*supercollider

Integrating the physical world with digital technology (and vice-versa) is one of the most interesting and opportunity rich territories of our age, and where a lot of the most important work in our industry will be done over the coming years.

I’ve been looking forward to exploring this space with a series of posts for a while, and decided to start with digital in the retail environment.

However, while I’ve taken my sweet time writing this post PSFK came out and released this fantastic presentation on the future of retail.

That’s kind of what I was looking to do here, except way more comprehensive and beautifully produced. Definitely check it out.

I think this post takes a slightly different angle and includes a variety of examples you might not have seen, so hopefully you’ll still get something out of it.

I’ve approached this by looking at how brands are integrating digital to enhance and augment the retail experience throughout the customer journey, broken into seven steps:

1. Drawing the customer in: engaging shop windows
2. Ambient in-store interaction, engagement, entertainment
3. Providing a richer product experience through RFID, shotcodes and augmented reality
4. Digitally supported sales consultation and advice
5. The evolution of the fitting room: augmented reality browsing and customization
6. Facilitating social shopping: getting a second opinion in real-time
7. Before you leave: digitally-enabled value adds

1. Engaging shop windows

The digital retail experience starts before customers have even entered the store. Here’s a range of examples illustrating how shop windows are increasingly reactive, interactive, and even commerce enabled.

Levi’s interactive windows

Although digital windows are becoming more and more commonplace and most examples are from recent years, I thought it was worth starting with some history. Levi’s was a pioneer in the interactive at retail space, working with experience legends Antirom to create a variety of multimedia kiosks for their flagship stores stretching back to 1995.

In this example from 1998, passers-by could interact with sensors on the glass to control the content displayed on plasma screens inside the windows of the flagship Regent Street store in London, 24 hours a day.

Esprit Mirror Mirror

Esprit borrowed from Disney mythology to create their “Mirror Mirror” installation, where a fairy godmother calls out to passerbys to brush away some snow from a mirror. The magic mirror then takes a photo of the shopper which is superimposed onto a virtual mannequin.

From there the product experience begins, with the now hooked-in shopper able to apply various outfits to their virtual self, including professionally designed haircuts and 50 items from Esprit’s current range.

The styling process results in a “model card” which is projected in-store, allowing the shopper to find and purchase the items they’ve selected. The model card could also be accessed from a mobile site using a custom QR code displayed in the shop window, and from there shared on to the Esprit Facebook page.

Tommy Hilfiger Collage

At their Trinity Street store in Dublin, Tommy Hilfiger offered window shoppers the opportunity to capture and stylize an image to submit to a collage being streamed in-store, as well as projected onto a series of high-profile buildings in Dublin.

In a nice commercial twist, at the end of the campaign, participants could return to the store to pick up a T-shirt printed with their custom design.

Top Chef Text to Win

At the NBC Experience Store in Rockefeller Centre, a promotion for Top Chef offered passerbys the chance to win up to $5,000. Simply send a text from your phone to the shortcode to set the slot machine spinning, with your prize details texted back to your phone.

Elle MacPherson Intimates interactive window

Elle MacPherson went with a simple but eye-catching digital installation, using the movement of people walking by or standing in front of the windows to reveal the video display.

Selfridges augmented reality Tissot demo

Watch brand Tissot built an augmented reality app for their website that allows shoppers to quickly and virtually try on a variety of watches from their homes, without ever setting foot in a shop.

Selfridges and Tissot then partnered to bring the experience to Selfridges’ window display on Oxford Street. Street teams handed out wristbands that activate the experience, and the interactive window display allowed customers to try on the watches, explore watch features and see related videos, before heading in store to try it for real.

Hugo Boss augmented reality window

Fashion brand Hugo Boss also went the augmented reality route for its Black Magic interactive window.

A promotion in London dailies the Stylist and Shortlist drove customers to the Hugo Boss store at Sloane Square, where customers could activate a fashion show in the window with their flyer, and then take it in store to try their luck at a game of virtual blackjack for the chance to win shopping vouchers.

Gimmicky yes, but it fulfilled their goal of garnering attention and driving footfall.

Thomas Cook real-time signage

Although markedly less flashy than the preceding examples, Thomas Cook is using their digital signage in a way that is practical to the brand, and something I expect we’re going to see a lot more of: displaying real-time information.

The travel brand installed in-window digital signage in 80 locations across the UK, allowing Thomas Cook to centrally produce and locally update everything from last minute travel deals through to the latest packages on offer.

2. Ambient in-store interaction, engagement, entertainment

Once you’ve been hooked into the store, digital installations will engage, immerse and entertain you, enticing you to stay and shop.

Intel’s holographic glass display

Intel recently began demoing a proof of concept for something they’re calling “Intel Intelligent Digital Signage”, which may be the most advanced in-store display platform of it’s kind.

It’s a 7-foot-6-inch LCD display with holographic glass that features a plethora of interactive options, allowing shoppers to browse merchandise, read customer reviews, submit their own feedback on products, discover promotions, and share finds with their friends via social and mobile integration.

As if that wasn’t enough, an integrated camera is able to determine gender and age of the viewers, and based on time-of-day and other criteria can dynamically display targeted content. It even stores the interaction with that content along with anonymized demographic data and sends that back to the advertisers.

S. Oliver

The fashion company s. Oliver has installed screens in their waiting room areas that recognise the sex of the viewers and display films accordingly.

Orange interactive video wall

Mobile brand Orange’s flagship store in Milton Keynes features a massive 4 x 2.5 metre videowall with a number of interactive features.

First was a Mexican wave concept, where store visitors were invited to have a video of them doing the wave on a mobile phone, which would then be uploaded and posted onto the wall along with other wave contributors. When visitors walked by the wall LED sensors would trigger the multi-person wave, effectively saying hello and goodbye to people.

When the wave wasn’t being activated, an ambient ‘Picture Clock’ display would feature photos submitted by residents of Milton Keynes via a UGC website, matching up photo submission times with the current time of the day.

Adidas SLVR

Adidas asked UK design agency Spotspot to imagine a launch space for their SLVR brand. The resulting concept speaks to the potential depth of interactive digital installations in future retail spaces, with connected and responsive digital displays embedded throughout the environment.

3. Providing a richer product experience

Once you’re shopping, digital technology including shotcode, RFID tagged product and reader displays, and augmented reality are able to provide a wealth of detail around the product you’re interested in, from related products, to reviews, to promotions.

Procter & Gamble RFID Retail

One of the key opportunities in digital retail lies in the fact that increasingly products are being created with embedded digital information via technologies such as RFID.

From a retail perspective, one example of how that could be powerful comes from P&G, in partnership with German retailer Metro Extra.

P&G tagged products at this store with RFID tags, with Metro installing digital displays on the shelfs that were capable of reading these tags and displaying contextual messaging. So if a customer picked a bottle of shampoo off the shelf, the display would recommend the best conditioner to match.

Displays that were used for advertising only might get ignored fast, but imagine if the display were used to bring to life product benefits, instructional details, or even value-based messaging like that around the brands cause marketing initiatives.

Ralph Lauren QR codes

The RFID displays from P&G and Metro Extra are quite a way off from being commonplace, and are quite intrusive on some levels. Another way to go about enabling a deeper product dive is to simply provide a shotcode along with the product, like Ralph Lauren experimented with at their Union Square store in New York.

A touchscreen window display allows shoppers to browse the collection, and select products for purchase via QR codes, sending those purchases directly to a mobile commerce shopping cart.

Another way of implementing this would be to implement QR codes in the retail tags, allowing shoppers to get more information about any product, or to save it for later consideration or purchase.

Lego kiosk

One of the earliest examples of augmented reality was Lego’s in-store kiosk. The idea is simple — hold up the box to the kiosk, and you can see what the assembled product will look like.

4. Digitally supported sales consultation and advice

The shop assistant can use digital technologies as well to help you evaluate and compare your choices.

Diesel Ginza Interactive Mirror

At Diesel’s store in Ginza, an interactive mirror was designed to enhance the communication between the sales assistant and the shopper. A digital camera can snap photos of up to six outfits, allowing the shopper and salesperson to compare them against each other.

5. The evolution of the fitting room

Once you’ve got some items picked out, augmented reality fitting rooms enable rapid browsing and colour selection.

Adidas augmented reality t-shirt shopping

This sounds complicated but there is an idea in here so bear with me.

In five Asian cities, Adidas ran a print campaign encouraging readers to take a snapshot of an ad with their phone, and then take the snapshot at retail.

Once at retail, customers headed to a digital mirror, and discovered that holding up that image on their phones would trigger an augmented reality t-shirt to display on top of their image in the mirror. The t-shirt was even pre-countoured to fit on a body, allowing you to virtually try it on.

Then to try on the next t-shirt, just give your phone a flick, and the next shirt would appear, allowing you to browse the entire collection.

In terms of results, it’s reported that 75% of the people that used the digital mirror took photos of themselves wearing one of the t-shirts, and 74 people ended up spending over 500 dollars on their shopping visit.

The idea is an evolution of a virtual-shoe fitting mirror released back in 2007 at the Adidas Paris flagship store, which allowed shoppers to virtually try on different footwear.

The t-shirt execution was much harder to pull off given the need to realistically show the clothes draping on a figure.

This particular mechanism may still be a bit clunky, but the idea of augmented reality shopping could definitely have some merit. A store can only stock so much of a range, and people only have patience to try on so many shirts. If you could scan the entire range and see how it looks on you in minutes rather than hours, that could actually be a useful experience.

Back in 2008 researchers at the Fraunhofer Institute for Telecommunications presented a “virtual mirror” that would allow consumers to do just that via a touchscreen interface on the mirror, which may be more practical than the phone. However you can see that the issue of drapery was still obviously not being addressed at this point, which is where Adidas was looking to innovate a bit further.

6. Facilitating social shopping - getting a second opinion in real-time

Once you’ve got your items picked out, share them virtually with your friends or significant others to get their second opinions.

Diesel Cam

Diesel stores in Spain now come equipped with Diesel Cam, which enables shoppers to photograph themselves with clothes they are trying on and immediately post the photo via Facebook Connect to get feedback from friends, or simply show off.

Manor Tweet Mirror

Nedap Retail has developed “Tweet Mirror”, another social media enabled digital mirror recently installed at Swiss retailer Manor.

The mirror allows you to capture pics of various outfits, compare and share with friends via Twitter, e-mail or mobile for a second opinion.

7. Before you leave — digitally enabled value adds

Estee Lauder Social Media Makeover

This is a much more manual approach than the Diesel Cam, but the output is still very much about digital sharing

Looking to connect with a younger audience than their core 35-55 year old demographic, cosmetics brand Estee Lauder looked at the incredible time and effort their target was putting into social networking spaces and asked the question “where can our brand provide value in this space?”

The answer was the Social Media Makeover promotion — in partnership with Bloomingdales, Estee Lauder would offer free makeovers and professionally produced photos. At the end of the hour long session you’d get a hard copy of your photo and the photo emailed to you, ready for instant profile uploads.

Sony Ericsson Photo Envy

Sony Ericsson and mobile network 3 partnered together for a retail experience called Photo Envy Studio at 3’s store in London’s Oxford Circus. Visitors were directed into the store by street teams, where they were invited to “make their friends jealous by having the perfect pictures taken”, superimposing them in photos of sky diving, bungee jumping or snowboarding.

This one feels a bit inauthentic for an audience who actually does do most of these things themselves, especially with the connection with Sony Ericsson’s ill-conceived and short-lived mascot “Eric”, but the idea of creating currency in-store specifically designed for social sharing is an interesting one.

Summary

The integration of digital technologies into the retail space is still nascent, but it’s clear there is potential for enhancing the customer experience throughout all aspects of their store visit.

Here’s a quick recap of some of the common threads in the above for how digital is being used in the retail environment:

• Attracting attention, engaging customers and actively driving them into the store
• Providing intelligent, real-time interactive displays
• Delivering context sensitive promotions and real-time sales and offers
• Enhancing the shopping experience, including easier browsing/fitting, enhancing peer and shop assistant review, easy access to product reviews and details
• Capturing customer demographic and behaviour data
• Providing in-store experiences
• Creating a seamless connection between online and retail profiles, enabling social shopping
• Proliferating interactive touchscreens through the technology getting cheaper and more reliable

Hope this post has been useful, and if you’ve seen other compelling digital retail experiences or can imagine other future applications please leave your thoughts in the comments.

And one last suggestion, definitely check out Helge Tenno’s presentation on New Business Opportunities in Retail:

Helge covers a much broader swathe of ground in his presentation, ranging from product to in-store and business opportunities, and it’s chock full of great examples and thinking.

A few years back, I was working with a technology company who had ran a multi-billion dollar b2b affiliate marketing programme. The deal was simple — integrate their brand into your advertising, and they’ll cover a percentage of your media costs. The greater the integration, the more they’d cover, up to a very significant percentage. The program was hugely popular and successful, and helped make the technology maker ubiquitous as a brand.

At one point I had an idea — what if we extended this programme to consumers?

I was salivating over the marketing and commerce potential of widgets, and the pioneering Amazon Associates program, founded in 1996, already had over 200,000 members.

The idea was never implemented, possibly because of how much effort is involved in setting up affiliate programmes, and how many company silos something like that crosses. However I’ve always thought that there was massive potential in the idea. As marketers we’re saying that consumers are providing brands with “earned media” by getting them to install cool and useful widgets on their spaces, thereby getting our brand in front of their and other people’s eyes without any further media investment. But what if we gave them the option and incentive to also monetize that space, like a real media owner?

If they could place products they’d recommend into their pages, and get a cut every time the product sold, that could be big.

Fast forward three years, and Amazon is now up to 900,000 members in their Associates program, who can make up to 15% on sale referrals through both affiliate links and an easy use widget, customizable to include any range of items from the Amazon catalog.

But still, besides a few innovative music startups basing their business model around the idea of social commerce, I’ve seen little in the way of brand innovation in the space.

Until now. This week, Dominos’ launched a social affiliate programme for pizza sales.

The concept is simple. Install the widget on your blog or social networking space. Any time someone purchases through the widget, you get a 0.5% cut from it. There’s even a dashboard to track your sales.

I’m not sure if 0.5% is enough to get most people to stick a pizza widget on their social spaces. But people definitely use brand names and assets on their social spaces as status indicators. And if they could get a cut from referrals of the latest thing they like, covering anything from brands to bands, I’m sure some would.

I referenced a few other innovative startups in the music space trying out an affiliate model, they are:

mflow

Currently in private beta, mflow allows you to follow people who’s music preferences match your tastes. Every time you buy one of their recommended tracks, they get a 20% cut. And the same deal works for you.

Posse

Based out of Australia, Posse lets fans choose upcoming gigs they like and post links to the concerts anywhere from emails to Facebook. Anytime someone clicks through and buys a ticket (handled via Ticketmaster), they get a portion of the sale straight into their PayPal account.

So what do you think? Is Domino’s still ahead of the curve, or is social commerce and affiliate marketing 2.0 well and truly on its way?

“My iPhone app has had 200,000 downloads — is that good?”

By all accounts the long heralded “Year of Mobile” is finally upon us, and it’s raining apps. IDC is predicting the iPhone will have 300,000 apps by the end of 2010, and Android will rise to 50-75,000.

And we can count on brands to help fuel a lot of the growth and hype. Just in the last few months we’ve seen app releases from Van Cleef & Arpels, Piaget, Gucci, Hilton, Polo Rugby, Jack Daniels, Weber, Audabon, Jaeger-LeCoultre, Discovery, Time Out, Stella Artois and more. The iPhone bandwagon is picking up speed, and all the big brands are hopping on board.

This is not without merit either. Admob survey results have 70% of respondents say that they’ve downloaded a branded app already, and 60% said they’d be interested in doing so.

So for all this activity, how do we know what success looks like?

This post is a first shot at exploring the short and long answers to that question, by addressing the following:

• Context and mitigating factors: Like any other metric, measuring iPhone apps “success” is relative and depends on the context. What kind of app do you have? Who are you targeting? How have you promoted the app?
• Metrics: Just as microsites are not all about pageviews, iPhone apps are not all about downloads. Besides star ratings, sales and re-usage rates are going to become increasingly important metrics for brands.
• Benchmarks: Understanding that context makes benchmarking problematic, it’s still good to have some guidance. I’ve tried to find examples for each type of metric where possible to help give some idea of what to shoot for and what constitutes success for your effort.

To frame all that, let’s look through the eyes of the metrics, starting with the stat most brands are currently referencing when referring to success: downloads.

Downloads

People like a big, simple number, and one most akin to traditional forms of measurement, so it’s no surprise that downloads is what we’ve collectively defaulted to. Here’s the collected downloads to date for all the brand apps I could find who’ve publicly reported figures.

Now here’s the caveat — while you can use these types of numbers as guidance for what success looks like, when comparing with your own app make sure you keep the following in mind:

• Promotion
  Promotion makes a huge difference to the success of an app. You simply can’t compare downloads without factoring in the investment in promotional support and media.

  Nearly all of the most popular apps have received support, often through traditional channels including PR and brand websites, but the key is that this is usually supplemented with a significant mobile media buy through a network such as the Google-owned Admob.

  The effect of these media buys can’t be underestimated, due to the compound effect you receive from pushing an app into the top 50 listing, where over 40% of iPhone users find new apps from. Even just pushing it higher within a section listing has huge implications to your overall total.

  As an example, Sherwin-Williams was able to push their app from number 70 to number 18 in the utility section through advertising, resulting in a 500% increase in downloads.

• Availability
  Not every app is available worldwide. But the benefit of localizing and making the app available in global app stores is huge, as even the smaller countries will contribute downloads to your sum on a daily basis, and taken in aggregate over the course of the year it really adds up.

• Differing objectives
  Is a brand utility used every day worth more than a branded game played once or twice then deleted? You simply can’t compare the two directly, they have fundamentally different objectives.

  Despite that, many times marketers are still reporting downloads as the key success measure about the success of a brand utility instead of frequency of use, increases in brand loyalty or affinity, or other more relevant metrics (more on this later).

  As with any marketing activity, it’s key that metrics are selected and prioritized that are the closest aligned with our objectives.

• Counting updates in downloads figure
  I think most agencies and brands are using third-party reporting software, but if you are using Apple’s own report out of the box it’s not at all clear that Updates and Downloads need to be manually filtered. There’s a binary code in one of the columns that distinguishes between the two, if you don’t sort against that, you’ll count Updates in your Downloads figure, which could inflate your total downloads stat by a factor or 2 or 3, a huge difference.

• Duration
  Stats really accumulate over time for a popular app, and there is some advantage from having launched in the app store when there was 1k apps rather than 100k competing for attention. For example, Bank of America’s mobile banking and ATM finder app lanched in July 2008 as one of the first ever branded apps. By February they were up to 2 million downloads, and then in September they were reporting 3 million.
• Free apps are downloaded 7x more often than paid apps
  Most brand apps thus far have been free, notable exceptions being Kraft’s very successful 99 cent iFood app. According to Pinch Media’s research, the average number of downloads for a paid app is 9,300, compared to about 71,000 for the average free application.

Beyond the need to segment between brand utility and entertainment apps such as games, possibly the most important overarching point to make about downloads is that the long-tail is all important.

Stats vary, but it’s clear that like most media landscapes, there is a small number of blockbusters and a much larger set of apps who are ignored entirely. Appsfire has a nice graph that makes the point:

According to their data, only 20,000 of the 100,000 apps in the app store are being used at all, and 80% barely have any active users.

It’s very much a situation of “the rich get richer” in the App Store, as 60% of iPhone users find new apps by browsing the lists of Most Popular apps. So if your initial promotional blast gets you into the top 25 downloaded apps, you are much more likely to build massive compound downloads from that point on. If you never make it in that list, you will never see anywhere near comparable success.

In other data, Pinch Media reports that “the top 10% of paid applications average nearly 75,000 downloads. The second 10% of applications fell to a mere 9,232, slightly less than the overall average cited above. The third 10% fell by more than half that, to 3,849. A full 50% of all paid applications have an average download of less than 1,000.”

The average number of downloads for an app is a mere 25,000. Still, this is better than Facebook apps by a fair margin, where there are a few superstar apps with millions of users, but the majority of Facebook apps have less than 100 users.

Star rating

Star ratings are public, which means we have a much richer data set than downloads to play with here. And Johnny Makkar from Attention Digital has put together a comprehensive compilation of over 200 star ratings from branded iPhones application as a Google spreadsheet.

In Johnny’s summary of the star ratings, he notes that out of the 200 apps listed, only 15 have a rating of 4 stars or better.

That’s a pretty dismal stat. However if it’s any consolation, Neil Perkin and Seth Godin have talked recently about the problem with using starring systems as a reliable form of measurement, a lot of which comes down to the motivations people have for applying a star ranking in the first place, and the resulting polarization of results. Anecdotally I have a feeling that brands seem to be especially punished by this phenomenon, possibly because the expectations may be higher, or maybe people just don’t like the brands and see it as an opportunity to vent.

Re-usage + interaction rate

“Although novelty apps have had the most downloads, research shows, use of them fades quickly. “You play with it a few times, show it off in a bar, then you don’t use it much,” said Raven Zachary, president of Small Society, an app maker in Portland, Ore.”

This is the biggest problem with using downloads as the key stat. It’s up-weighted in favour of novelty apps, and gives no consideration to the biggest white elephant in the iPhone room: most apps that are downloaded are rarely used again.

“We think 100 engaged consumers are much more important than 1,000 downloads,” Ed Kaczmarek, director of innovation for Kraft Foods.

The North Face Snow Report app has been downloaded 300,000 times to date, but the more important stat may be that they report people are using it multiple times a day. Building a brand utility that becomes that valued by a customer has value outweighed the sheer impressions generated alone.

Achieving this type of usage is no mean feat though. AdMob usage stats from their universe of 2,239 apps indicates very few apps have a large active user base:

Pinch Media stats indicated that only 20% of people returned to a free app after the first day of download. Worse, by day 30 only 5% of people are still using the app.

My prediction is that re-usage becomes a benchmark at least equal in importance to downloads, especially in the case of brand utilities. This is stat is somewhat analogous to the “time spent” metric that has been more common in microsite reporting in recent years, but unlike that metric which can be skewed by people who have left their browser open or are simply lost in your site looking for something, whether someone comes back to your app time and time again is a pretty good indicator as to whether they actually like it and are having a good brand experience.

Though again, if you are developing a novelty app that’s promoting say a movie launch, maybe you don’t care about this metric very much at all, and would be happier with more downloads and less frequent usage than the reverse. It’s definitely case dependent.

Sales from the app

Mobile commerce is still far from commonplace, but remember that eCommerce was in that position a decade ago and is now a juggernaut.

eBay has reported that it’s app has resulted in $400 million of sales through the eBay marketplace. The question is whether these purchases would’ve happened anyway, and it would be interesting to see whether the app has resulted in an incremental uplift in eBay sales. Regardless, it’s clear eBay has opened up an important new channel for their customers.

The other reference of note is back in August Pizza Hut reported $1m in sales from 100,000 downloads of their iPhone app in just the first two weeks of release.

Sales of the app

Kraft was one of the first brands to test the idea of not just providing a brand utility as added value to the consumer, but to actually charge for it as well. Their $0.99 iFood Assistant app featuring recipes and tips and has spent most of the year in the top 100 apps chart, with Brandweek sources estimating the number of downloads to be in the seven-figure range. Weber’s seen the opportunity and is now upping the ante with their $4.99 On the Grill recipe app.

With the introduction of micropayments from within iPhone apps in 2010, in-application purchases of content is also a trend to look out for. In one recent example, in two weeks the vitaminwater Sound Lab application converted more than 64,000 downloads of 50 Cent’s latest single “Baby By Me.”

Other metrics

Although Downloads, Star Ratings, Frequency of Use, and Sales are the most common ways of measuring success of a branded app, there are other benefits to brands that can be achieved and measured.

A few examples:

• Audi claims their A4 Driving Challenge game has resulted in about half a million referrals to the A4’s iPhone Web site.
• Kraft says that 90% of people who use the app also go on to register at kraftfoods.com. The app is also helping Kraft reach men. “A strong percentage of iFood Assistant users are men,” Kraft spokesman Basel Maglaris says. “We’re appealing to a broader base of consumers than our traditional audience (of) women.”
• Lion Gate’s Stun-O-Matic app to promote its new action movie “Crank: High Voltage,” generated 800,000 trailer views from 2 million downloads of the iPhone app.
• REI has looked at their Snow Report app’s detailed usage and notes that “Over time this has translated into 750,000 minutes spent using the application and with the REI brand top of mind”
• The 9.8 million downloads of Barclaycard’s Waterslide game app have reportedly translated into 650,000 hours of brand engagement
• Of the nearly 300,000 who downloaded the vitaminwater appliation in the first two weeks, users uploaded 1 million remixes to the companion site at 50soundlab.com, a very high engagement figure.

What about sponsorship?

A new model is emerging in the iPhone landscape, which is the sponsorship of applications as an alternative to launching brand-owned apps.

Some examples of this have been Sprite and Zoozbeat, Smirnoff’s 6 month sponsorship of Time Out, and Swatch Distill.

Is a download of a sponsored app worth the same as a download of a brand-owned app? I’d argue it’s not. Just like Red Bull with their brand-owned events, it’s a different level of value for a brand to own something rather than to sponsor it. But how do we define the difference?

Last thoughts

A few points of summation to leave you with:

• Pick metrics that are aligned with your objectives
  Are you looking for awareness and campaign support? Downloads is probably your #1 objective. Are you looking to deepen your relationship with your customers and increase brand affinity? Re-usage of the app might be the best choice. Commerce? Sales.

  Other things to consider over and above sheer downloads…do your users like your app? Do they keep coming back to it? Is it shifting perceptions of your brand in a positive way? Is it driving sales? Figure out what’s important to you and measure that, don’t get too blinded by downloads alone.

• Downloads are important, and you need promotional support to get them
  Reach is still important, so approach it like anything else — don’t release and pray, promote it. Even viral films get their initial seeding boost, and iPhone apps are no different. Nearly every successful app has a solid promotional strategy behind it.
• Don’t take your ratings too personally
  Out of 200 brand apps, only 15 were rated four stars or more. Focus more on the actual qualitative feedback, look for ways to continually improve the value and UX of your app, and ultimately look at re-usage stats. If people keep coming back, there’s a good chance they like it.

• Downloads without re-usage is a missed opportunity
  95% of apps aren’t being used after 30 days. Getting an iPhone app on a customer’s phone is a major opt-in invitation to what could be a long-term relationship channel. Unless you are deliberately looking to only support a one-off campaign, think about your apps as comms and engagement platforms, which should evolve and develop over time, continuing to add value. Get that strategy right, and you can in the 5% of apps that stay active after thirty days, and you’ll have a rich portal into your customers lives for months or years to come.

That’s it for now, if you have any more benchmarks or stats to add to the collection, or any thoughts on how to best approach setting and achieving your metrics, I’d love to hear from you in the comments!

In my last post “Ninety Red Bull Events | Part 1: The List” I catalogued ninety individual Red Bull brand-owned events, attempting to use the list to demonstrate a few points about the scale, longevity, and depth that Red Bull’s strategy and success in integrating into youth and action sports culture is based around.

In this post I’m going to distill some of the lessons from diving deeper into that list, with the aim of provides something of a case study in how to build a dominant youth brand based on an authentic influencer strategy, focusing on investing in value creation over the long-term and earning media from that investment.

Creating vs sponsoring

After sponsoring a handful of existing events early in the brand’s history, Red Bull made a strategic decision to create their own events and have followed this direction consistently ever since.

This is a hugely important differentiator for them, and sets them a league apart from sponsor brands
:

1. Early investment becomes equity
   As a sponsor brand, the more important and popular the event becomes, the more it costs. However Red Bull’s initial investment in creating the event quickly starts paying compound interest, and as the event grows in stature they reap all of the rewards while costing them only the maintenance of re-running the event.

2. Sole-branding
   Most big events have their platinum, gold and silver sponsors. How much are brands really getting out of these sponsorships? And if you want to distinguish your brand by putting your name on the event, be prepared to shell out mega bucks. Red Bull on the other hand is the title sponsor for every one of these ninety events, and their branding is ubiquitous and seamlessly integrated into the event rather than tacked on and diluted amongst a hundred other sponsors. There is no question who is putting on the event and responsible for bringing it to everyone and making it happen.

3. Authenticity and credibility
   For me there is a big difference with a brand simply paying to have their logo attached to something, and with a brand who puts their energy, resources, and creativity to work in bringing something to life themselves, even if it is of course delivered behind the scenes by a host of event and activation agencies. There’s a different level of commitment involved, and a different type of authenticity and credibility is conferred to the brand as a result. Successful creation signals commitment to and deep understanding of the space, whereas anyone can pay to logo-ize something. I’m not saying sponsorship is always a bad thing by any stretch, but I’d argue it definitely lacks the same resonance with the audience.

4. Underground up
   There is something powerful about how so many of these Red Bull events started out small and local, and have grown to be big and hugely important and influential amongst the athletes and their fans. Athletes themselves say voluntarily that many of these events are as important or second only to the X-Games in stature and importance to their career. This is huge for authenticity with their target. Red Bull has grown up with it’s audience, and them with it.

5. Control
   Last point on creation vs sponsorship is about control. Namely, when you own the event, you do what you want with it. You control the promotion, the PR, the messaging, the branding, when it happens, where it happens, who’s involved. Everything. Even as a long-term sponsor of an event, you are ultimately at the mercy of the event’s owners and along for the ride.

Longevity

Many brands flit from campaign to campaign, with their event activation a tacked on component that is rarely addressed consistently. Getting commitment to ongoing events from a brand can be near impossible.

Red Bull is fundamentally different in this regard. They create experiences that generate value for the brand and then they build equity in them consistently over time, just as most brands would do with important product innovations and sub-brands.

This is hugely cost effective compared to reinventing the wheel every year, and it ensures the brand becomes fundamentally woven into the lives of the athletes and influential consumers they wish to reach, as Red Bull is guaranteed to be part of their year, every year. Plus the audience often scales in size annually. Flugtag and Red Bull Soap Box race are now yearly highlights for many consumers, reaching in-person audiences of hundreds of thousand of people in many cities. In Brazil over one million people turned up for the Red Bull Air Race.

From the list below you can see sponsorship of some events such as Flugtag reaching back all the way to 1991, but the vast majority of the events they’ve created over the years are still ongoing, year after year.

Depth and breadth

Another key differentiator with Red Bull is the incredible effort they have gone to in order to “own” action sports and become embedded in youth culture across the board. They have quite literally gone after every action sport you can think of, and in a number of cases essentially created their own sports. They’ve since started attacking music and art with the same vigour.

Where most brands are happy to tack on their logo to a handful of events in a year and call it a sponsorship strategy, Red Bull is literally ubiquitous. In many cases they are absolutely essential to the vitality of the sports they sponsor.

Use creativity to reinforce the brand and create cut-through

Looking down the list, another thing becomes immediately clear — all of the events sound awesome.

“Last Man Standing”. “Down and Dirty”. “Exodus”. “Chopper Assault”. “City Rage”. “Heavy Metal”.

Red Bull have used crazy sounding and subversive names to build excitement around events before you’ve even heard of them to and to indelibly stamp them as “Red Bull”.

Additionally, Red Bull seek out and create a sense of drama and the spectacular with each event to rival anything Evel Knieval could’ve ever imagined.

Downhill bike racing through Rio’s most notorious barrios? Wakeboarding in the dark in a flooded mine? Motocross duelling in bullrings? Roller derby on ice skates? Red Bull has made it their mission to bring barely imaginable experiences into existence, and give them all the spectacle and pomp of a “real” sport. And then to do it again, year after year.

Create shareable content and earn your media

How can Red Bull possibly afford all this? Well, they do the opposite thing most brands do. Most brands spend a tiny bit on content, and then 10x as much on media to try and spread that content as far as possible, because people aren’t really that interested in what they are saying so they have to get it in front of eyeballs by force. Which of course then diminishes the value of reaching those people, given they would rather you weren’t.

Red Bull was doing earned media before it was a buzzword. They invest in unique, compelling experiences, and in the creation of content from those experiences. They get a significant amount of very deep and powerful brand interaction at the actual experiences themselves, both from participants and spectators. And then through a combination of PR, word of mouth, and pull media channels they get an absolute ton of exposure of their content. And through platforms like their popular Facebook page, content-rich website, Red Bulletin, and a legion of popular microsites and brand communities like FMXWorld, Red Bull can legitimately claim to be a media brand in its own right at a time when most brands are still talking about the idea.

The reason Red Bull is so exciting as a brand and a case study to so many is they’ve flipped the traditional advertising model on it’s head. They invest most of their budget in experiences, content and media assets, and allocate comparably little to actual media itself. They trust if they build cool things, people will seek it out and talk about it, and they are right.

From a Brandweek article from 2001:

In the antithesis of any major’s marketing plan, Red Bull buys traditional advertising last. Only when a market is deemed mature does the company begin a media push. The idea is to reinforce, not introduce, the brand. “Media is not a tool that we use to establish the market,” said vp-marketing David Rohdy. “It is a critical part. It’s just later in the development.”

The brand spent $100 million in the U.S. last year, according to the company Measured media spending was only $18.9 million last year, up from $9 million in 1999, per Competitive Media Reporting.

In a way their model is to first build targeted, ubiquitous relevance rather than broad mass awareness. They don’t blast out, they focus deep and then bubble up. And the latter approach gives them a much stronger and longer-lasting foundation for their activity, and costs them less. Paid media fits into the mix later to solidify the position, but it’s an enhancer rather than the foundation.

Mix global platforms and local activation

Red Bull is looking for the ultimate blend of local relevance and cost-effective impact. So they have a chaotic but effective mix of global platforms such as Flugtag and Air Race and tens of locally focused events. Many events start out locally and then get rolled out across regions as the template is perfected.

Living and creating with your audiences

I think I got this insight out of one of the many great Mobile Youth presentations on Red Bull. Basically the point is everything Red Bull do is about creating and living with their audience, rather than messaging at them.

What else?

I think you can probably tell from this post and the preceding list that I’m a massive fan of Red Bull’s strategy. It’s unique, it’s effective, and it has a lot to say about where the next generation of marketing is heading. Would love to hear what other lessons you’ve taken from Red Bull’s approach, and what other brands you think are doing this right.

Great additional references:

• Sports Illustrated: The New Extreme
• NY Times: Red Bull’s Headlong Dash is a Crash Course in Marketing
• Rob Walker: The Murketing of Red Bull
• Under 30 CEO: 9 Kick Ass Red Bull Events
• Brandweek: A Bull’s Market: The Marketing of Red Bull’s Energy Drink
• Mobile Youth - Red Bull: 5 Lessons in Youth Marketing
• Forbes: The Soda With Buzz
• Fast Company: It’s a (Red) Bull Market After All
  

My goal on this blog is to provide original insight and analysis. I don’t want to just post links, that’s what my Twitter feed is for.

That said, as a voracious consumer of RSS feeds (it’s that little sub-dermal chip connected directly to my brain stem that does it) I’ve been wondering if it might be useful to curate the most interesting things I find on a semi-regular basis, so more people get to hear about them.

So here’s the first edition for your consideration. Definitely let me know if it’s useful or not, and if so I’ll keep at it in addition to my usual but less frequent long-form posts.

Smart.fm: Experience design process by Adaptive Path

Adaptive Path is one of those impressive companies that absolutely lives on the edge of what they do, which is in this case is Experience Design.

Whenever a company like that, whether it’s Apple, or Pixar, or IDEO or whomever, opens up about their processes and gives you a look at how they do what they do best, it’s definitely worth a look.

This is especially true as marketing moves away from simply messaging and towards experiences and engagements, you’d be hard pressed to find a better company to crib notes from.

Smart.fm experience design at Adaptive Path

GM ‘The Lab’ blog + Universal Music Tumblr

Two of the key themes of the Business 2.0 era are transparency and connection. It’s fascinating seeing how companies are experimenting with technologies like blogs, micro-blogs and Facebook to bring people closer to their business in new and inventive ways, and how they are becoming more open and transparent in the process.

Two new examples on my radar this week are GM’s “The Lab” and Universal Music’s Tumblr.

As PSFK notes, GM’s The Lab blog is fascinating because it opens up the transportation design process, something that has traditionally been kept tightly under wraps. The reaction from auto fans says it all — this post on the Bare Necessity Car has 260 comments!

Separately, the Universal Music Tumblr is interesting to me because Tumblr is so the complete opposite of what brand communication used to be about. Tumblr is chaotic, continual, jumbled, informal. For brands to use this technology with any credibility, they’ll have to conform to the nature of the medium. And that’s a big and important mindset shift for marketers and companies geared towards infrequent, big bang campaigns.

Pepsi’s new record label, QMusic

Another one of the prevailing themes I’m interested in is the intersection of brands and culture. With the move in marketing towards creating value, culture is one of the biggest arenas that brands are going to ramp up in, far beyond the association and co-option that has been the standard to date.

Pepsi’s announcement that they are moving beyond just sponsoring acts to grooming their own via a new label in China called QMusic is significant. As Contagious mentions, this is part of a bigger trend. TAG Records, Bacardi being the label for Groove Armada, and most recently, the finally launched Red Bull Records shows that brands are becoming less content to sit on the sidelines and sponsor and more keen to follow Red Bull’s lead in areas like action sports and become an integral part of the culture, investing in creating cultural value directly.

Socializing Banners

Adweek reports that CBS is experimenting with social features embedded directly in banners.

Most people do not click on banners. In fact, most people’s brains are trained so their eyes ignore them automatically. Is adding some social features to a banner going to change that? No. At least not right away.

But there are two redeeming thoughts here.

The first is that that for a while, socialization was something that happened in a social network. Now through Facebook Connect, Google Connect, Twitter and other technologies, social can and should be everywhere you are. It seems obvious already, but still most marketing is not taking full advantage of this opportunity. Which is a shame, especially since Facebook Connect’s results are staggering.

Second, the idea that catching attention and building passive awareness is no longer good enough for advertising. The idea that banners, OOH, and all other advertising as we know it is going to continue to shift towards providing people with something of value, and provoking an action.

The question now is what are you going to get people to do. That action could be contributing a vote or a few words, it could be a share, it could be downloading an app, getting a coupon, getting a name down for an event.

But of course, it’s not that easy. The big question is why would they want to in the first place? And that’s why marketers increasingly need to start from the question “what are we providing of value?”. Which reminds me of this Fanta campaign from Germany, where texting to a Fanta shortcode underneath a bottle cap rewards the customer with 3 minutes worth of talk time.

Penguin Spinebreakers partners with Island Records

Penguin has got to be one of the most interesting brands on the web right now. There was the amillionpenguins wiki-based collaborative novel project. The We Tell Stories digital fiction project. A first step into building services, the We Make Stories suite of web-based story creation tools for children. The Penguin Dating collab with Match.com. They are pushing boundaries left and right.

And now NMA reports on a colab with Island Records, where they are bringing Island artists into their teen social network Spinebreakers by having them review books, and then giving Spinebreakers users Island records to review.

The co-promotion is nice, but really I’m just interested to stumble upon Spinebreakers, as it’s great to see this minimally-branded niche social network thriving away, another example of Penguin looking at declining readership and deciding to see technology as part of the solution and part of their future.

GAP Stylemixer: mobile integrated discounts and CRM 2.0

And finally, my fellow AKQA peeps over the pond in the U.S. have developed a social media campaign for the Gap, and one of the showpieces is an iPhone app called Stylemixer. The primary function of the app is as a “social shopping tool”, allowing you to create, share, and get feedback on outfits.

However as Contagious rightly pointed out, one of the most interesting features is that when opened near a Gap store, the app can automatically unlock discounts for the store. As companies begin to be able to engage with their customers via real-time channels like apps, feeds and widgets, the possibilities in CRM 2.0 explode. Creative innovations like this one are the start of something really big.

First edition fin

Well, that’s it for the first edition, hope that was useful. Any other unique stories from the week you think I’ve missed, please let me know in the comments.