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“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.

In my last post we looked at trending showing the destination web is in decline, and we are well and truly entering the era of the social web. Simply stated, over the last three years fewer people are going to destination websites, and more people are spending more time on social networks.

Now we’re going to look at three strategies brands are employing to ride the trend, in order of escalating ‘commitment’ to social spaces vis-à-vis destination sites:

1. Syndicating
2. Integrating
3. Replacing

Before we get started, a couple of notes:

• These strategies are not mutually exclusive. To the contrary, at least in the near term they are best employed in combination. Syndication could also be considered a light-weight version of ‘replacing’.
• This post is not about what you can do on social networks, e.g. discussing crowdsourcing vs social currency vs customer co-design. What we’re looking at here is simply the shifting balance of where a brand’s web presence ‘lives’.

Strategy #1: Syndicating destination site content to the social web

The most popular approach to date for dealing with the rise of the social web has been content syndication. Every brand manager or agency exec has heard at one time the immortal phrase “we need to put our commercial on YouTube”, but obviously there can be a lot more to it than that.

The basic premise is if you are creating valuable content and services, you will be doing a service to your potential audience (as well as your brand) by making it as easy for your audience to get to it as possible.

One example of a brand doing it well is Kraft. If you are interested in getting recipes from their site, they make it as easy as absolutely possible to get them wherever and however you want:

You have your pick of channels, from email, RSS, mobile sites, widgets, and iPhone apps. They’ve made a clear decision that with the wealth of recipe sites out there, and to compete they need not to “hoard” the content on the site but rather make it available as freely as possible.

Maybe this concept seems obvious already, but remember it’s replacing the powerful “sticky site” strategy that has dominated for years.

Strategy #2: Integrating social features into destination sites

The next option for brands in riding the social wave is to integrate social features directly into destination sites.

This is also not a new concept, brands have been trying to create their own community spaces for years with varying degrees of success. However powerful new tools like Facebook Connect are allowing brands to tap into the power and scale of existing social networks.

For example, Ben and Jerry’s has made their product section a collaboration with their customers, allowing ratings, comments and declaring yourself a “Fan” of flavours via Facebook Connect.

If you become a fan of a flavour you can post your comment directly to your Facebook wall as well. This becomes promotion for the brand directly in the user’s stream, driving more traffic back to the brand site via the social web. In effect you are mitigating the drop in destination web traffic with the help of the very thing causing the slide.

=

Indeed, according to the Wall Street Journal, Facebook says that “sites that use Facebook Connect have seen increases of 30% to 200% in site registrations and 15% to 100% in the number of reviews and other user-generated content.”

Strategy #3: Replacing destination sites with presence on social platforms

Social syndication and integration should by now be requirements for most brand sites, obviously using platforms and channels that best fit the goals of the brand and behaviours and preferences of its audience.

However some brands are presumably looking at graphs of their declining site traffic, and the boom in social sites, and asking the question “do we even need a website at all?”

This leads us to the latest way some brands are dealing with the shift to the social web: ‘Replacement’.

This approach definitely is not for the faint of heart. It’s also probably not advisable for many brands at this point. There are still a good many reasons to have brand sites, and most of them still get millions of visitors.

However the question about what should live on brand sites and what should live on social platforms is definitely a valid one, and here’s a few examples along the spectrum.

Skittles

Yes, we are starting at the deep-end. Skittles turning its homepage into a Twitter redirect is still our high-water benchmark for turning brand presence over to social media spaces, and won’t be surpassed soon because of the predictably ill-fated initial results.

It’s been called everything from visionary to a stunt and a gimmick, and maybe ultimately it is all of those things. Although the initial Twitter default was quickly pulled down, it’s worth noting that months later Skittles.com is still primarily a social redirect. Except now the default destination is Facebook.

Axe (Lynx)

As another example of the social bookmark strategy, check out Unilever men’s deodorant brand Axe’s new site:

It isn’t a site as much as a collection of redirects.

Links to Axe on Facebook and Youtube to get opt-in brand entertainment. A Wikipedia page for more information. A link to buy the products on Drugstore.com. And that’s about it. Again, probably not the right approach for most brands, but for our purposes it’s an interesting object study in brand site minimalism, taking full advantage of the social web.

Pepsi

For a less dramatic example that is likely to be more indicative of near-term shifts, check out the new Pepsi.com:

Links to Pepsi’s Facebook and YouTube spaces take up two of four most prominent spaces on the page, and there’s another big “Find us on Facebook” tout in the bottom-right.

Maybe we are already taking this for granted. However if you take a step back it represents a huge shift away from the rich, “sticky” destination experience built in the hopes people will come back. Instead, we are building out our social spaces in the hope that people will subscribe or fan us where they already are, and ‘like’ our content so their friends see and interact with it too.

What all this means

As this trend away from destination websites and towards social spaces continues to gain momentum, here are some of the corresponding shifts in brand behaviour and activity we’re likely to see:

1. Increasing investment in social media spaces

Social media has to date been considered an experimental line-item for most brands, with limited funding and support. As brands direct their visitors towards social media spaces or look to engage them there in the first place, this is going to change in a hurry.

That said, it will not change nearly as quickly as it should. Just as funding for digital brand activity has lagged the audience’s own shifts in attention and behaviour to digital channels, so will it here. This obviously creates an opportunity. Brands that get it before the rest will reap the rewards.

2. Shift from paid media to social currency that earns media

The next shift is a supplementation, or in some cases replacement, of paid media efforts with content and utility intended to stoke conversation and be shared with friends in these social spaces.

3. Shift from low-frequency, one-message campaigns to high-frequency, targeted interaction

The ubiquitous, mass awareness campaign definitely still has it’s place. However the shift towards social spaces requires a shift in mindset and communication style as well. It means brands can’t just survive on one big static brand expression delivered in blasts that has typified the campaign era. Instead they need to supplement this with an approach adapted to the social media era, featuring many interactions and engagements spread over time.

4. Shift to reactivity, freshness and participation in culture

As the destination web becomes the real-time web, brands will need to become much more agile in order to be relevant. They will need to participate, contribute and stoke conversation on-the-fly. They will need to be acive participant in culture rather than simply a co-opter and long-armed influencer.

Last thoughts

It’s important to make the point that the fundamental goals and objectives of marketing remain the same. Marketers will want to create a connection with consumers, to differentiate themselves positively from their competitors, encourage advocacy and word of mouth. They’ll want to do this in order to increase category size or share within categories, or to encourage existing customers to buy more or more frequently. Those business fundamentals aren’t going away.

What’s changing is the approach. What worked in the broadcast era, and even the destination web era, does not necessarily work in the social web era. And the toolset and expertise required in this new world is much more vast and diverse than any marketer would’ve imagined in the last 50 years.

However the opportunities are there, to create real connections with your customers. And yes, if you do it right you can enable and encourage them to spread the word of your products, services and experiences on your behalf.

So which approaches are you looking at? And where might things go next?

And a couple of parting questions that I’m wondering about right now. Facebook has grown so fast because that’s where the social action was happening. This has sucked attention away from destination sites.

However now that social experience is being enabled on destination sites via Facebook Connect and similar services from Google and Twitter, are we likely to see the traffic slide on destination sites start to flatten out for those brands who use these tools? And what do you imagine the balance of traffic between brand sites and brand presence on sites like YouTube, Facebook, etc will be by 2010?

For more on where are things are heading, check out Jeremiah Owyang of Forrester’s summary of his Five Eras of the Social Web report. His advice for brands around not hesitating, preparing for transparency, connecting with advocates and “shattering” your corporate website is spot on.

The number of augmented reality campaigns launched this week alone is, to the best of our knowledge, well into the double-digits.” Contagious via Twitter

I’ve been meaning to post this since last week, after I saw the Eminem augmented reality execution and thought “I have a bad feeling about this”. Ilya from AdLab has since beaten me to the punch, and as I doubt we’re the only two people sharing these concerns right now, I think it’s worth helping hammer this message home as our industry struggles to be taken seriously and move towards delivering real value.

Let’s first be clear that Augmented Reality is going to be pervasive. It’s not a gimmick, it’s a long-standing concept that is just now becoming a consumer reality.

It’s a catch phrase that seems to be covering a lot of territory right now, but I think the key is the blending of physical and virtual environments in a useful way. That’s the “augmented” part of the reality, it’s enhancing your physical world with a layer of information-based or experiential value.

The concept has been around for ages, at least as long as Arnie’s HUD display in “The Terminator”.

But now we’re starting to see real, consumer-focused practical applications such as this ING Google Android application. It not only helps you find the nearest ATM, it shows you visually how to get there, even showing where you need to take the first steps in the right direction.

You can imagine thousands of useful applications for this. But before we get ahead of ourselves, it’s worth having a quick refresher on the Gartner Hype Cycle, introduced in 1995 and still going strong fourteen years later:

Here’s Gartner’s description of the first two phases:

1. “Technology Trigger”
The first phase of a Hype Cycle is the “technology trigger” or breakthrough, product launch or other event that generates significant press and interest.

2. “Peak of Inflated Expectations”
In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

Augmented Reality is in the process of transitioning from #1 to #2, in record time. Which leads us, unfortunately, to stage #3.

3. “Trough of Disillusionment”
Technologies enter the “trough of disillusionment” because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

And that was, and two years later still is, the fate of Second Life.

Marketers who didn’t understand virtual worlds rushed in and did all sorts of wasteful things, either out of fear of being left behind or out of greed to grab a few the nuggets from the publicity gold rush.

Unsurprisingly, the bubble burst due to the lack of any consideration for ROI or even whether the applications made any sense at all. And now, virtual worlds have been written off by many in the industry, without any real consideration as to the massive marketing potential of virtual worlds for many brands. Which is a shame, as that makes it a waste on two levels, as well as a scar on our industry’s reputation.

So are we about to do this all over again with augmented reality?

As our techno-savvy friends in Radiohead sang, we do it to ourselves and that’s why it really hurts.

The good news is that ultimately, useful technologies and innovations survive and prosper. And it’s the companies that really take the time to think about how to make them work rather than jumping on the bandwagon that come out on top.

4. “Slope of Enlightenment”
Although the press may have stopped covering the technology, some businesses continue through the “slope of enlightenment” and experiment to understand the benefits and practical application of the technology.

5. “Plateau of Productivity”
A technology reaches the “plateau of productivity” as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

So how about we agree here and now not to overhype augmented reality, and instead only focus on truly useful applications of the technology, shying away from pointless gimmicks only really intended for trade press anyway.

No?

Ahh well, worth a shot. Please resume your regularly scheduled PR activity…

UPDATE: More thoughts on the subject of AR and value from Martina at Adverblog along with an interesting example from Brazil. The QR code comparison is spot on. The promise of the technology is there, but it’s all too easy to get caught up in the hype.