Dave’s Take

I am constantly amazed at the number of small business owners I meet who still don’t believe a website is worth the investment. Or even worse, they buy a cheap template for their site and then fail to update or promote it. Next to a bad location, nothing stymies retail business more than not having a presence on the Web. These clueless owners don’t seem to understand how successful branding starts and ends with the Internet. To put it simply – a business without a website is a business waiting to fail. In the 21st century, a business must have a topical Web presence to survive.

A recent Yahoo WOM (word of mouth) survey reveals just how important the Internet is for peer-to-peer WOM recommendations. Yahoo researchers discovered that while only 7% of all brand WOM conversations occur online, almost 40% of all WOM conversations are influenced by the Internet. Think how many times you or someone you know has started a conversation with, “I read on the Web today about…” This is WOM branding 101 and it’s gaining in influence on a monthly basis. Clearly, if you ignore the importance of online WOM branding you are ignoring a huge stream of potential customers.

Some more surprising facts included in the Yahoo report:
• The Internet is growing in terms of WOM importance. All other media sources including TV and newspaper are flat in regards to creating WOM.
• Two-thirds of WOM is positive, with only 8% considered negative WOM.
• Certain businesses, such as financial and automotive appear to do better than most in online WOM conversations.
• Very little WOM is attributed to social media sites, as most conversations take place face to face. The level of Internet influence in WOM discussions has risen almost 5% over 2009 conversations.
• Almost 15% of ALL conversations include something from people who found the information online.

These stats act to cement the belief that without a website, your business will have a heavy uphill battle to be successful. The study also reveals how important website content is to prosperity. Visitors expect to be educated about your product or service in a professional and timely manner. Failing to update or include all necessary information will not only fail to increase sales, but can actually work against a business. Just remember, creating good Web copy is easy…just put yourself in your customer’s seat and see if you get what you need from your portal. If not, it’s time to change the message before it’s too late.

What do Papa Johns, Pepsi and American Express have in common? Besides all being successful major American businesses, they have also all decided to truly test the power of the Internet by going out on a limb and placing all their current ad dollars into one basket – social media. No broadcast, no outdoor, no DM and no print – just their brands riding on the wings of Twitter, Facebook and Foursquare. Daring yes, but smart strategy? Only time will tell.

These big players are the just the tip of the iceberg should their daring roll of the dice prove profitable. I’m sure more than just a few TV stations are watching this play with bated breath. If it works, the floodgates will open and the current rate cards for newspapers, radio and TV will drop faster than the stock of British Petroleum. Even though social media has been growing tremendously over the past three years, it still remains an unproven channel for direct sales and marketing. Clearly, there are still a lot of unknowns in the social media world, but apparently not enough to scare off these big players.

“Social media is the hottest thing out there,” says Janet Fouts, a social media coach (whatever that title means). “The ones who succeed are the ones who will land the tech-savvies, the Gen Y’s and the Gen X’s,” she went on to explain. While few doubt the casual impact of social websites, no real studies have shown any quantitative traction for social media channels to actually move viewers into action. In fact, most studies have shown just the opposite – social sites are great for branding and promotion, but not for driving sales.

Not only are sites like Facebook and MySpace ill equipped for actual sales promotions, trying to force-feed social media subscribers promotional gimmicks may actually backfire for the advertisers. According to Jay Baer, a social media “guru” (again with the self-made titles) the growing number of social media promos could in fact create “participatory clutter” within the social media world. This clutter will only produce fatigue and frustration among the participants of social media sites. In short, using social media for advertising and marketing defeats the social aspects of the sites, thereby destroying any credibility a sponsor may have earned through previous sponsorships and support.

Will the inclusion of social media members in product design and promotion outweigh the “big brother” aspects of advertising in a previous ad-free environment? Who knows—but what I do know is that a lot of ad people will be watching these summer campaigns with a nervous eye.

In what might be the flakiest ad campaign idea ever, Kellogg’s UK cereal plants are combating “counterfeit flakes” by using lasers to burn the Kellogg’s logo onto random corn flakes, thus reminding the consumer of who’s flakes their eating. Apparently, Kelloggs is tired of losing market share to store off-brand corn flakes. Concerned that consumers are unaware of the origin of the generic flakes, Kelloggs has decided to brand their brand, so to speak.

Utilizing specialized lasers that allow a focused beam of light to create a very small darkened spot on the corn flake, Kellogg’s process burns their logo on the flakes without effecting the cereal’s taste. They are not spending the resources to etch every flake, just a few per box.

Will this branding make a difference? I sincerely doubt it. Consumers who truly care about and can afford a specific brand will buy it. Store generic brands are purchased by people who care more about saving money than supporting particular companies. Purchasers of brand products do so because they are convinced the higher price is justified by a better product. How much taste difference there is in something as bland as corn flakes is questionable at best.

Furthermore, I fail to realize how burning a logo on just a few flakes per box will enhance brand recognition. Do you scrutinize each bite of your breakfast? I think Kelloggs is missing the boat when it comes to branding the importance of their unique corn flakes. Also, I have yet to read about the burgeoning fake flake market. In other words, who really cares? I sincerely doubt the major generic product manufacturers are holding secret meetings on how to beat the laser.

At best, the laser corn flake campaign will attract some free publicity. At worst, it could spur a flurry of laser-etched logo campaigns. Do we really want to see Wonder scorched on our bread or Lays printed neatly on our chips? No and no.
If Kelloggs is serious about increasing market share in comparison to generic cereal, they might try something a tad bit more traditional–like lowering their prices.