand for user generated content and then extends it to the offline world while creating multiple brand exposures and interactions along the way. Brendan Kenalty, Vice President, Business Development at Hippopost Inc. illustrated the addictive novelty of offline media in the form of personalized postcards as a retro, hip form of communication powered through the online channel.

One of the original plays here is in the user selection of the creative that will be displayed on the card. This creates a form of opt-in that insures the ad will be sent to a somewhat targeted consumer. The potential for international brands to participate in this arena are great as they are able to get into a "likely to share" situation within the social media landscape. If my friend is somewhat athletic, I'll be sure to pick Puma or any other suitable advertising that fits her style and taste.

The service has been adapted to a Facebook mini-application and has since attracted 3,000+ installs. When Facebookers interact with the application to send a postcard to a friend, the newsfeed includes an alert about the interaction along with a miniature logo of the postcard sponsor.

Here's how Hippopost works:

1. User uploads a favourite picture
2. Creates a postcard and writes a message
3. Selects from a list of advertisers
4. Previews the postcard with the ad selected added to the back of the card
5. Submit and Hippopost sends the postcard in the mail




Brendan presented an interesting ad impact matrix to the audience. The grid showed the number of touch points and interaction opportunities with the ads and this wrapped the warm and fuzzy Hippopost brand in a seriously sobering effective light.

Here are some fast facts that were shared at the panel:

• The Company launched in May 2008 and has not spent any marketing dollars - all activity has been derived through word of mouth
• 10,000 Hippopost users in North America
• 3,000 Facebook installs (900 active / month)
• Sending 20,000 postcards / month

Among Other Advertisers:

• Yahoo!
• Greenies Pet Foods
• Koodo Mobile

Things to look out for include the novelty nature of the play. It will be interesting to see how the company continues to re-invent its offering to keep the users engaged. The idea has got a lot of potential and I'm sure it's making Canada Post for one, as happy as a ...clam?

Will Video Save the Radio Star?

Here are some more of the video panel highlights from the IAB Mixx Conference yesterday in Toronto:

Measurement of Video - Available but Under-analyzed

Chris Johnston, Director of Advertising Product Management for Brightcove talked about the demand for publishers to build out their own branded players and the various techniques that are being adopted today. As videos are distributed through multiple channels, the branding of the players has come into vogue.

Brightcove is a Cambridge, MA based company that empowers content owners to reach their audiences directly through the Internet. The company also helps publishers enrich their sites with syndicated video programming.

In terms of media opportunities, the idea of wrapping the players or branding them is also a popular media tool:

Chris talked about the opportunity for the long tail and had some great insight on the measurement of video today citing that the metrics are available but that publishers have a long way to go when it comes to analysis and optimization.

Yahoo!'s 3 Act Approach to Video Ads

Chris Jaffe, Director of Advertising User Experience at Yahoo! Showed a demo of the “3 Act” play now available to advertisers. The videos are treated with a 3 second bumper encouraging user action. Act 2 has a persistent interactive banner across the top of the video (small and non-obtrusive) encouraging roll-over activity. Lastly, there’s a rich media microsite attached to the “play” to further encourage interaction with viewers. Chris said that users tend to spend on average, 25% more time on these video ads than the traditional pre-roll ads and see up to 10 times higher click through rates. Chris also alluded to an Overlay technology that was in the works…stay tuned (or read my post on Overlay TV).


Localization of Radio & Video

Neil Sweeney, SVP of StreamTheWorld North America made a compelling presentation showing how radio has been making a revival online. I was impressed by the local application Neil was describing. After hearing so much about local directories using video to enhance their offering, it was refreshing to see a different application of audio/video localization that makes sense in a non-distruptive user behavior sort of way.

I was able to spend some time with Neil to discuss the local opportunity in detail and was truly impressed with the turn around some of the local stations are making in the face of serious budget declines experienced throughout the traditional radio medium. Perhaps the most exciting development to come was the one of streaming audio/video to iPhones based on GPS location. This dream goes back to the Google acquistion of dMarc and the strategy that Eric Schmidt alluded to a couple of years ago of localizing radio ads via GPS and connecting the AdWords (or in this case, AdTunes, AdRadio or Ads period) technology to the experience. The technology is available but the content and advertising has some development to do before it matures as a viable mainstream media option. I had been waiting for this during my CMR days and I'm happy to see it's finally arriving to the scene as another viable media option to offer local advertisers.

Neil talked about CBS’s strategy and how successful it has been in transforming ordinary local radio stations into radio portals that provide rich streaming experiences as well as the ability for listeners to view interviews as they are happening in the radio booths. CBS is one of the largest radio clients handled through StreamTheWorld but the Montreal based company works with a number of local radio stations to provide streaming services that push the envelope on signal pick up, transmission and information sourcing.

StreamTheWorld, as part of its service, attaches information like “song currently being played” to their transmissions. When I heard this I started to imagine the possibility of performing real time audio searches and tuning in to songs as they are being played or interviews or any other live content as it happens.

Based on my discussion with Neil, it looked like video might just come back to save the battered radio star.

Mixx Generated Content...IAB MIXX Conference Toronto

The IAB kicked off its MIXX Conference Series today in Toronto with a strong line up of speakers and several hot topics. Over 700 marketing professionals participated in the full-day sessions that covered everything from online video trends to advancements in social media and a cool iPhone case study from Europe.

I’ll be posting some of the highlights in greater detail over the next few days but here’s an overview of today’s content:

Natalie Johnson, the Manager of Social Media at General Motors and Monik Sanghvi, Senior Vice President of Digitas (US) delivered an in-depth presentation of how General Motors has embraced the Social Media channel. One of the great messages of the presentation was the groundbreaking moves the massive organization has taken to simply “listen” and “let go”. While many Fortune 500 companies struggle to control social media content, GM has clearly seen the wisdom in free flowing UGC and its powerful uses for research, branding and innovation.

The Video Five Ways panel stimulated a lot of conversation as representatives from StreamTheWorld, Yahoo!, Brightcove and 750 Industries shared interesting perspectives on the direction of video. Dan Ackerman Greenberg, Founder of 750 Industries insisted that viral metrics were a red herring and that the industry should focus more on “shareable content”. While the argument became somewhat obscured in equations, the golden nugget emerged with the underscoring of the quality of engagement vs. the mass spray of a viral campaign. The idea of creating relevant shareable content vs. hoping that a clever spot would please the masses was subtle but astute. More on this panel tomorrow...

Jacques Hervé Roubert, President and CEO of Nurun gave a presentation on the impact of the iPhone and shared a couple of great European cases studies. I’ll be delving into these over the next few days. The message was clearly that the iPhone is a wonderful marketing tool that goes beyond simple branding and acquisition campaigns. He showed how the iPhone could technically personify a brand and provide true tangible value to the end consumer. The presentation was fascinating.

A mini panel on the “Future of Search” packed a lot of punch for Microsoft as Martin Stoddart, Senior Product Manager of Microsoft Live search declared that the innovation and development of search technology and its business model was not over. Martin talked about Microsoft’s play to reward searchers through cash or rebates on searched product purchases. I have a lot of thoughts about this concept – too many to write in this overview. Again… stay tuned.

Dr. Marc Donner, Engineering Director at Google gave the standard Google mission statement presentation and talked about semantic search and the developments being made in that area. He talked about search being in its infancy and that we are just starting to get to the fun stuff. My head started spinning with the tag-mania he was suggesting (tagging fragments of a larger whole that would normally be unidentifiable and giving them a sub-identity). Stimulating as usual…

Innovation Upstarts Made in Canada! was an animated panel that covered Praized Media, Kneebone, Refresh and Hippopost – all of these are start-ups I will cover in greater depth shortly. I love Hippospost (I have a fetish for the connection of offline/online media these days) so I will cover more of this tomorrow.

David Friedman, President of Avenue A/Razorfish, Central Region gave a wonderful keynote about the client of the future and how agencies must adapt to the shifting demands for integration. David’s view is that marketing disciplines (DM, brand, online etc.) desperately need to come out of their silos. The picture on my blog was courtesy of David’s presentation. It was the slide he used to illustrate the delusional world agencies are living in when they believe that they are “world class, fully integrated, customer centric” – brilliant.

It was a busy day with a lot of content and a lot of interesting ideas discussed.