PM Digital has grown exponentially since it was launched in 2002. In the past year, PM Digital expanded its existing search engine marketing capabilities by providing access to an even deeper pool of talent in the natural search and social media marketing areas. MediaHarbor® continues to evolve and help PM Digital’s clients drive results. Built exclusively by PM Digital, MediaHarbor® simplifies and optimizes search performance on a real-time basis and gives clients an edge by effectively scaling and leveraging their search campaigns.
 
An important industry resource, Internet Retailer’s Top 500 Guide provides profiles on each of the 500 biggest Web merchants in North America based on annual sales on the web, including corporate strategies and merchandising and marketing tactics. This year the ranking also includes sections for social networking and shopping comparison site affiliations, site search features and functions and mobile commerce applications.

Marketing Opportunities vs. Privacy

Suzy Sandberg:  When I first heard the details of Open Graph, I immediately went into Facebook to turn the feature off.  Facebook went with a pre-checked box to enable the Open Graph feature which requires unchecking to opt out.   We’ve seen this before — a Facebook platform change with privacy implications where the user must seek out and select new privacy settings in the application to undo a new feature.

Open Graph is getting buzz for two reasons:  one is its ability to socialize the internet in a new, unique way.  The other is the emergence of new privacy concerns, of which Facebook has already had its share of in the past.  Are the benefits of Open Graph really worth the positive buzz?  And/or how much of the privacy concerns are just noise?

I think it really depends on your point of view.  On the plus side, the Open Graph plug-in will bring socialization to the web in a way that hasn’t been done before.  The “like” button is often used in Facebook, and its familiarity with users could yield high usage rates making its adoption on websites take off quickly.  Large swaths of people are signing on to FourSquare, Gowalla and other location-based networks to share their info with friends, so Open Graph certainly won’t spook users of those applications.  In fact, sharing their likes online could be considered less intrusive than broadcasting personal info by GPS.  The younger demographic is comfortable with sharing online, so this new application may be quite appealing.

On the privacy side, there are four components of the issue.

• Facebook users who see the identities of their friends listed on a website with the Open Graph plug in for “liking” the content on the page probably believe their identity is being disclosed to the masses.  In actuality, the only people who would see someone’s identity are other people in their network.  Assuming someone is ok with sharing their likes to friends, this isn’t an issue at all.  The majority of users, though, who don’t know anything about iframes and how this all works, may be spooked.  Facebook may get a bad rap because it’s too complex for people to understand. If such an objection goes viral and creates mass buzz as we’ve seen in the past, this program may go the way of Beacon.
• If you don’t want your friends seeing which sites you “Like,” you will have legitimate privacy concerns.  You can always opt out, though.
• Having to opt out is troublesome and the process is cumbersome.  Pre-checked boxes went away from reputable websites years ago because of CAN-SPAM, so Facebook is going against the grain here in terms of using the best industry practices.  I understand that Facebook wants wide adoption, but email marketers wanted big lists too – they ultimately understood and accepted that pre-checked boxes can be perceived as deceptive.
• The most troublesome aspect of Open Graph from a privacy standpoint, and I imagine this is what New York Senator Charles Schumer and Moveon.org will latch on to, is that part of Open Graph entails a “small pilot program” with a few big sites (Yelp and Pandora, for example).  The partners in the pilot program do receive personal information on Facebook users including names, friend lists, interests and likes so that they can personalize the experience for users.  Facebook itself describes this information as public in their blog post explaining the program.  A person can opt out by checking a blue bar that appears at the top of the site, but I have to imagine that many users will not understand the purpose of the bar, meaning that these consumers have therefore not willingly agreed to share their personal information with the businesses in question.

A Boon for Marketers and Consumers Alike

For years and years, catalogers have been sharing data with each other.  (How else did you think that Williams-Sonoma started sending you catalogs after you bought something at Sur La Table?)  And for just as long, there have been marketing databases that essentially profile what kind of marketing you are likely to respond to based on assumptive demographics.  Based on your address and zip code, marketers all over the world can find out tons about you.

So, sharing the kinds of things that you “Like” on Facebook is pretty innocuous. You are clicking on a button that says “Like” and it gets broadcast to your network.  Your assumption of privacy ends at your public declaration of “Like”.

Are there issues with Facebook’s implementation? Sure.  Should it be easier to opt out?  Absolutely.  Should you have to opt in?  Well, I don’t know about that.  You have already made a public declaration of liking something…you are only exposing your data if you engage…the Open Graph isn’t pushed on you.  It doesn’t interrupt you; it only shares information if you actively participate.  Already opted in seems fine here because you must take an explicit action to share.

What is the opportunity?

This is a boon for marketers and consumers alike. Fundamentally, pervasive implementation of social marketing through Facebook’s API gives marketers a wonderful opportunity to personalize and customize their web experience based on explicit declarations of preference. This gives marketers an opportunity to present a unique, personalized experience to customers, even if they’ve never visited before.  This is powerful.

For consumers this is a great opportunity too.  If you have expressed on Facebook that you are a fan of ESPN, College Sports Network, MLB and the NBA, you might see more sports related merchandise when you visit a participating site.  This is great.  It may be a little “Minority Report” for some, but for most folks, allowing merchants and marketers to personalize their pitches to you is highly desirable.  You get to see more of the stuff that you want to see.  The devil is in the details, of course, some marketers will do a better job at this than others. But fundamentally, by allowing marketers a glimpse into what you like before they present to you gives them the opportunity to give you more wheat and less chaff. I think the privacy concerns are overblown.  By engaging with Facebook, you have already made public declarations about your affiliations. And marketers should be able to use information about you that you publicly disclose to serve you better.

For marketers, this is such an amazing opportunity, because you suddenly have deep access to potentially millions of visitors. You will be able to learn more about them, more about how they interact with your brands and how you can deliver them the right offer at the right time.

The big winner here is, of course, Facebook.  If the “Like” button gets deep acceptance across the web, Facebook has harnessed the power of 400 million minds to help them understand the web and how people use it.  That is infinitely more powerful than anything Google can do. Further, with all of these explicit preferences known, Facebook can uniquely target you with salient, relevant ads…this is the real reason for the Open Graph, but the ancillary benefit for marketers to know more about their customers and for customers to get more personalized services from marketers is a real win.

Final Thoughts:  The Importance of Clarity

Chris Paradysz:   The challenge with even the definition of “Privacy” is that its meaning differs for each user.  In Facebook’s case, unlike that other behemoth Google, they are ambiguous and often resort to using industry jargon to describe their practices which users could perceive as arrogant, naïve, or even black hat, the latter of which is what gets privacy advocates and AG’s all cranked up.  They are typically reactive with their policy changes instead of understanding their customer and the legislative rants around them which, unfortunately, is giving them an early and very expensive education.

No one really begrudges Facebook for trying to make money, but they would sure save themselves a lot of headache and goodwill if they’d be more open.  Isn’t shared candor social media’s intent, anyway?

For marketers, Open Graph should be a bonanza.  For consumers who let marketers in on their passions, it should be all good as long as Facebook understands who’s paying their bills and doesn’t corrupt the implicit trust they’ve created with their users.

Just ask MySpace.

OS4 Will Make the iPad Truly “Magical and Revolutionary”

Chris Paradysz:  OS4 will have multi-tasking capabilities.  Now, I love the iPad.  I can be excited about any great technology, but it should fulfill the hope I had back when I blogged about it earlier in the year that it will create an intimacy bond between content and users.

Music, video, words, pictures should no longer be disconnected from touch and feel.  The iPod and iPhone didn’t transform this connection with people (consumers).  With the portability, size and weight of the iPad well-suited to most people’s hands and laps, it can easily move from one position to another and from one person to another.

From a marketing pov, this creates a new experience sensation and viral ability that prior e-readers have failed to deliver.  Within an app or the internet, an advertiser can deliver a rich brand or offer experience, not just ink on “paper”.   With the iAd and technology infrastructure to support it, I have two questions:  1) how soon will it be before Apple starts up an advertising agency; 2) will a new SNL Apple skit be on this Saturday night?

A Must-Have Device You Didn’t Know You Needed

Suzy Sandberg: Just to get this out of the way, YES, the iPad does look like a giant iPod Touch. (iPad owners, I feel your pain on this relentless comment).  And since I can’t strap the iPad to my arm when I go running, I do still need my iPod Touch. And I still need my laptop since the iPad has limitations (no USB for one). I also have/need a cell phone until/unless Verizon ever actually does get the iPhone.

So with four devices (ok, I actually just lied about that…I have a Blackberry, too), where does this newest one, the iPad, fit in my life?

First is that it gets me online quickly, and the speed is lightning fast. Research has shown that the majority of time spent on the mobile web is done in the home, on the couch. I am one of those. The experience of being online on an iPad can’t compare to that of an iPhone or iPod Touch, particularly if you are consuming media. Just because you CAN download a movie or book on an iPhone, does that mean you should?

If you have an iPad you should do your downloads on that device. Some media is so breathtakingly beautiful and awe inspiring that even though I’ve had the iPad just for one week, I couldn’t go back to the small screen for certain things.

In the app department, the current choice is somewhat limited, but I’m optimistic that here is where the iPad is going to hit a home run. There are many apps to be enamored with for the iPhone, though many were developed as workarounds for a clunky web experience on a tiny screen. Since that is definitely not a factor with the iPad, I predict incredible creativity coming out of the app store to serve entertainment needs and many other things I can’t yet visualize.

The iPad fits in my life, so far, because it’s a highly enjoyable experience and perfectly meets the needs of my digital life. Especially when paired with my other four devices.

You and Your Customers Just Got a Whole Lot Closer

Tim Kilroy:  I am a big Apple fan. I use an iPhone. I am writing this on a MacBook Air.  I have never purchased a PC in my life, and I have bought 7 Macs.  And I wasn’t first in line for an iPad!  So what gives?

For me, it was just a failure of imagination.  I didn’t, frankly, understand why I would want an iPad.  It was an iPhone that I could use without my glasses.  Great.  It is a laptop that I can’t do real work on.  Super…that is exactly what I need.  And then, I used it…the magic hit me.

This is truly personal computing that allows for immersive engagement.  Web, mail, video are all at the tip of a finger.  So why is it magic?  Because the computer disappears.  It is just you and whatever you are doing.

What does this mean for marketers?  It means that your presentation layer just got cooler, and more transparent.  The opportunity to create impact and engagement just increased.  Imagine that your interaction with consumers on a computer is like you yelling across 6^th Avenue at your target audience.  They can hear you, and some will even listen closely.  But few will ignore everything else happening in NY to follow you.  With the iPad, you have the opportunity to walk across 6^th Avenue, and sit down with your customer at a Starbucks. It is still noisy, but you can sit across the table from each other and listen.

And that is magic.

More Touch, More Emotion, More Measurement Challenges

 Anthony Avolio: Based on my experience with the iPad thus far, I have three key impact areas for marketers to consider moving forward.

Touch usability.  Marketers must actively consider touch interfaces when planning their designs. Designs with small click targets, extensive use of hovers/rollovers or requiring browser plug-ins don’t create a positive user experience on the iPad. This applies to all online media, including websites, banners and emails. While the iPad is just one device, it’s likely the start of a new mainstream push for touch interfaces. Marketers must insist that their creations function and resonate with consumers on as many screens as possible.

More emotion.  The iPad’s touch interface and minimal design can create a more immersive experience for consumers.  Upon launching an app, the iPad disappears and becomes that app.  Upon opening an email, the iPad becomes that email message. Keyboard and mouse peripherals that typically separate the consumer from content are absent on the iPad, allowing the experience to be more direct, more one-on-one.  Skilled marketers will use this more direct opportunity to delight, enthrall and connect.

Increased splintering of online browsing will continue to create challenges for measurement. In the old days, consumers’ online activity was typically split between two web browsers — one at home and one at work.  Smart phones and now iPads add to the number of devices that a single consumer actively uses to access the Internet, making measurement more challenging. Consumers can now learn about a new product on their work computers, research further on their phones before purchasing it on their tablets while at home.  With online browsing spread across devices and apps, conversion measurement and campaign attribution become increasingly more complicated.

Suitable for Framing

Glenn Lalich:  My first few days of playing around with the iPad were largely app-focused, as I figured that was where the biggest wow factor would be.  And the few retail apps available did not disappoint.  The Gilt for iPad app is elegant, and I found my fingers naturally tapping up beautiful super-sized product photos.  The Gap 1969 Stream app is even more revolutionary, with the iPad acting as a window on some infinite universe of Gap photos, merchandise, stories, videos and social media links. Pretty amazing stuff.

But from a retail perspective, my favorite iPad surprise didn’t come from a download.  It came when I stopped playing around with my apps for a second to check my email.  That’s when I noticed that the retail emails in my inbox looked gorgeous. The size of the iPad display, the hand-held proximity and the glossy screen made many emails akin to high-quality print ads or catalog pages.  Freed from a traditional computer, they were vibrant and alive in my hand.

Not every email I saw was a winner, mind you.  Product grids with a lot of white space can look like meagerly stocked store shelves.  In portrait mode, top-heavy layouts designed for standard preview windows do not fill the entire iPad screen, allowing below-the-fold disclaimers and legalese to move up and steal a bit of the spotlight.  But these are relatively modest adjustments to make, and relatively inexpensive as well.

The iPad just gave email creative a dazzling shot in the arm.  And it didn’t cost marketers a cent.  As much as I hope to see killer retail apps and touch-centric websites in the near future, it’s exciting that the iPad’s “magical” display and interactivity already offers fresh advantages to retailers as is, right out of the box.

Here is the information on where we’ll be:

February 22-24, we will be at eTail West 2010 in Palm Desert, CA. Our booth is #11.

March 2-4, we will be at SMX West in Santa Clara, CA. Our booth is #310.

March 10-12, we are a sponsor at the Spring NEMOA conference in Boston, MA.

March 22-26, we will be at the Search Engine Strategies conference in New York City. Our booth is #215.

As with every conference and exhibition we attend, our focus is clear…to learn more about the industry trends, and to see our clients and business partners. If you are unable to attend any of these shows, we’ll be sure to pass along any insights or important information we learn from each conference.

Safe travels and hope to see you there!

DMNews: Search marketing continues to command the lion’s share of online budgets. How will we see that channel evolve this year?

Chris Paradysz: Consumers have radically improved their search and online sophistication as a result of having less cash but still buying what they need to live, feed and clothe their families, pay their bills, enjoy their passions and manage their health.  Search phrases are more targeted because they know more about how to get what they’re looking for.

DMNews: Does that make it more competitive for marketers?

Chris Paradysz: Definitely. Consumers are only willing to pay for the value they perceive and no more.  If they don’t like what they’re offered, they click away to a place where they can get it at the price they want.  From better targeting at the shopping engines to features like private sale sites, the top retailers are adapting. At the same time the squeeze is on consumers, the search engines have brought enormous changes to their technologies.  With the newly released Google Caffeine, for instance, posts from YouTube, Facebook, Twitter and other social media are getting instant, top billing bringing an even more urgent real-time experience to searchers.

DMNews: How should marketers use database technology to improve their business at a strategic level?

Chris Paradysz: A good example is the national and large regional newspaper businesses. These content providers are rallying together to create their own ad networks and will test bypassing Google and other low CPM advertising outlets to create higher value advertising relationships that result in higher ad rates.  The only way to deliver this and meet the expectation will be to offer refined demographic targeting of their databases.  For their ad clients and agency media buyers to embrace this, advertising performance is all that matters.

DMNews: How can direct marketers implement effective social media strategies in the new year?

Chris Paradysz: This year, and especially holiday, will be the year that social media loses its innocent charm and crosses over into the demand requirements of traditional ROI-based search, display and e-mail campaigns. Social media is not a campaign, and that’s the biggest threat to its purity and ability to drive high-quality traffic for retailers. Particularly for brands with significant recognition, fans are growing at the rate organic search traffic was growing back in 2005. We expect this level of growth to continue through 2010, especially if brands do not compromise the relationships they’ve built with over-zealous marketing.

DMNews: Can you measure social media?

Chris Paradysz: As marketers, we know audience measurement and impact need to be brought into the calculation, but figuring out just how to measure it and what we want to measure will require a different set of analytics. Right now, there’s a bit of a land grab happening for which department owns it so for now, we won’t be able to answer those questions.

DMNews: What is the state of direct mail in 2010?

Chris Paradysz: Segmentation will put the punch back in direct mail economics. No media has the scale and audience reach combined with such targetability. The benefit of it being a legacy media is also helping it survive the privacy turmoil that is brewing on Capitol Hill.  Consumers understand its use and the dramatic increase in opt-in/opt-out opportunities has increased the credibility of the source.  We already know the mail’s power to drive ecommerce and its ability to so finely target and tune an audience. Ultimately, as is always the case, the economics will drive its future.  With the onslaught of new and re-energized businesses in the healthcare industry, for example, there is no replacement of scale for finding this audience.

Note: Chris’ original Marketing Outlook for 2010 post can be found here.

• Will Microsoft-Yahoo be competition for Google?
• Will this be a positive deal for advertisers?
• Will this be a positive deal for consumers?
• What does the combination bring that’s unique?
• What are the challenges of the Microsoft-Yahoo combination?

Below is a lively discussion – with occasional disagreement — regarding this groundbreaking news.

Will Microsoft-Yahoo be competition for Google?

Chris Paradysz:  Absolutely.  They already are.  Look at how distracted Google is.  Bing’s market penetration has already dramatically increased since their re-launch.  $100 million buys a lot of marketshare, and it’s not fading like a bad idea or another Taylor Hicks American Idol winner.  Products being equal, I put my money on companies with the best marketing, not technology, to impact and sustain share growth.  Let’s remember that it’s impressions, eyeballs and consumers that drive the revenues.  Advertisers have the bucks, but the dollars don’t work if people aren’t searching.  I believe in Google and their offerings.  They are spectacular and, so far, a much better solution for advertisers and consumers.  They have both of these two customers in the bullseye so their audience should grow.  The best companies create categories for themselves and redefine the rules.  Look at what Apple did to the mobile phone industry.  Better, check out what Google is attempting to do with their cloud computing solution to rival Microsoft Windows.  I believe in Google, and their success matters a lot to a lot of people.  What’s intriguing about this battle is that Bing, and now Yahoo, is picking at Google’s strengths…their core categories.  At its core, Google is a classified ad business with strength in the categories with the largest budgets.   That’s precisely where Bing’s search engine is focused.   Bing is a threat.  Bing/Yahoo is a more formidable threat.  We just don’t know how much.

Suzy Sandberg:  No.  Both Microsoft and Yahoo have played catch up for years to Google’s innovations.  Some of the innovations have come with a lot of hype (Live Search?  Panama?  There are others…) that not only never made a dent in Google’s market share but gained negative feedback from advertisers.  Years ago, MSN yielded a nice volume of sales from paid search but then they ”fixed it” to “improve it,” and all the sales disappeared.  This has been the pattern with both companies.  Also, Google has strategically aligned themselves with DoubleClick in the hopes of tying display to search marketing which, when and if that happens, will be HUGE.  The fact that Yahoo and Microsoft are both keeping their own display teams and not integrating them in this deal makes me assume they will be playing catch up once again after Google nails down the integration.  In fact, with two display teams/strategies and one search engine, it will be complicated to integrate and even more complicated considering that this is a 10-year deal.

Will this be a positive deal for advertisers?

Chris Paradysz: Yes.  The consolidation of two relatively small competitors will create a much more reachable and targetable audience in both search and display, radically improved customer service for advertisers due to Yahoo’s sale force, and a far better technology platform which plays to Microsoft’s strengths.   Plus, I’m also encouraged that Google will now have very real price competition which should be good for both advertisers and the search engines, too.  In a tough economy, it might just be the match that lights the growth flame.

Suzy Sandberg:  Advertisers will benefit from this deal by having only two search platforms from which to launch their ads (currently all three have unique specs and rules).  The Yahoo sales team, which is staying, is superior to Bing’s which is another plus, and the Bing Ad Center platform is far superior to Yahoo’s, so most of the changes will be positive.  What is unknown is if prices will increase now that there is less competition, and that would be bad.

Will this be a positive deal for consumers?

Chris Paradysz: I think so.  Although it is consolidation, I see it as the combination of two strong brands that have significant marketing dollars to back platform choice.  This will drive demand and likely create much more churn for the search engines, but I think the consumer gets real choice.

Suzy Sandberg:  Yes.  While the Bing search engine has been more hype than substance and the awareness is minimal (except for those in the internet marketing business), among consumers it is a cleaner, more thoughtful search experience than Yahoo’s, so it will be good for consumers.  That said, I do not believe Bing will make any significant inroads in taking market share away from Google now or in the years to come.

What does the combination bring that’s unique?

Chris Paradysz: It brings two premier, well-known and respected brands together that now should be able to bring a real solution and meaningful scale that has eluded both of them.  With general ad budgets rapidly moving to ROI-based, targetable media, display advertising should be the victor.  That bodes well for the rising star, Google, and the current front-runner, Yahoo.

Suzy Sandberg:  For one, Microsoft finally has some market share in search.  Secondly, it’s the first time Google will have a much larger single competitor nipping at their heels. With Google looking to introduce an operating system in the near future, the battle between these two companies will continue to escalate.

What are the challenges of the Microsoft-Yahoo combination?

Chris Paradysz:  Unraveling old deals and creating new ones worry me a lot.  Getting Bing’s technology platform integrated quickly is crucial so advertisers find success so they keep their dollars invested.  Privacy.  A meddling government.  Uniting the management teams under a single mission.  Carol Bartz has had great success elsewhere.  This is her deal, and keeping the troops aligned will be important or this will quickly fall apart.

Suzy Sandberg:  In lieu of a formidable search engine competitor stepping in, there will be questions about consolidation in the industry and monopoly.  There will also be more layoffs at both companies.

Chris Paradysz is CEO and Suzy Sandberg is President of PM Digital.