Presentation by Linden Dalecki at U.Porto in June 2010.

1. Seminar by Linden Dalecki, Ph.D.
Delivered at the University of Porto the evening of June 2, 2010
WHAT’S PLAYING ON WALMART
TONIGHT?
TRENDS IN DIGITAL MARKETING

2. A little about me
 Copywriter in Hong Kong (loved Macau) and
Washington D.C. (AppNet and Commerce One)
 M.A. in RTF at U.T. Austin (2003)
 Ph.D. in Advertising at U.T. Austin (2008)
 Currently Asst. Prof. at Pittsburg State University
[main research stream is Entertainment
Marketing, particularly Hollywood and Hip-Hop]

3. We need to make assumptions
about future (predictions)
 But should proceed with cautious
assumptions
“We drive into the future using only our
rearview mirror.” --Marshall McLuhan

4. An Overview of Tonight’s
Talk:
 The shift away from interruption advertising
 Review of basic social network theory
 UGC and online promotion
 Atmospherics and retail environments
 One-to-one marketing circa 1993 and today
 Case studies in online promotion
 Industry trends and closing thoughts
 Open the floor for discussion
[p.s.—will abridge video clips throughout]

5. The Death of the TV-Industrial
Complex
 Companies used to spend enormous amounts
on TV advertising and the old rule was
“Create safe, ordinary products and combine
them with great marketing”
 The new rule is “Create remarkable products
that the right people seek out”

6. The Death of Traditional
Advertising?
Yes and no . . .
Yes in the sense that a great :30 TV spot is no
longer all it takes. . .
No in the sense that TV—and many other
traditional advertising platforms—will survive
and thrive in this new era. . .

7. Digital Marketers Rely on
Traditional Consumer Data
Internet marketing relies on traditional
consumer-profiling data:
Demographic data
Psychographic data
Financial data
Purchase behavior data
Media consumption data

8. Media Mix Changes
 Digital—more dollars will move to digital as
consumers continue to migrate there
 Search—more and more dollars will move to
search as smaller companies utilize it
 Print—dollars will shift OUT of print
 Out of home—OHH will increase slightly as more
venues and sites added

9. Traditional Advertising as
“Interruption Advertising”
Versus Non-Interruption
Interruption Advertising Advertising
 Ad content interrupts the  Promotional content is
destination content we are embedded in and of a
drawn to piece with destination
content :
 Consumers have evolved
ways to avoid interruption
advertising [from TiVo to
 BMW ifilms
Adblock]  Google AdWords search
results
 And clutter has became a  even the classic/traditional
major issue infomercial

10. Ideas that Spread, Win
(Seth Godin)
 Ideas that spread rapidly—ideaviruses—are
more likely to succeed than ideas that don’t
 Sneezers are the people who launch and
spread an ideavirus—finding and seducing
sneezers is essential to creating an ideavirus
(targeting specific niches is essential to this
process)

11. The buzz phenomenon
 Consumers are more connected than ever
before, and communicate positive and
negative experiences with their network of
connections
 Recall that hotmail.com went from 0 to
12,000,000 users in 1.5 years (each person
who signed up helped recruit new members
as every email from hotmail included a
message touting the free service)

12. Network hubs hold the key
 People who talk obsessively re: a brand are
considered “network hubs” (sometimes
referred to as “opinion leaders” “champions”
“power users” or “influencers”)
1. Regular hubs
2. Mega hubs
3. Expert hubs

13. 10 characteristics of networks
1. Once latent networks are becoming manifest in digital era
2. People link with others like them (homophily)
3. Similar people form clusters (Mac)
4. Buzz spreads through common nodes
5. Information gets trapped in clusters
6. Network hubs and connectors create shortcuts
(heterophily)
7. We talk to those around us (proximity)
8. Weak ties are surprisingly strong (jobs)
9. The web nurtures weak ties
10. Networks go across markets

14. Achieving success within
networks
 No amount of advertising will sell a poor
product—buzz is generated by the product:
1. Products that evoke emotions (Blair Witch)
2. Products that promote themselves (iPod)
3. Products that leave traces (hotmail)
4. Products that gain utility as more people use
them (fax, email, phones)
5. Products that are compatible (Palm + PC)
6. Products that are easy to use (Flip HD
videocam)

15. Actively seed your products
 A “seed unit” is an actual product or a
representative sampling from the product
you are trying to promote, which you place in
the hands of your seed customers
[give people in multiple clusters direct
experience with your product to plant the
seed that stimulates discussion in multiple
networks simultaneously; examples of SXSW
2007/twitter and Cannes 2010/Flip HD cam]

16. Six Rules about Promo and Buzz
1. Keep messaging simple: short concise
messages can be passed on [“high concept”]
2. Tell what’s new
3. Don’t make claims you can’t support
4. Ask customers what’s special about your
product or service (if they can’t tell you, they
can’t pass it on via WOM/eWOM)
5. Start measuring buzz
6. Listen to the buzz

17. Successful Brands Which
Don’t Utilize “Traditional Advertising”
and do leverage Social Networks:
Anchor Steam Brewing Company [perceived as
more authentic by aficionados who
appreciate the lack of advertising]
Costco [programs such as Car Buyer program
generates buzz via market mavens]
Monster Cable [extremely powerful retail
network keeps competitors out]

18. Buzz in distribution channels
 Monster Cable and its strong relationship with
retailers [Best Buy, Guitar Center, Apple etc.]:
1. discount programs for sales reps
1. bonuses offered to top sellers [trip to San
Francisco, access to the company’s fleet of
sports cars, etc.]

19. Monster Cable’s “Beats by Dre”
http://www.beatsbydre.com/
[joint-venture between Monster and Interscope
and the use of an “authentic opinion leader”]
http://www.beatsbydre.com/about/about.aspx
[great anecdotes re: early promotion of iPod, hip-hop
industry, piracy, audio technology, MTV, public visibility
of products, opinion leadership, Eminem, Lady
Gaga, YouTube, etc. “our goal is not to be used by the
media, but to be the media itself”]

20. User Generated Content
 Growth in UGC will increase due to:
1. Online social networking
2. Publishing (blogs, ebooks, ezines)
3. Sharing (YouTube snapfish, flickr, Yahoo! photos)
4. Creative expression (mashups, cell phone vids, Diet
Coke + Mentos, etc.) screen:
http://www.youtube.com/watch?v=hKoB0MHVBvM

21. Levi’s Promotional Content
Masquerading as UGC
 http://www.youtube.com/watch?v=pShf2VuA
u_Q
 http://www.youtube.com/watch?v=1l_v1K3G
wUc&feature=related

22. Paco Underhill
He uses similar techniques to Account
Planning, and is basically a “retail and service
environment anthropologist”
CEO and founder of Envirosell

23. Paco Underhill’s
Envirosell
Envirosell is a New York-headquartered research and
consulting firm specializing in studying retail and service
environments
[founded by Paco Underhill in 1986]
Focus is to study “where products and people meet”—
[stores, banks, restaurants, service facilities]
Offices in New York, Mexico City, Sao
Paulo, Milan, Bangalore and Tokyo, clients in 26
countries
Envirosell claims to provide its clients “with tools to

24. Partial Envirosell Client List
Bank of America Sony Music
Citibank Time Inc.
Unilever
Lloyd’s (United Kingdom) Wrigley
Wells Fargo Bank
Adidas
Einstein Brothers Bagel The American Museum of Natural History
Kentucky Fried Chicken Bath & Body Works
Best Buy
McDonald's Bulgari
Olive Garden Circuit City Stores
Starbucks Coffee Discovery Channel Stores
Subway ExxonMobil
The Gap (including Banana Republic and Old Navy)
Taco Bell Godiva
L.L. Bean
20th Century Fox Nokia
Coca-Cola OfficeMax
Estée Lauder Payless
Ford Motor Company Petsmart
Saks
Frito-Lay T-Mobile
General Mills TJX (TJMaxx)
Hallmark Cards Target
Hewlett-Packard Trader Joe's
United States Postal Service
Johnson & Johnson Verizon
Kraft Foods Virgin Mobile
Microsoft Walgreens
Miller Brewing Company Walmart
Pepsi
Procter & Gamble

25. Atmospherics
The study of consumer environments from a
design aesthetic and theme perspective
(Disney as early an innovator)
http://www.envirosell.com/index.php?option=c
om_content&task=view&id=230

26. Actionable Findings
 The “butt brush” factor
[placement of necktie rack near a busy aisle]—
post-adjustment sales went up “quickly and
substantially”
 Adults pay for dog treats
[but children often drive the purchase]—after
dog treats were moved down the
planogram, sales went up immediately

27. Little things that mean a lot
Underhill noticed teen 45-rpm record shoppers
craning to see a high-placed Billboard chart
After lowering the chart, sales of 45s went up by
20%

28. Doorways
“We paid particular attention to the ‘doorways’—our
term for any path leading into or out of an area of a
store”
“Until the client knew which paths were most
popular, it was impossible to make informed
decisions about where to stock what, or where to
place the merchandising materials meant to lure
customers”
Is there an online analog for “doorways”?

29. What’s percentage of men, vs.
women, who buy jeans after
trying them on?
Men: 65%
Women: 25%

30. Percent of in-store
purchases that are
unplanned?
60 percent of in-store purchase decisions are
unplanned purchases

31. Walmart in US and
Portugal’s Xare Media:
 Xare Media’s implementation of customer-
tracking system that differentiates potential
retail-screen viewers from actual viewers and
delivers increased ROI
 Walmart’s shift from old school in-store
Walmart TV to new school Walmart SMART
Network

32. Walmart TV: Old vs. New
Old Walmart TV network New SMART Network
1. Audience aggregation 1. Helping shoppers shop
smarter
2. 30 second ads 2. Formats designed for
retail
3. Zone specific flatscreens
3. Single-channel CRTs
4. Lift-based pricing
4. CPM-based pricing

33. Walmart SMART Triple Play
Walmart’s premier SMART Network ad buy is
called the “triple play”, where a campaign is
shown on 1) a large welcome screen at the
Walmart entrance, 2) a category screen in
departments and 3) endcap screens on each
aisle

34. Impression Results for
SMART?
SMART Network reports 140 million
impressions per week, with a CPM of $2-4
Thus, from a GRP [gross rating point]
standpoint, Walmart is the fifth largest
network in the US, just behind ABC, CBS, Fox
and NBC

35. SMART Sales Boost
Sales lift by department:
Electronics : 7%
Over the counter TC: 23%
Food: 13%
Health/beauty: 28%
Sales lift by product type :
Mature item boost: 7%
Item launch: 9%
Seasonal push: 18%
Price leadership (items on rollback): 6%

36. SMART Future?
 Screenmedia Expo Europe May 2010 keynote
speech: “The Dawn of Dynamic Retail: How
Walmart upgraded its signage network and
discovered the power of customer
relevance”
 Focus on A) better screen placement (recall
Underhill’s Billboard top-40) and B) increased
relevancy [seasonality, weather, region
specific factors, etc.]

37. What’s Playing on Walmart?
in Other Senses as well. . .
Current DVD in-store sales and rental kiosks. . .
Possibility that Walmart will develop a branded
entertainment content platform …

38. Walmart / PSU connection
Lee Scott:
http://en.wikipedia.org/wiki/Lee_Scott_%28bus
inessman%29
Steve Scott

39. "The One to One Future” by Don
Peppers and Martha Rogers (1993)
1. Aim for “customer share” not “market share”
2. A comparison of mass vs. 1:1 marketing
3. Learn 5 things about your customers
4. Reorganize your firm for 1:1 marketing
5. The customer managers take charge
6. Preaching is out; dialogue is in

40. Aim for “customer share” not
“market share”
 Utilize interactive media to track individual
customer transactions [example of brick-and-
mortar Waldenbooks’ frequency-marketing
program. . . or more obvious “recent”
example of Amazon.com—remember, this
piece was written in 1993]

41. A Comparison of
Mass vs. 1:1 Marketing
Mass marketing 1:1 Marketing
1. Requires product managers 1. Requires customer managers who sell
selling 1 product at a time to as as many products to one customer at
many customers as possible a time
2. Marketers try to differentiate 2. Marketers seek to differentiate their
their products customers
3. Marketers try to acquire a 3. They also seek new business from
constant stream of new current customers
customers
4. Marketers concentrate on 4. Marketers focus on economies of
economies of scale scope

42. Learn 5 things about your
customers
1. Which customers are most valuable and why?
2. Which customers aren’t worth catering to at all?
3. Which customers will give generate more
business via referrals?
4. Which prospects are you most likely to convert
to customers?
5. What type of consumers are real prospects?

43. Reorganize your firm for 1:1
marketing
 Brand managers supported by
advertising, sales promotion and PR will need
to be let go or retrained
 In new firm each “marketing manager” will
have a portfolio of customers with an
emphasis on “individual consumer
communications” rather than mass
advertising

44. The customer managers take
charge
 Unlike stock market, there is no market for
“customer lifetime value” yet they can and
must be statistically projected and
mathematically guessed (growth
algorithms, etc.)

45. What is Google Good For?
 AdWords and AdSense (good for e-POS
advertising [transaction fullfilment], not so
good for brand advertising)

46. Internationally Successful
Contemporary Web Sites
 www.bacardi.com
[50+ countries, 25 + languages, Brazil
listed, though Portugal currently is not]
 www.experience159.com
[designed exclusively for Alpha Romeo – France
resulted in a million hits across 100
countries, over 1,000 test drives]

47. Not Your Daddy’s got milk?
The revamped www.gotmilk.com website
Get the Glass Online Game:
http://www.gettheglass.com/
White Gold is White Gold:
http://www.youtube.com/watch?v=5yHtDlSaoj
8&feature=related

48. Funktube Case
[Som Livre Records]
 FunkTube (Brazilian UGC choreography
competition—very savvy in ways that various
social media are leveraged together)
 http://www.youtube.com/watch?v=yecp97Bd
8_U

49. Social Media Marketing:
Greenpeace Brazil
 Social Marketing: Greenpeace: Trangênicos
spot in Brazil:
http://www.youtube.com/watch?v=mqYqwT6
KRZM
 and GreenTube (Brazil):
http://www.youtube.com/watch?v=AKLcUbv
CxHw
http://www.youtube.com/watch?v=AZyXHO
w-A08

50. Dominos revamped website
 www.dominos.com order fulfillment site
[“113 quintillion pizza variations possible”]

51. Diesel’s Online Efforts
 Style Lounge – Diesel Online Store:
http://www.neue-
digitale.de/projects/diesel_stylelounge/
Diesel’s “the Heidies”
 http://www.heidies.com/
 google : "safe for work" diesel
[20 million + total YouTube views]

52. Sprint NOW Dashboard:
 http://now.sprint.com/nownetwork/
[developed by Goodby, Silverstein & Partners]

53. Window’s Vista
“Clairification”:
Hip by Association
 Microsoft “Clearification” campaign for
Window’s Vista w. Demetri Martin (use of
UGC sites such as YouTube, Google
Video, MSN, AtomFilms, iFilm, Revver, etc.)
 http://www.youtube.com/watch?v=h4b2QNn
VrY0

54. Coke Zero + Mentos
“rocket car”
 http://www.youtube.com/watch?v=-
EK09QvK4Fc&feature=related

55. How do big firms track
online discussion re: their
brands ?

56. Netvibes
[“dashboard everything”]
http://www.netvibes.com/
Netvibes now touts the following to marketing
enterprises:
• Brand Monitoring – “Track clients, customers and
competitors across hundreds of media sources all in one
place”
• E-Reputation Management – “Visualize real-time Twitter
conversations and social activity feeds, and track new
trending topics with drag-and-follow smart widgets”
•Product Marketing – “Create fully interactive product
microsites in minutes”

57. Methodoligical Claims by
Neilsen BuzzMetrics
“Nielsen uncovers and integrates data-driven
insights culled from nearly 100 million blogs,
social networks, groups, boards and other
consumer-generated media platforms.”
“Nielsen methodology employs:
A robust harvesting system that pulls data
from a range of online media sources.
Complete data control for delivering real-time
measurement and analysis.
Optimal mix of vertical industry knowledge and social media expertise.
Balanced investment in text-mining, analytic technologies and expert
analysts.”

58. Nielsen BuzzMetrics
[Brand Association Map]

59. Hot Digital Marketing Areas
 Social media marketing synergy (plug-ins
that tweet your new blog posts, embedded
YouTube videos, blog with TweetMeme
buttons, etc.)
 Flip HD, Qik and social-media video
 Mobile marketing and mobile apps
 Mobile Analytics (DoubleClick)
 Geosocial Networking (Foursquare and
Gowalla)
 Micro-payment content-licensing models

60. 3 Predictions re: Ad-driven
Content Model
Proliferation of both:
A) blended promotion/content (where the
content is the promotion and vice-versa)
B) a return to the bookended “brought to you
by ____ soap” model
C) a blending of A and B (Ford in 24)

61. A Few Closing Thoughts
 In the future, advertising alone may not support
premium content
 Free-mium (“free is always matched with paid”)—give
away A to sell B (Anderson—“If you get freemium right,
you don’t have to buy ads”)
 From Broadcast to thinslice Narrowcasting [increases
relevance to consumer]:
Destination sites will lose audiences to fragmentation
(driving the need for continuous improvement in
aggregation and analytics)

62. From: Reach and Frequency
To: Relevance, Reach and Frequency. . .

63. Obrigado!
Let’s open up the floor for discussion…