When most marketing and advertising executives hear the words "application programming interfaces," their eyes glaze over and they stare blankly into space. They better not gaze too long. This technology enables marketers to generate money from digital online content that someone else created, says Eryan Petersen, Microsoft's advertising evangelist. At a panel discussion Monday at the OMMA Global Hollywood conference in Los Angeles moderated by Petersen, she said, "These tools make it easy to add content onto a publisher's site, unlocking value for brands without [their] having to do the work to create the content," likening APIs to Lego building blocks. These slivers of programming code that connect widgets or applets to platforms like MySpace or Flickr can generate revenue for Web sites that rely on consumer-generated content to survive. YouTube, Wikipedia and Facebook have all capitalized on contributed content through APIs. YouTube, with its 206 million users and about 185% yearly growth, has learned how to monetize user-generated content without having to create it internally. Wikipedia's 211 million users have contributed about 8.2 million articles for free. Facebook has about 69 million users about 300% annual growth, Petersen says. APIs make it possible for Picnik, an online browser photo editing tool that has made its way into popular apps, to share revenue with Flickr and others. The company created APIs to let advertising and marketing agencies, along with consumers, connect Web sites with creative tools and applications. Picnik also has entered into talks with camera manufacturers and other photography-related companies to sponsor editing tools that may integrate into social network or photo-sharing Web sites as a method to generate additional revenue. Every minute consumers spend with Picnik's applications means more exposure to brands that sponsor the tool. "The average user session is about 17 minutes," says Monica Harrington, marketing guru at Picnik. "Brand marketers want to figure out a way to get close to the consumer that's not intrusive." Monetizing widgets, applets and snap-on applications, Seattle-based Picnik has plans to launch a printing service, along with a tooth-whitening feature that allows users to whiten one or many teeth in a photograph before posting it online. Still, an increase in more applications means sites will begin to control the number of applications posted to the site because too many applications can cause a drop in traffic. "Facebook, for example, recently experienced a drop in visitors to its site and now plans to control how many applications are distributed," says Daniel Mathews, enterprise evangelist at Microsoft.
Ironically, an online brand reports, it remained rather unknown to potential customers until it launched a TV campaign. And, says its CMO, television remains "the most powerful reach vehicle and driver of brand awareness." John Swigart, who leads marketing at Esurance, told an audience at Monday's OMMA Global Hollywood conference in Los Angeles that the company started as a brainchild eight years ago and is now a major player in the $160 billion auto insurance industry. In his keynote address, "All Circuits Are Busy: Keeping Up in the Digital Age," Swigart said that brand awareness of Esurance languished until the company launched its first TV ad, featuring an animated pink-haired pixie named Erin. "Consumers equate a company's size to whether they see you on TV," he admitted. Follow-up focus groups confirmed that the personification of Esurance by Erin translated to its having a personality. "TV," he concluded, is not as dead as some people profess it is." As for measuring that success, Swigart said Esurance saw its landing rate rose in search listings, for several weeks enjoying the top spot after the TV spots broke, the company took a sponsorship in Live Earth and followed up with PR. "Landing is the buzz meter," he said, "and we keep track of it." Esurance keeps a keen eye on "shopping share versus marketing share. It takes years for the market to turn over," he said, since people rarely shop for insurance, which Esurance has grown to offer in several categories. "The key is to make them remember our name." On the Internet, it focuses on engaging Internet consumers, especially those who are comfortable doing complex financial computations online. "We have surpassed State Farm, All State in active awareness," he said, because consumers know they can get a quote on Esurance. "Either they've done it or they will." There is tremendous power, he said, in "web fronts or store fronts," advising marketers to listen to consumers "tell you what you need to do."
This year, Stephen Berkov, former director of brand marketing and innovation at Audi of America, left after an eight-year stint to join automotive Web site Edmunds.com. Berkov, now Edmunds executive director of client strategy, says the change puts him more in the mix among different stakeholders wrestling for brand consideration, sales and the right product at the right time. Berkov, who also served in marketing positions at Peugeot, KPMG, Ford and Toyota, says he's now at a point in the commerce channel where consumers, dealers and marketers either meet or pass like ships in the night. Marketing Daily had a chat with him. Q: How is this job different from what you were doing at Audi?A: It's an opportunity for me to use my experience on the manufacturer's side, building consideration. So much of the shopping process has moved online--and that's where the CMO is, as well. I see my position as the nexus of customer and brand plus product and dealer. Q: What does Edmunds do for marketers? A:There is intense pressure from CMOs to see return on marketing investment. It's getting more and more difficult as budgets are constrained. At the same time, [automakers] have pressures from parent companies, from Wall Street. At end of day, how much time is the CMO really able to focus on the customer? I think the aspect of the Web that is being spoken about, at least in context of marketing and brand consideration, is metrics. Q: How is the economy affecting consumer traffic to Edmunds.com? A:With the economy in difficult times and the car market being stressed, many would think people are not in the market for a vehicle. Yet it's fascinating to see how many more people are turning to sites like ours for information to better make smart decisions. While sales may be decreasing, our numbers have increased. In the luxury car segment last month we had 550,000 unique users, and that's up from 441,000 unique users--and this is only for the luxury car segment. Our total Web traffic is 15 million. Q: What's your principal role?A: I'm directly involved with the strategic vision of the company, the sales team, and the tactical operations of developing products. It involves talking to [automakers] about their needs and being able to revise the strategy so their purchases can be tailored to their needs. It's not about selling data, it's about developing marketing programs with [automakers] and with tier two (dealer groups). The companies that may be seen as competitors are selling data. This is developing marketing programs that provide real-time live data and using it to refine marketing programs. Q: What is an example of that? A:We have a program called Edmunds Consideration Marketing in which we take brand-consideration marketing strategies from [automaker] clients and then optimize consideration on our site. In terms of data, there are monthly report cards which show the whole purchase funnel starting with consideration and favorable opinion down to purchase intent. Q: How has digital media changed the paradigm? A:Traditionally, consideration followed favorable opinion. We see a switch that puts consideration, not favorable opinion, after brand awareness and familiarity. We are more circumspect: Only after I consider a brand or product will I develop a favorable opinion. That means [Edmunds] is all the way up to the top of the funnel, with strategically planned media. Creativity, innovation and relevancy leads to consideration. The ability to stay relevant is the challenge any brand faces.
Hilton Garden Inn, a global, mid-priced hotel brand, is launching its first TV effort in many moons and its largest media buy to date. The effort is part of "Tomorrow's a Big Day," a brand campaign that HGI launched last summer to pitch the hotel as home away from home for those preparing for a big day. Santa Ana, Calif.-based DGWB Advertising and Communications handles. L.A.-based Swafford & Company Advertising also worked on the campaign. The new TV spot - in 15- and 30-second iterations - will target business and leisure consumers in media like CNN, Discovery, Fox Sports, HDL News, E!, National Geographic Channel, Hotel Networks and Metro Networks. The ad shows a series of guests making themselves at home - preparing for a wedding, for a business meeting - by using guest-room office areas, relaxing in saunas, working out, eating in. Ads promote the chain as a hotel conducive to sleep, good food, work environments, health and fitness. There are also two 30-second radio spots that broke nationally on Monday on Westwood One's "Dennis Miller Show," ESPN's "Mike & Mike in the Morning" and Premiere's "The Bob & Tom Show." The HGI Web site was also upgraded to comprise "Big Day" landing pages, and the company has boosted its online efforts with buys on AOL Media Networks, MapQuest, Golf Digest, Trip Advisor, Drive PM and Unicast Video Network. The new leg of the campaign, the first cable broadcast effort for HGI since 2004, augments the current print and interactive effort in titles like USA Today, Inc., Golf Digest and Fast Company. Online ads for the campaign have run on sites like Oprah.com, ESPN.com, Forbes.com and hiltongardeninn.com. The latter hosts a series of 15-second video vignettes. Jim Cone, VP/marketing at HGI, says the creative, unusual focus on real people instead of solely on amenities reflects consumer insight. "We spent a lot of time with consumers starting early last summer, speaking with them about business travel and leisure travel; what they like and dislike and what Hilton Garden Inn meant to them," he says, adding that the spot was inspired by what customers said. "Something we heard loud and clear is people love HGI because they feel they are at home. They aren't afraid to sit and relax; we wanted that to come across." He says the scope of the campaign reflects the chain's growing footprint. The company recently opened its 358th hotel worldwide, and will expand into Costa Rico, India, China and the UK. The company recently opened hotels in Poland and Russia. "We are opening around 70 properties over the next year both in the U.S. and internationally, so we are truly becoming a global brand." He says the company has 338 hotels domestically. "In the U.S., we finally have coast-to-coast distribution; it's our opportunity to grow the awareness of our brand. While we have heard from customers that Hilton Garden Inn is a 'best-kept secret', our goal is not to be a best-kept secret."
For decades, consumers have taken to VIP programs, cashing in for discounts, flights, hotel rooms and generally desirable stuff, whether extraordinary experiences or everyday necessities. Because consumers developed such a taste for treating themselves based on their usual purchases and incremental spending, nearly all consumer-facing businesses have adopted points or recognition programs. A recent study by Mercator Advisory Group, Boston, contends that retail bank marketers--chiefly those selling checking accounts--do wrong by consumers in offering template programs with even the lowest award thresholds out of reach. Positioned along with (and perhaps as a distraction to) rising account fees and questionable check-clearing practices, many newer reward programs in retail banking do little to make their sponsors stand apart from the competition, finds Elizabeth Rowe, Mercator's Bank Advisory Services group director. If banks are taking shortcuts where they aren't truly thinking through the uniqueness of their rewards offerings or the earn velocity customers can receive, their competitive advantage will be short-lived, says Kelly Hlavinka, senior director of the Colloquy Group, a frequency marketing consultancy. It's not too late for banks to pull away from this double whammy of consumer disappointment. And, fortunately, their mistakes in loyalty marketing haven't hurt the reputations of other rewards program providers in the travel, hospitality and retail sectors, the women say. Deposit Account Relations A Real Downer Even before the subprime loan crisis, increasingly diversified banks sought to even out the performance of lines of business by boosting the fee income from consumer checking accounts. "Banks have been leaning on the retail side of the bank for years for profit generation, and thin rewards programs and huge overdraft/insufficient fees are all a piece of it," Rowe says. Overdraft fees have multiplied, especially as some banks have started to process checks days after they are received as deposits and from highest dollar amount to lowest dollar amount as they are presented for payment from customer accounts. Both policies maximize bounced checks. Mercator's research discloses that $17.5 billion is made industrywide from overdraft fees. The figure represents 6% of the U.S. banking industry's total non-interest income, but accounts for a disproportionate share of customer disenchantment. "All of the pressures that any of these businesses feel are certainly encouraging banks to charge fees, but it's going to come back at them," Hlavinka warns. To add insult to injury, Rowe says, bank rewards programs dole out an iPod only after a customer spends hundreds of thousands of dollars through his debit card. Banking's Equivalent Of Beer Goggles Turnkey loyalty programs look good to consumers who are intoxicated with travel and retail rewards. But that impression wears off rather quickly as the programs reveal repetitive rules and benefits. "That whole white-labeling phenomenon makes a world of sense for banks," Rowe says. But banks that try to pass the programs off as anything but commodities will lose customer trust. "They have to take time to do more due diligence upfront in strategic design," Hlavinka says. "It's going to pay off to differentiate a brand from competitors." And to capture the loyalty consumers are willing to give; 58% of Americans surveyed by Colloquy have positive perceptions of financial services loyalty programs. However, Rowe believes that these numbers may drop off if banks continue the loyalty strategies they have launched. "Banks don't seem to have their hearts in it," she says of rewards programs, and possibly their marketers felt defeated before they even started pushing points. "The world is rife with airline mile/grocery/other frequent-buyer programs, so how's a bank to compete against those for the hearts/wallet share of their customers?" Rowe asks. "It seems that checking rewards programs have become placeholders on the home pages of major banks," she says, imagining banker thought: "'Oh, our customers expect us to offer rewards for transactions? Well, sure, we'll throw a little marketing package up on our Web site, and then we'll be done with that.'" The Party Is Still On With Loyalty Programs "The 900-pound gorillas in this space are airlines and American Express, and banks want to seem to be competing with them in the rewards space," Rowe says, "but they're really not." Banks' shortcomings in special treatment of customers have not had a negative impact on loyalty in other business sectors, however. "If anything, the bank programs make everyone else look pretty great," she says. Hlavinka believes that successful rewards programs and policies that retain customers and grow their financial value will evolve across industries. The number of financial services' loyalty programs grew 163% between 2000 and 2006, according to Colloquy. "The amount of growth in programs and members has been astounding and is adding pressure to any bank to evolve its program, to keep it fresh and make sure it's engaging and competitively viable," Hlavinka says. Rowe agrees that banks can recover goodwill with more transparency about their practices. "Young boomers and Generation X have a lot of needs and a lot of years for those needs to be met," she says. "That's a lot of years to get off the non-interest fee bandwagon and get back to the good old-fashioned banking profitability generation of account service charges and interest spreads."