Entries Tagged 'Product Marketing' ↓

 Recovered Posts: So I switched blogging software and haven’t managed to get the old posts back. While I may have the time to figure it out one day, I figured I would take the opportunity to reprint some of my favorite old posts. I apologize for those who have been around since the beginning. Ignore if you like.

Today, eMarketer predicted a huge growth in the area of behavioral advertising, and I figured it might be a good time to find out exactly what that is. So, I researched. I read. I asked, and I will relate my findings. In an effort to retain some originality as I rehash a definition many of you might be familiar with, I will discuss this in an unnecessarily elaborate metaphor.

Imagine you are an advertising agency contracted to advertise a variety of savanna related products and services. These are products and services useful to denizens of the grassy plains of sub-Saharan Africa. One of these products is an anti-lion spray, favored particularly by zebras and gazelles, called Not-Prey. One small spritz of the Not-Prey spray and lions will turn up their noses at even the youngest and sickest potential provender.

Your agency, realizing the importance of targeting, has decided against the more high visibility but haphazard options in savanna advertising such as bull elephant billboards or choreographed buzzard skywriting. The expense of these options (not to mention the hazards involved in painting the side of an irritable elephant) have encouraged more “targeted” techniques. While a breathtaking vulture presentation in the air above your potential customers has the possibility of reaching a very large number of viewers, it also is seen by everyone else in the area, and you’re paying for that exposure.

Instead, your agency decides to target an area frequented by your demographic. Prey, with all the running they are forced to do, are often tired and thirsty.  They require a significant amount of water to stay fast and agile, and thus, they have an extraordinarily high rate of watering hole visits. The target audience for Not-Prey are some of the most regular users of the watering hole and, therefore, that location is a great place in which to reach them. So, you hire a few local amphibians to pop up with a carefully crafted advertising message (something about not being eaten) as watering hole users bends to take a drink.

This is a pretty standard style of targeted advertising that locates its customers through the content they are consuming, in this case, water. However, the problem is that a fairly wide range of individuals might consume similar content, in this case, virtually everybody. So, even though you are getting a high number of views, a considerable number of which are from your targeted demographic, there a still quite a few irrelevant ad messages being delivered. For instance, lions, who also use the watering hole, have no use for Not-Prey and, in fact, might be irritated by the ads. It is not wise to irritate a lion.

So, your agency decides to pursue a behavioral advertising campaign. You hire some smarter amphibians who, by observing the behavior of the creature bending down to drink, can deliver a relevant message on a relevant product or service. For instance, if the drinker has a tendency to be chased, pulled to the ground and eaten, the amphibian will deliver an ad for Not-Prey, whereas should the fearsomely clawed and sharped-toothed water-slurper be more likely to be the chaser than the chasee, the amphibian might deliver ad for a more relevant product like Hyena Heckler, the predator’s answer to nature’s jerk.

Behavioral ads are not attached specifically to the content being consumed. Instead they are based on past “behaviors” or actions. In web terms this can mean search terms or sites visited (on the savanna it can mean previous responses to the smell of weakness). The technology to present these types of ads, tailored to the users history of interest is growing more and more sophisticated. This, according to eMarketer, leads to significant growth as companies see the conversion rate benefits of behaviorally targeted ads.

Help a Neophyte:
As a consumer, how would you feel about being targeted according to prior activity? Is this a privacy concern, or would the relevancy of the ads to your interests actually reduce irritation at advertisements? If, as advertisers, we make use of behavioral advertising, do we risk offending customers by appearing to “spy” on them?

As our product begins its real entrance into the market we have been thinking quite a bit about pricing. In the course of this I have come upon a few basic “rules” for setting product prices. These may seem obvious to most of you, but sometimes restating the obvious can provide useful insights. Besides, I don’t have a great memory, so the more repetition the better.

First, your prices must be high enough to pay yourself and your employees, grow and maintain your infrastructure and satisfy your investors. Like I said, obvious, but it bears repeating because so many companies fail to do it. Competitive markets exert a great deal of price pressure, and the temptation to cut margins is, at times, too much for those looking to out maneuver the competition. Playing too close to the edge leads to cranky, underpaid employees, poorly maintained, out of date equipment and disappointed investors. If “the lowest price” is your only selling point you risk stymied growth and a sub-par working environment which brings us to our next point . . .

Your prices must accurately reflect the perceived value of your product. Um . . . duh. Again though, this is something to be thought about carefully. If your prospect’s can’t find enough value in your product to meet the above requirements for setting prices, you either need to change the product, change the perception or pack up and go home. There is only room for one “lowest price” product in a given market and, frankly, that’s no way to live. Raise the perceived value of your product and charge accordingly.

Thirdly, pricing needs to be simple, particularly if you are providing your product to someone who plans on reselling it. Upfront costs and recurring fees need to be straightforward and consistent. Options should be few and generally inflexible. Customers are most comfortable if they are able to budget without concern for future changes or surprise fees. Simple pricing also increases trust among customers wary of schemes and underhanded trickery.  Talking to prospects in Las Vegas this past week really drove this point home as VARs were discussing ways of passing our fees on to their clients. Simplified, predictable pricing definitely gave us an advantage.

There are, of course, many more detailed rules and practices regarding pricing. Unfortunately, as a neophyte, I am still learning about them, but I’ll pass on whatever I pick up. In fact, here’s an interesting article on the 19.95 phenomenon. Apparently their are psychological factors at play in that seemingly transparent tactic.

Help a Neophyte:
I am sure I missed plenty of basic rules that the rest of you are aware of, so lay them on me in the comments.

No, this is not a question for peeping toms and voyeurs (we already know their answer). It is a question for you, the marketing guy/gal. Do you get the opportunity to watch people interact with your product? Do you take that opportunity?

Often it is difficult to imagine a product being used in any way other than the specific way your company intended. Knowing the product as well as you do, it is hard to imagine what someone else might do with it. It is nearly impossible to imagine the many places people will struggle with your product, impossible to predict what will be easy and what won’t. It is hard to say what will impress, stun, wow.

The best way to discover these things is to observe users interacting with your product. For some this may be easier than others, but it is important for everyone.

Help a Neophyte:
What tools and techniques do you use to see your product in use? What would you like to try?