R.I.P Ms. Winehouse

I  got familiar with Amy Winehouse via blogs back in 07, way before she made her U.S. debut. There was something about her that I was drawn to. From watching her videos on YouTube to her interviews she came of so innocent, relatable, a little crazy, but bottomline line she was just genuine. Yes, she was singing blues and soul music, but it was not  gimmicky, it was just pure talent. It wasn't too long before "Rehab" was such  a big track dominating urban and pop radio.

First semester in college  'Back to Black' was on constant replay, next to M.IA.'s 'Kala.'  I think I became an even bigger Winehouse fan when my friend gave me the 'Frank' album. For me, songs evoke certain memories, and without a doubt 'Frank' was the soundtrack  to my first semester of college. Despite her personal woes, I really hope that she will be remembered for her timeless classics and not the drunken performances, and antics. Addiction is a disease, let us not forget that.

I was in the fitting room yesterday, and the sales girl announced that Amy Winehouse died and  everyone just carried about their business. I checked my Twitter to verify but I still could not believe it. It was like just the other day she was in St.Lucia, going through detox making progress. There was that Belgrade slip up but still I really thought her career would out live most of these talentless "artists" currently saturating the airwaves. Even though I could not relate to some of her songs I was able to connect with her music because I was actually able to feel what she was going through. It was like her pain was tangible. The last time I was this affected by an artists' death was  Aaliyah's untimely passing... I'll stop rambling but seriously this is just deeply saddening. I hope they release the material she worked on in St. Lucia, it was a reggae inspired sound.

R.I.P. Amy Jade Winehouse. May your music live on forever.

I leave you with some of my favorite works from 'Frank' and 'Back to Black' in no particular order:

(Love that Nas Made You Look sample)

                                           Timeless music.

MasterCard X Your City

I saw overnight safari sleepover at the Bronx Zoo, and was immediately sold. That's the animal lover in me (when I was younger, I was the proud parent of a Bengal Tiger at the zoo. Don't judge me). Anywho MasterCard holders out there, pay attention!

MasterCard is bringing it's Priceless campaign to life. The brand is launching a new intiative, Priceless Cities giving cosumers exclusive offerings such as V.I.P. treatment at the Red Rooster restuarant in Harlem, access to Batter's Eye View a new section at Yankees Stadium, and my favorite an overnight safari at the Bronx Zoo. NYC will be the first city to be featured in this campaign.

Cheryl Guerin, SVP of marketing comments that Priceless Cities is a “a real evolution of our brand promise,” and that MasterCard will continue efforts of emotional differentiation with their "Priceless" ads. Supporting this intiatve will be a series of social stunts, like placing Yankees stadium seats all around the city.

The campaign will advertise on radio, print, online, transit and outdoor platforms.

Source

MOI / Park Wrap-Up

This video is the perfect wrap-up for this Marketing on the Internet course, and everything else I've been learning in Park for the past four years. It's based on the book Socialnomics by Erik Qualman.

LINKS OF THE WEEK ...Hiatus

Today is the LAST DAY of classes. It's not the last for this blog though...yea I know I haven't been updating as regularly but life calls. The journey will continue.... -A

As usual, here are the links of the week:

Facebook pay users to watch ads

Al Qaeda confirms Osama's death, vows revenge

Michelle Obama & Beyonce surprise students and dougies for 'Let's Move' health initiative

Best cars of the New York Auto show

Case Study 3: Starbucks X Foursquare

In the 4th quarter of 2010, Nielsen reported that there are twenty eight percent of smart phone users in the U.S. mobile market. Of the different categories of applications, location based apps saw a rise in 2010 (tripling users from 12.3 million in 2009 to 33.2 million in 2010) with men as the predominant users. Marketers are noticing the potential for growth on this platform and are utilizing apps like Foursquare, Gowalla, SCVNGR to integrate in their mobile strategy.

Starbucks jumped on the geo based app train, using it twice in the last year. In the past the brand teamed up with Foursquare to award their most loyal customers. Last summer, brand loyal consumers, affectionately called mayors on Foursquare (people with the most check-ins) had the opportunity to unlock the Mayor Offer which offered money saving perks, like $1 off frappacinos.

Earlier this year Starbucks launched the celebration of it’s 40th anniversary by rolling out new products, a new in store look, and mobile strategy to reward consumers. Starbucks partnered with Foursquare again to extend brand promotions on the mobile platform. Users had the chance to win a $40 gift card if they unlocked the “Tribute Badge.”  There were 500 gift cards available nationwide up for grabs.  According to Technorati blogger, Steve Holt the brand got it wrong. He checked in but did not get the Tribute Badge. Curious to know if any other customers received the badge at his location, he asked the barista. He was met with a blank stare. None of Starbucks’ employees, or their brand ambassadors as they are known on the corporate level, did not know about the Foursquare promotion. Holt felt like this made their social media initiative look lame

The main target for this campaign are brand loyal customers. Terry Davenport, svp of marketing built the mobile strategy with these tech savvy, brand loyals in mind. He comments on the brand’s position in the digital and social platforms:
 

We’ve become a leader in social media and in the digital space, and with our Starbucks Rewards program we continue to grow in how we engage with customers. We have a million registered cardholders. So we have an ongoing conversation with consumers in social media and the digital space and with our cardholders.

 
The brand’s efforts in the mobile and digital realm have not gone un noted. In 2010 Starbucks won the Mobile Marketer of the year award.

Sources:
http://technorati.com/technology/article/a-social-media-house-of-cards/
http://mashable.com/2011/03/10/starbucks-foursquare/
http://blog.fahlgrenadvertising.com/2011/02/the-rise-of-location-based-applications/

It will cost 1mil to place ad in Oprah series finale

Oprah's series finale will air on May 25. The finale is expected to draw in  20 million viewers or more. "Oprah" is charging advertisers 1 million for a 30 second spot making it the most expensive ratecard asking price in daytime history.

The most expensive price was NBC's "Friends" finale, with 2 million for a 30 second spot.

It is truly the end of an era. I remember I used to come home from school and tune in after my TRL, Say What Karaoke  line-up. Oprah brought a lot of pressing  issues to the forefront to me, as a 13 year old my school did not teach me about child rebel soldiers, diamond conflict in Sierra Leone, educatonal disparities in America and abroad. I can truly credit this show for enhancing my knowledge base as a youngin. Oprah if you're reading this THANK YOU!

-AV

Links of the Week

Meet the man behind Victoria Secret's PINK brand 

Hatchback of the Future: Mercedes-Benz Concept A-Class

The Beginning of the Google Takeover: Google  gets Green Lit from the Justice Department

How to improve international SEO strategy

Ivory Coast Human Rights violations

Save the Dates: HBO announces new summer line up

My (and probably yours too) favorite HBO shows are backk!

Leading the line-up is True Blood, which is slated for a premiere date of June 26. Many are already dubbing it as the "season of the witch," this season promises to be full of sorcery and the sexiest one yet.

After  a 2 year hiatus, Larry and the gang are back! The eight season of Curb you Enthusiasm will premiere  on July 10.

And finally, we'll be saying good bye to our Queens boys from Entourage. Reportedly there will be a big screen adaption of the series. The final season will premiere on July 24.

Hopefully this season of TB is better than last. As for Entourage, taking the Sex and the City route, I'm skeptical, but I guess that all depends on how season 8 ends...we'll see.

Movie Rentals on Facebook

You're a marketer looking for new channels of distribution,  so where oh where do you turn? The social networking site that every other advertiser is penetrating of course....Facebook is what TV was for advertisers back in the old days (just kidding). Warner Bros announced that the "Dark Knight" and select movies will be available for streaming on the social media site, a feature that will only be available to consumers in the U.S.

Rentals will cost 30 Facebook credits or $3 for a two day viewing window. Thomas Gewecke, President of Warner Bros. Digital Distribution, comments on the company's new practice:  making our films available through Facebook is a natural extension of our digital-distribution efforts. It gives consumers a simple, convenient way to access and enjoy our films through the world's largest social network."

What does this mean for Netflix? Let's talk stats. Netflix stock fell by 20% over the past few weeks, possibly resulting from Amazon launching its own subscription and TV-streaming service. If other studios follow in Warner Bros. footsteps this can be diastrous for Netflix. Everyone wants in on this streaming business. Dare I even mention that it can possible make the sad exit from the game like BlockBuster? Nah, let's not get ahead of ourseleves here.

Sorry as an individual  who belongs  in the group that marketers so affectionately coin as "early adopters" or "latest and greatest" I want no part in this. I'm a movie-nista, more so than my love for  film itself is the movie watching experience. I love a booming surround system, the 20X40 Regal screen. It's all about the experience. Watching  quality movies on Facebook? I'll pass on that one

-AV

 

Case Study 2 : Forever Fradulent

Forever 21  is the store you go to when you need  last minute accessories to enhance an outfit, for some people it’s their go to store for party clothes. The retailer provides chic designer-esque affordable clothing, for the girl that's not trying to break bank. Throughout my circle of friends it’s known that shopping at Forever 21 is for a one time wear, because the clothes are not high quality or durable.While the store has become a go to store for young women, the company has become more of a go to trial store. Over the past several years Forever 21 has been inundated with legal proceedings from  accusations of copyright infringement to   sweatshop labor.

Copyright Infringement

Store founders Do Won and Jin Sook Chang (commonly referred to as Mr and Mrs. Chang) has been trying to sew their legal woes since 2007. Within the past four years they have had to deal with over fifty law-suits of copyright infringement from well known high fashion brands  like Diane Von Furstenberg  to young up incoming designers like Trovata. In 2007  Diane von Furstenburg filed a copyright infringement law suit against the company claiming that the brand willfully copied the design,  pattern, and  measurement of her Cerisier and Aubrey smock dresses.

  

(Diane von Furstenberg dresses on the left; Forever 21 on the right) 

U.S. copyright laws protect only prints and graphics not the design itself, making most cases cases hard to prove. The company settled out of court for an undisclosed amount with well recognized brands like Anna Sui, Diane von Furstenberg and Anthropologie. For me this implicates guilt. The company blatantly implements fraudulent practices and goes so far as to pay off lesser known brands for appropriating their designs. For instance designer Victoria Johnson noticed that her skirt which retails for $175 at Barney’s was being sold in Forever 21 for less than $18  (Bloomberg BusinessWeek, 2011). Johnson soon learned that the company had a policy in stored for these scenarios. The Chang family offered to pay her ten percent of the $40,000 worth of the skirts they said they sold. She declined and they made a counter offer of 9,000 which she then accepted (Berfield, 2011). Fashion copyright law expert Susan Scaifidi believes that Forever 21 treats copyright infringement as part of their business model, she comments: "Illegal copying has been incorporated into their business model. But it's not necessarily a terrible result for designers who do receive payment."

Forever 21 shirts on top row; Travata on bottom; Odell, 2009

 

The company has managed to avoid going to trial until recently.Travata, a local designer from Newport Beach  accused Forever 21 for copying its unique button placements, decorative stitching, and a tag that included one of the founders' names. In May 2009, Mrs. Chang was forced to testify in the U.S. District Court in Santa Ana. Her testimonial was very telling about her alleged involvement in the company’s operations. Trovata's litigation team learned that the company’s biggest suppliers One Clothing is owned by one of Mr. Chang’s private investment firms. Ms. Chang maintains that she has limited involvement and knowledge of the sales, shareholders etc. Her work is reduced to to selecting apparel that her team of 6 or 7 buyers present to her. 

The company is taking appropriate measures to avoid future legal woes. Jin Woo Chang is putting together a design team to create original clothing for Forever 21. On the other hand, The Council of Fashion Designers of America has been pressuring Congress to pass legislation on the Design Piracy Prohibition Act. Fashion is one of the few creative commerce that is not fully protected by U.S. copyright law.The bill is spearheaded by CFDA president, Diane von Furstenberg. The act gives designers three years of copyright protection for “original” designs if they register their designs within the first three months of the first time the design has been presented to the public. If infringement is found, designers can seek damages of the higher of up to $250,000 per infringement, or $5 per copy. The infringing apparel may also be seized and destroyed (Weisburd Steven I, 2009).

Critics believe that the act would stifle independent designers while giving big fashion houses a monopoly in the industry. Establishing copyright laws in fashion is a delicate matter. Many argue that designers create pieces through inspiration from their peers, other art forms etc. Despite the source of inspiration, there is a blurry line between gathering inspiration from a designer and flat out creating a knock off. As a college student who does not have a high disposable income my innate response is to be against  this proposed legislation. Consider if the  bill is passed, the quality of merchandise in retail stores like H&M, Zara, Banana Republic and even Forever 21 will suffer.The inspired Alexander Wang boyfriend blazer sold by Bebe will no longer be available to me.  What will the everyday people who cannot afford to spend $349 on  a blazer wear?

Ethical Dilemmas

Forever 21 not only blatantly rip off designers but they have  come under fire for unethical employment practices. The company has been brought up in court several time for accusations of  running sweat shops both domestic and internationally. U.S. factory workers launched a national boycott in 2001 protesting in front of stores across  the country and even outside the Changs’ home. Factory worker Guadalupe Hernandez explains her work conditions: “$4 per hour working 10 hours a day 6 days a week in a factory with no running water and no bathroom.  A lot of our factories were dirty and unsafe, with rats and cockroaches running around."  The protest continued for three years, during this time Forever 21 sued workers for defamation. Several manufactures (subcontracted) paid the some of the women a sum of 175,000. In 2004 the Changs finally decided on an out of court settlement with their frustrated employees. Some of the women were featured in the Emmy award winning documentary Made in LA which details the deplorable conditions they endured working for the company. The brand has faced sweat shop labor accusation overseas as well but manages to avoid liability by placing the blame on third party manufacturers.

Every time I walk into a Forever 21 store I get an uncomfortable feeling (prior to researching the company’s practices), it’s a mixture of annoyance and embarrassment. I look around and see a knock off the Dolce Vita boots I dropped a dime on selling for $40. A part of me is slightly embarrassed because I spent too much on boots that I could have gotten less cheaper, and the other part of me is highly annoyed because the boots I’m wearing to the untrained eye looks like Forever 21 boots. I can only imagine how designers  feel. I'm not sure they feel comforted by the old adage imitation is the greatest form of flattery. While I understand that these big fashion houses are fighting for their intellectual property to remain in tact, they must also realize that Forever 21 is catering to a different market segment. I doubt that their sales are being severely impacted by a retailer whose target audience is probably not in the same income bracket as their own audience.I believe lesser known brands have a lot more to lose. At the end of it all in the world of art, and the creative license, one's man loss cannot be rightfully compared to another's. As a consumer the proposed DPPA act makes me uneasy because it threatens me directly- my clothing choices and the  manner in which I choose to express myself. It seems unlikely that this bill will pass, so as of right now I'll relish in my shopping trips to Zara and Banana Republic. Sorry DVF, but I'm a frugal college student.

Sources:

Berfield, S. (2011, January 20). Forever 21's Fast (and Loose) Fashion Empire. Retrieved February 27, 2011, from Bloomberg BusinessWeek: http://www.businessweek.com/magazine/content/11_05/b4213090559511.htm

Odell, A. (2009, April 13). Forever 21’s Ability to Copy Designer Clothes Could Be in Jeopardy. Retrieved March 03, 2011, from New York Fashion : http://nymag.com/daily/fashion/2009/04/forever_21s_ability_to_copy_de.html

Province, D. (2009, September 8). Watch Out H&M – the CFDA Want Their Designs Back . Retrieved February 27, 2011, from The Innovative Fashion Council Blog: http://ifcsf.blogspot.com/2009/09/watch-out-h-cfda-want-their-designs.html

Weisburd Steven I, A. R. (2009, 20 January). The Design Piracy Prohibition Act. Retrieved March 3, 2011, from The New York Law Journal: http://www.dicksteinshapiro.com/files/upload/NYLJ_Design%20Piracy.pdf

ANGR X Chipotle

I love food, and  I LOVE "free." On most occasions food just taste sooo much better when it's free. Fact. If you like free and you like Mexican take-out,  then take advantage of NBC and Chipotles' latest partnership.

NBC's new series America's Next Great Restaurant is launching a  promotion with Tex-Mex franchise Chipotle. The network is utilizing the show's Facebook page to launch a buy one get one free deal in exchange for watching the show's promo. The promotion ends on March 7.

ANGR puts 21 contestants against each other, as a panel of esteemed food connoisseurs determines which restaurant has the best concept. The cliche reality show competition set up. According to an NBC rep the winner gets  to “fully savor his/her great American dream of launching his/her own restaurant chain.”Chipotle founder and co-CEO Steve Ells is one of the four celebrity judges appearing on the series.The series will premiere on March 6.

 In tandem with NBC's promotion, Chipotle is also running an in-store texting promotion offering the chance for 1,000 lucky customers to get a catered burrito party.  All you have to do is text "ANGR" at any Chipotle location and  have the chance to win a fiesta for you and the homies.

This is Chipotle's latest effort taking the social media approach. In the past, their cause campaign "No Junk" urged consumers to forward their spam emails to their account. For every 100,000 spam messages received, Chipotle donated $10,000 to Lunch Box,a non profit organization providing resources to help create healthier food programs in schools. 

I'm hoping ANGR limits the product placement for Chipotle... ohhhh wishful thinking... since that is not possible with Ells being a judge. I love brand partnerships,  however this would've been the sweetest and most beneficial partnership to yours truly if it was Qdoba (yes I am biased).

 -AV

Source

Facebook's Share button is dead

Facebook released an update that changes the functionality of the “Like” button to that of the “Share” button. Now after clicking the new Like button, a full story with a headline, blurb and thumbnail will be posted to your wall. You’ll also have the option to comment in the story link. With the old Like button the story would appear only in ‘recent activity, going unnoticed by users.  

Facebook spokeswoman, Malorie Lucich comments that Like is the “recommended solution moving forward,”  but the company will continue to support the Share button.

What does change means for users? For publishers this can signify increased traffic to their websites, for non commercial Facebook users this change may not go over well. I think users will be more hesitant to “like” certain posts  (content is shared without warning) as they can potentially spam their friends' newsfeed with repeated “Likes.”

What say you, does this change what you “Like” on Facebook?

-AV

Source

Intresting Facts

20 unusual ways to use vodka. I probably won't recommend top shelf for any of these, but I'm quite curious about a shampoo and vodka wash.If you try it, let me know how it turns out!


-AV

The Drunk Diet

Ladies and Gents get familiar with Luc Carl, a distance runner, bar manager, rocker,  personal trainer, semi pro-bowler, the man behind the "Drunk Diet." Luc 's Drunk Diet has been getting a lot of buzz lately, thanks to his girlfriend Stefani Germonatta aka Lady Gaga. In a recent interview the singer credits her physique to the following:

 I am on the drunk diet. I live my life as I want to, and creatively. I like to drink whiskey and stuff while I am working.The deal is, I've got to work out every day, and I work out hungover if I am hungover. And it's about the cross-training and  keeping yourself inspired. I have to say, I do a ton of yoga.

Luc's memoir comes out in 2012, and details his goal to lose 40 pounds without giving up his hard partying ways. Here's a sample of what you're in store for:
http://thedrunkdiet.com/category/drinking/

I guess everyone subscribes to a different "drunk diet."  I like to  keep my whiskey and treadmill separate, but to each his own. Try at your own risk

-AV

Sound Off: PepsiCo...

#thatawkardmomentwhen you and your friends are having a deep intellectual conversation and the topic changes to self esteem, race and the role that media plays. Individual self awareness vs. advertising messaging. #storyofmylife

It’s uncomfortable for me because I’m the aspiring advertiser in the room filled with sociology, and chem majors who cast my profession off as evil.I’ve always taken the stance that the responsibility for the way in which we think, the foundation of our beliefs is 50/50. 50 percent lies with societal factors (media) and the other 50 comes from our familial foundation. My friends rebut that it’s  more like 70/30 or 90/10. I get it, young women are very impressionable, and I’ll be lying if I didn’t acknowledge that at the very core, advertising messages are responsible for the way in which we view race, standards of beauty, sexuality etc.  I’ll stop right here and  spare you of all the societal and historical implications. This is not one of my politics papers.

Pepsi has been a reference point for these conversations lately. First it was their Pepsi Max “Love Hurts” SuperBowl spot, now it’s the Diet Pepsi Skinny Can.With all this hoopla, I hope this at least drives their sales. 

After the “Love Hurts” spot ran during Superbowl I received an influx of texts and fb messages asking for my take on the spot. Was it rascist? Was I offended? Do I even care?

I youtubed the spot, I chuckled. It wasn’t knee slapping funny but it was funny.  I do realize there was a reason to be offended by this commercial (pervading stereotypes). It’s a universal story nagging woman keeps her lazy husband in check; this commercial could have been done with a Asian or white couple and to me it would still have the same impact. It’s your choice to be offended; the racial overtones are what they are. This is very tame in comparison to things I have seen on air. Trust me, I’ve seen some pretty questionable commercials (KFC).

Pepsi presented the new slim can during Fashion Week. Pepsi’s Chief Marketing Officer, Jill Beraud announced: "Our slim, attractive new can is the perfect complement to today's most stylish looks, and we're excited to throw its coming-out party during the biggest celebration of innovative design in the world." In addition to celebrating “beautiful, confident women” the brand is collaborating with 10 fashion boutiques, providing them with a custom “Skinny Can Fridge.” The National Disorder Association slammed Pepsi saying that it takes offense, and the company’s comments are thoughtless and irresponsible: "Pepsi should be ashamed for declaring that skinny is to be celebrated.” The cans hit shelves this March.

Had the brand launch not partner with Mercedes-Benz Fashion Week I doubt that there would have been this much controversy surrounding the skinny can. Nowadays restaurants boast that they serve small portions, to look out for your health.Isn’t Pepsi taking the same approach minus the Fashion Week endorsement. Seems to me they were trying to jump on the fit, healthy craze. Fashion Week perfectly aligns with the brand image the skinny can is trying to create. As with all brand partnerships, you assume the other partners baggage, and high fashion comes with  A LOT of baggage. I'm sure the CMO and the good folks at PepsiCo anticipated this backlash, and they probably have something in the works to combat this right? No? Ok then wishful thinking.

Anyway, what say you? Are you offended by any of these spots?

 

Advertiser of the month goes toooooo PepsiCo…YOU WIN 1)you’ve successfully manged to gain my attention 2) I may consider trying Pepsi Max,  just kidding …I prefer Coca-Cola ;) 

Source:

http://www.pepsico.com/PressRelease/Diet-Pepsi-Debuts-its-Sleek-New-Look-at-Mercedes-Benz-Fashion-Week02082011.html

iPad's New Sub deal

Apple announced that it will enable subscriptions for print, game, and music platforms. However there will be tight controls on pricing, customer data, as well as a 30% cut of revenue. Publishers can now sell subscriptions on their respective websites, keeping 100% of revenue, and collect consumer data. Sounds good, but the catch is when a subscription originates from the itunes App store, Apple is entitled to 30% of the profit. It gets better, Apple requires publishers to offer their subscriptions to iTunes at the same price or lower than elsewhere. Coincidentally, publishers are seeing much more generous terms from Google’s Android platform. Since Apple’s announcement only Rupert Murdoch’s The Daily has opted in for this subscription plan.   

In the past many magazines opted to steer clear of Apple’s ipad subscription system, which kept publishers in the dark about their own subscribers. Apple will not tell publishers who is subscribing to the app store unless a consumer specifically “allow” the brand to do so when they are prompted to share their information.

It will be interesting to see how this situation pans out, whether publishers will opt to stay with the #1 tablet platform in the market, or join the Google wave

Spirit Wars : Belve vs. Ciroc

Move over Diddy there's a new vodka poster boy in town! Belvedere tapped R&B singer Usher to be the face off their new social-cause campaign. The company's partnership with the R&B sensation comes through a program called (Product) Red where brands put a special seal on their product and donate half of their profits to six African nations to fund HIV/AIDS therapy, treatment and support programs.

There is no denying that hip-hop and premium liquor are in a blissful matrimony from name drops in songs to blatant placement in music videos.In some cases the relationship extends beyond product endorsement. For example when Circoc partnered with hip-hop mogul Sean "Diddy" Combs in 2007 he has become such a key factor in the brand's identity his role has shifted to a brand manager.

Usher's role with Belvedere will not be similar to that of the Diddy/ Ciroc relationship. President of Belvedere, Charles Gibbs states: "I don't want to tie the marketing of Belvedere through one individual because I don't think it's the way brands are built in the long term, I believe we need to be talking to a diverse group of people."

The partnership kicks off at a pre-Grammy bash where Usher will perform at an invite only concert to unveil the special-edition Red bottles which carries the message "Helps Saves Lives." The bottles will hit shelves this summer.

When you're making those summer cocktails, or gathering around the pool with friends, buy Belve! It's a win-win situation, you help fund HIV/AIDS research and feel good in the process. It just might be the best 30 bucks you ever spent.

Source: http://adage.com/article?article_id=148786

LinkedIn Case Study

LinkedIn : Relationships Matter

Background

LinkedIn is a social network that allows users to connect with other professionals in their field.  Users can seek recommendations from past employees, network with other professionals in their industry, follow companies, and gain exposure to professional industry related events. It is the ultimate platform to brand oneself in the professional world. Rob Hoffman founded LinkedIn.com in 2003 with four other colleagues, Allen Blue, Jean-Luc Vaillant, Eric Ly, and Konstantin Guericke. The site launched May 5^th 2003, and by the end of the year there was about 81,000 members and 14 employees. A year later the site saw growth amassing 1.6 members, with half of them being  international. Present day LinkedIn has an estimated 90 million users, with numbers steadily growing. As a company emerging from web 2.0, LinkedIn is built on the foundation of wikinomics principles. Also it has managed to generate revenue by a subscription based service, a practice basically unheard of in this new generation of web based services where everything is practically free for users. LinkedIn has emerged from the clutter of other social networking sites as a key player in the new web 2.0 business models. 

Strategies

LinkedIn takes a mass customization approach with users. Depending on the industry of current employment, the site will recommend companies for users to follow dependent on their areas of interest. For instance on my basic account I  held several internship positions with media companies and indicated that my main areas of interest are marketing and advertising; the site suggests “companies you may want to follow" like MediaVest. For example on my page summary I listed that I worked on a Microsoft account; Microsoft and other brands I listed were some suggestions of companies to follow.

Principles of Wikinomics

The site employs the wikinomics principles of sharing and acting globally. A key principle of this social networking site is community, and establishing connections that can turn into business. LinkedIn made several design changes in their web layout that facilitates sharing with connections.

The site added features to broaden its reach across the web including adding a deeper twitter integration, opening up an API, providing a plugin with Microsoft Outlook and enhancing sharing options. The twitter integration allows users to tweet from the platform and pull tweets into the network using a hashtag. So far over one million users have opted to use the twitter integration since the date of its initial rollout on the site (Rao, 2010). A new feature has been added to recommend new people to follow based on one’s LinkedIn connections.

LinkedIn also upgraded its sharing feature with outside sources. Now when users share a news article, the site will allow members to customize the excerpt of the new article they want to post. The company is looking to penetrate all available media via enhancing  sharing options. CEO Jeff Weiner says that the company will implant a product strategy bringing LinkedIn to any sites or platforms that people may use in their professional life (Rao, 2010).

The company is seeing fast growth in international markets with nations like the Netherlands and India expanding rapidly. The member base in the Netherlands is one of the most active and engaged with the highest number per capita outside of the U.S. (Wauter, 2010). Eugenie van Wiechen helmer of LinkedIn, Netherlands summarizes the companies main goals for going Dutch: “By creating programs and partnerships to raise awareness and engagement with LinkedIn in the Netherlands, I believe we can help Dutch professionals succeed in the new decade and beyond and put them on a path to business and career opportunities that otherwise may pass them by.” Wiechen states that the long term focus is establishing local partnerships and ramp up general operations (Eugenie van Wiechen Blog, 2010).

 India has one of the fastest economies growing globally. It has 3.5 million users (more than their UK based membership) with 70,000 new users a week.  LinkedIn set up operations in Mumbai in 2009, CEO Jeff Weiner cites that half of the company’s membership is international with LinkedIn seeing the fastest rate of adoption in India. The company’s main focus is to form strategic partnerships with media organizations, and distribution channels. The hope is to gain more users and promote the use of the platform by third party developers (Rao, 2009).

Business Model

LinkedIn targets the niche segment of affluent professionals.  The company has managed to generate substantial revenue based on a three pronged revenue model:

1. Upgraded Accounts: Business, Business Plus and Pro Accounts provide extra features, including thorough lists of who's searched for you and your company
2. Hiring services
3. Advertising comparable to the Wall Street Journal Demographic (Crum, 2009).

Though some of the features on LinkedIn are free, the site was designed on a subscriptions based model. LinkedIn cofounder, Konstantin Geuricke elaborates what differentiates his company from Facebook and other social networking sites: “We’re here to build a business, not to create a something cool. Myspace and Facebook have done really well. And I think they can monetize what they have built, probably by adding in more e-commere. But I think the opportunity on the business side is ultimately larger” (How LinkedIn Broke Through, 2006). The site uses a four tier subscription based model: business, business plus, executive, and pro. The business account costs 25 dollars a month, business plus 50 dollars per month, the executive 100 dollars per month, and pro account with 500 dollars a month. Opportunities to reach a greater group of people via inmail and searches increases with the level of service.  The company has not released any numbers of what percent of their 55 million users pay to use their subscription based service. In 2005, it was estimated that 4.5 million users subscribed to the pro account, present day that company has not released any numbers of what percent of their 90 million subscribers use this service. 

In addition to a subscription based business model, and recruitment solutions,  LinkedIn generates revenue through advertising. The site has great demand from advertisers because of the users’ demographics. Generally social networking sites have a hard time selling ads for more than $1/CPM  however LinkedIn’s display ads starts at $30/CPM  going to $76 CPM. The site’s audience demographics are comparable to that of the Wall Street Journal with the average age of 41 with a household income of it’s members at 110,000 (Schonfeld, 2008). According to CEO Jeff Weiner the site sees an increase of 50 percent in advertising sales year to year (Carlson, 2009).

           

It is difficult to make a recommendation on how to generate revenue on subscription based services since these numbers are unknown. Despite unavailable figures, LinkedIn ascribes to a business model that is profitable and seems to be working in their favor thus far. In this age of web 2.0 where everything from networking sites (facebook, twitter and myspace) and service are expected to be free, LinkedIn managed to find a successful way to monetize their business through subscription fees.

 The price premiums users (mainly companies and recruiters) pay for this service signals that they are receiving quality service and significant results. Quality service and reliability are two favorable associations consumers will start to build with the LinkedIn brand. From a strictly marketing standpoint when consumers pay for services especially on the caliber of service LinkedIn delivers, this is a good way to continue to establish brand equity with current and prospective users. As with most social networking sites providing service  I recommend that the company employs different techniques that will protect the privacy of their users.   

Works Cited

Carlson,  Nicholas  “LinkedIn: Still Profitable with Ad Revenue up 50%” 25 Aug 2009.

Retrieved on 27 Jan 2011 http://www.businessinsider.com/linkedin-still-profitable-with-ad-revenues-up-50-2009-8

Crum, Cris “LinkedIn Stands Out in Terms of Revenue” 6 Mar 2010.

http://www.webpronews.com/topnews/2009/03/06/linkedin-stands-out-in-terms-of-revenue

How LinkedIn Broke Through . 10 Apr 2006. Bloomberg  Businessweek

http://www.businessweek.com/technology/content/apr2006/tc20060410_185842.  htm

Rao, Leena “LinkedIn Tops 70 Million Users; Includes Over One Million Company

Profiles” 2010 http://techcrunch.com/2010/06/20/linkedin-tops-70-million-users-

includes-over-one-million-company-profiles/

Schonfeld, Erick “LinkedIn to Launch its own Ad Network” 14 Sep 08. Retrieved on 27

Jan 11. http://techcrunch.com/2008/09/14/linkedin-to-launch-its-own-ad-network/

Wauters Robin “LinkedIn opens first office in mainland Europe, based in Amsterdam” 6

Jan 2010 http://eu.techcrunch.com/2010/01/06/linkedin-opens-first-office-in-          mainland-europe-based-in-amsterdam/

van Wiechen Eugenie  Professional Networking is very Dutch. LinkedIn Blog. 5 Jan

2010. Retrieved on 27 Jan 2010. http://blog.linkedin.com/tag/linkedin-netherlands/

New

This blog started as a result of my Marketing on the Internet class. I'm new to the blogging world. In addition to the required case studies I have to post for class, I'll cover every and anything that's of interest to me (that's  A LOT..  soccer, music, food, nightlife, travel etc). Let's gooo!

I'll  leave you with 2 of my favorite ads from 2010!

-AV