Saturday, March 31, 2012

Behind Every Harassed Child? A Whole Lot of Clueless Adults

‘Bully,’ a Documentary by Lee Hirsch

“Bully,” Lee Hirsch’s moving and troubling documentary about the misery some children inflict upon others, arrives at a moment when bullying, long tolerated as a fact of life, is being redefined as a social problem. “Just kids being kids” can no longer be an acceptable response to the kind of sustained physical and emotional abuse that damages the lives of young people whose only sin is appearing weak or weird to their peers.

A Talk With Lee Hirsch

Lee Hirsch, the director of “Bully,” spoke about his film when it screened during the 2011 Tribeca Film Festival (and, at that time, was called “The Bully Project.”)

And while the film focuses on the specific struggles of five families in four states, it is also about — and part of — the emergence of a movement. It documents a shift in consciousness of the kind that occurs when isolated, oppressed individuals discover that they are not alone and begin the difficult work of altering intolerable conditions widely regarded as normal.

The feeling of aloneness is one of the most painful consequences of bullying. It is also, in some ways, a cause of it, since it is almost always socially isolated children (the new kid, the fat kid, the gay kid, the strange kid) who are singled out for mistreatment. For some reason — for any number of reasons that hover unspoken around the edges of Mr. Hirsch’s inquiry — adults often fail to protect their vulnerable charges.

Alex, a 14-year-old in Sioux City, Iowa, whose daily routine includes being teased, humiliated and assaulted (especially on the school bus), cannot bear to tell his parents what is going on. He even sticks up for his tormenters, who he says are “just messing around” when they stab him with pencils and call him vile names.

“If not for them, what friends do I have?” he asks his distraught, confused mother.

It’s a heartbreaking moment. Equally sad — and also infuriating and painfully revealing — is a scene in which an assistant principal at Alex’s middle school tries to settle a conflict between two boys who apparently had been fighting at recess. When she insists that they shake hands, one eagerly obliges, with a smile and an apology. The other sullenly resists, and as she scolds him for his noncooperation (letting his antagonist go), it becomes clear that this boy is the victim, and that the assistant principal’s rushed attempt to be fair is in fact perpetuating a terrible and continuing injustice.

Later, after this same well-meaning, clueless educator has similarly mishandled a meeting with Alex’s parents — showing them pictures of her grandchildren; chirpily insisting that the bus where Alex has been terrorized is “good as gold” — Alex’s mother says “she politicianed us.”

There is more “politicianing” on display in “Bully” than actual bullying, though Mr. Hirsch’s camera does capture a few horrifying episodes (one of them so alarming that he shared it with parents and school officials). In spite of its title, the film is really about the victims, their parents and the powerful grown-ups who let them down.

A school superintendent in Georgia denies that bullying is a big problem in her district, in spite of the suicide of Tyler Long, a 17-year-old student who took his life after enduring years of harassment and ostracism. A sheriff in Yazoo County, Miss., tallies, with dry, bureaucratic relish, the 45 felony counts faced by Ja’Meya Jackson, a 14-year-old girl who pulled out a gun on a crowded school bus. Nothing can justify such a crime, he says.

That may be true, but his insistence on a narrow, legalistic understanding of Ja’Meya’s case betrays a profound lack of concern about the sustained and systematic abuse that she experienced at the hands of her schoolmates.

It gets worse. In a small town in Oklahoma, Ty Smalley’s suicide left behind loving parents and a devoted best friend, a self-described former bully whose insights are among the most accurate and devastating in the movie.

After Kelby Johnson, a high school student in another part of Oklahoma, came out as a lesbian, she and her family were shunned by neighbors and former friends, and Kelby was taunted by teachers as well as fellow students.

Mr. Hirsch weaves together these stories with compassion and tact, and he wisely refrains from making scapegoats of the bullies who cause Alex, Ja’Meya, Tyler, Ty and Kelby so much pain. “Bully” forces you to confront not the cruelty of specific children — who have their own problems, and their good sides as well — but rather the extent to which that cruelty is embedded in our schools and therefore in our society as a whole.

At times I found myself craving more analysis, a more explicit discussion of how the problem of bullying is connected to the broader issues of homophobia, education and violence in American life. But those issues are embedded in every story the film has to tell. Its primary intent is to stir feelings rather than to construct theories or make arguments, and its primary audience is not middle-aged intellectuals but middle-school students caught in the middle of the crisis it so powerfully illuminates.

But while we are on the subject of adult failures, it should be noted that the Motion Picture Association of America’s ratings board, by insisting on an R rating for “Bully,” has made it harder for young audiences to see. The Weinstein Company, which is distributing the film, has released it without a rating after the association denied its appeal and after a widely publicized petition drive was unable to change the board’s mind.

There is a little swearing in the movie, and a lot of upsetting stuff, but while some of it may shock parents, very little of it is likely to surprise their school-age children. Whose sensitivity does the association suppose it is protecting? The answer is nobody’s: That organization, like the panicked educators in the film itself, holds fast to its rigid, myopic policies to preserve its own authority. The members of the ratings board perform a useful function, but this is not the first time they’ve politicianed us.


Opens on Friday nationwide.

Directed by Lee Hirsch; written and produced by Mr. Hirsch and Cynthia Lowen; director of photography, Mr. Hirsch; edited by Lindsay Utz and Jenny Golden; music by Ion Furjanic and Justin Rice/Christian Rudder; released by the Weinstein Company. Running time: 1 hour 38 minutes. This film is not rated.

What I learned from Steve Jobs?

6 Ways to Acquire New Customers Through Social Media

The Customer Experience Series is supported by Webtrends. Get insider tips and a step-by-step guide to acquiring, engaging and nurturing fans. Download the Playbook.

We all know social media is an important tool for brand awareness and customer acquisition — but how exactly are you supposed to convert random Twitter and Facebook users into real-life customers? Well, that depends.

Different brands have different challenges when it comes to customer acquisition: “If you’re our customer, you’ve signed up for a year-long service, unlike the Starbucks of the world, where you can be a customer by coming in for a cup of coffee one day,” says Lisa D’Aromando, social media community manager at Equinox. Whether you’re a clothing shop, a restaurant or a subscription service, you must tailor your strategy so that it makes sense for your brand. That said, there are a few universal ways to help your company attract new faces on the social web.

“I’m a big believer in creating and sharing meaningful content,” says Danni Snyder, co-founder and creative director at jewelry brand Dannijo. “Over time, that is every brand’s best bet for creating and sustaining a following that will grow their business.”

But what does it all entail? Mashable spoke with some super-social brands about how they find new customers and lock in their existing ones they have as repeat buyers.

1. Get Your Search On

There are 340 million tweets sent per day — odds are that a few of them are referencing your brand, though you may not realize it. “Just because chatter on social media channels isn’t mentioning your brand by handle or hashtag doesn’t mean it isn’t happening,” says McKee Floyd, director of brand development at Sweetgreen.

The key is to be proactive. For the company’s upcoming Sweetlife Festival, Floyd set up Twitter searches for “sweetlife” and “sweetlife festival” on TweetDeck, which pulls the tweets even if users didn’t include the hashtag. “As groups of friends have conversations back and forth on Twitter about whether or not they should buy tickets, we monitor and chime in with helpful info, answering logistical questions about the festival and hopefully swaying them towards choosing to attend.”

Geoff Alexander, managing partner at Chicago’s Wow Bao, says his team also uses TweetDeck to search for certain keywords — such as “wow bao,” “baomouth” and “hot Asian buns” — and they reply to any and all posts they find. Wow Bao initially got into social media because there wasn’t a budget for advertising, so the brand opted to spread the word by giving away buns. “@BaoMouth searches the Internet for ways to reward people — giving away bao, full meals or mobile money [for the food truck],” says Alexander.

But the search tactic works for more than just food concepts. Danni Snyder says she monitor mentions of Dannijo religiously and also searches Twitter for “jewelry.” Consuming social media buzz about jewelry — and not just Dannijo’s wares — helps the brand be “aware of what people are talking about, what they like and don’t like, etc.” says Snyder, which can help Dannijo cultivate a new audience with their next collection.

One tip for finding new customers is to see who’s engaging with your competitors — if someone just started following or tweeted at or checked in at another bakery in the neighborhood, you could tweet at the person to come check out your cupcakes. They customer will appreciate the shout-out and the fact that you handpicked them to be your customer. Get clever with searches that are relevant to your business and offerings to help you target potential customers — then reel them in by being charming and human, not salesy.

2. Use Images to Engage

Who would have thought Mr Dannijo would be back in such a good way?! #EVERYBODY #eyespy #MRDANNIJO @manrepeller @danielleasnyder @jodielynns #putaneyeonit
A picture is worth a thousand words — photos drive twice as much engagement as text posts do on Facebook. So if you’re looking to attract some new fans, start snapping pics.

Snyder says Instagram is her favorite medium for connecting with fans. “You can subliminally market without annoying your customers because each post is capable of accomplishing a number of things,” she says. “In one post, we can showcase a new design available at, thus driving traffic to our ecommerce site; show how we’d style the jewelry; mention a tastemaker friend like Questlove or ManRepeller and promote them while they’re wearing Dannijo; inspire discussion and engagement, gaining valuable customer feedback; and provide followers some visual inspiration and insight into your creative process.”

But the pics need not be product-focused. Dannijo posts photos of food and musicians that embody the Dannijo vibe, and its 9,745 followers like and comment on every one of them. Similarly, Rent the Runway posts pictures of various style trends. “On Facebook, we try to use as much imagery as possible — not just promotional imagery of our dresses, but images that relate to pop-culture,” says Jenny Fleiss, president and co-founder of Rent the Runway. For example, in anticipation of the upcoming Great Gatsby movie, the RTR blog posted about Gatsby-inspired fashion trends.

3. Host a Competition

Nothing gets customers going like some swag, so contests are a great way to boost your followers and engagement. But be strategic about what you’re offering, or else you could attract the wrong followers.

ModCloth hosts monthly photo contests that garner hundreds of entries and thousands of votes. “Our most recent contest, Thrifted Treasures, asked our fans to share their favorite vintage finds, and our community could vote up their favorites,” explains Natasha Khan, ModCloth’s social media manager. “The social actions surrounding that event brought in thousands of new fans, which we otherwise would not have gained.”

Khan says contests and offers have been the most high impact customer generation events for ModCloth. But if you’re planning on hosting a contest, Khan has a few suggestions. First, build in actions that allow the fan to share to their social networks, as this will increase virality. Second, stay true to your brand. Third, tweak the contest to fit the platform on which you’re running it — “On Facebook that means sharing photography, on Twitter it means wordplay hashtags, and for Polyvore it means styling outfits,” says Khan.

“Quality is more important than quantity when it comes to Facebook fan growth. If your company product is clothing and your prize is free iPads, then you will gain followers that might not belong to your core demographic. Make sure the reward is something your customer will value, such as a gift card or grab bag of your products,” says Khan.

4. Spice Up The Platforms

With so many platforms to manage, be sure to have a distinct M.O. on each channel — and cross-pollinate sparingly. If a customer sees the same information and pictures on Facebook, Twitter, Tumblr, Instagram and Pinterest, she need only follow you on one of these platforms. Also, be wary of overpromotion. Nothing is more of a turnoff than a constant sales messaging — people easily can unfollow, and they will. Interestingly, many of Wow Bao’s posts have nothing to do with bao — @BaoMouth tweets during award shows and keeps a lively conversation going on a number of topics, winning people over with its spunky personality.

Of course, a big reason why you use various social media channels is to promote your product, so there are some things to keep in mind for the messaging when you are pushing your goods.

“Prove the value of being a Facebook fan. If you can find the same content and offers on other channels, there is no incentive to also follow the brand on Facebook,” Khan says. “Exclusive Facebook-only offers and original content reinforces our investment in the channel.” The same goes for every other social platform.

For Equinox, Facebook is for broadcasting of events and initiatives, like Cycle For Survival, Twitter is more conversation and geared toward responding to questions about membership, fitness routines and healthy eating, and Foursquare is the platform on which to find offers for Equinox’s spa and shop, which are open to the public. “Every Monday in March, we posted a different Foursquare check-in special for The Shop at all of our locations,” says D’Aromando. “Since you don’t have to necessarily be a member to go to The Shop or The Spa, these specials are accessible to everyone,” and can lure in potential customers into becoming Equinox members.

The company’s Q blog is another digital project where you’ll find awe-inspiring videos and original lifestyle content — a great way to add value for potential customers. “Q was launched to extend our brand and increase this word-of-mouth among our target audience. It gives people — members and nonmembers — topics and material from our Equinox experts to share with others,” says D’Aromando. “In lieu of promos, we create a different sort of currency: highly produced, branded content on Q with exclusives for our social media communities.”

5. Make It Personal

No one like a mass message — consumers like to feel as if they’re the only ones being spoken to. You should know your customers and speak to them in personal ways to establish touchpoints that build relationships and create loyalty.

“I like to make it very personable — if someone tweets a question I make sure to answer immediately,” says Steven Rojas, social media director at GrandLife Hotels. “Often I go as far as Googling that person to make sure I know as much as I can about them before reaching out. I want to humanize the brand so people don’t feel like they are speaking to a computer but to an actual person who cares about what they are saying. My obsession for all things digital never sleeps, so I make sure everyone gets what they need, when they need it.”

Live chats are another effective way to offer intimate interaction and engagement with fans. “It’s about having a conversation with your community, so we often do live chats with our stylists on Facebook to answer any styling questions customers may have,” says Fleiss. “These posts tend to elicit the most ‘Likes’ and comments.”

While you’re browsing sites for comments to respond to, don’t ignore negative feedback — addressing the complaint is an opportunity to convert an unhappy customer into an impressed brand ambassador.

“We’re very appreciative when someone takes the time to let us know about a bad experience or an issue because then we can help fix it,” says Jenny Danzi, a Mountain Dew brand manager. “Reply to every complaint to turn those consumers into advocates — even if you can not offer an instant fix, people appreciate getting a human response,” she adds. And don’t forget that even the littlest gesture can make a big difference. “Sometimes for us it can be as simple as letting consumers know where they can find our products,” says Danzi.

Wow Bao takes it to the next level, proactively finding ways to create touchpoints with consumers. “We comment on any and all posts mentioning people’s birthdays and pop culture,” says Alexander. “We even schedule posts for people’s birthdays, when people post something like, ‘My birthday is in 12 days’” — a very personalized tactic that can go a long way.

6. Let Your Customers Shine

Nothing makes a customer feel better than being acknowledged — or better yet, honored — by their favorite brand. Is there a way to offer kudos to your loyal fans? If so, make it happen.

Because women love to talk about what they’re wearing — and often wear RTR to social events such as weddings and cocktail parties — Rent the Runway strives to move these conversations online. “We have weekly style award contests on our blog and Facebook Page, and a section of our site called RTR Moments where women can share photos of themselves in RTR dresses,” says Fleiss.

For Mountain Dew, whose fan base is extremely young and active on social media, the “Diet Mountain Dew Supernova Spotter” is a great way to celebrate the return of the fan-chosen flavor in addition to highlighting the passion of the fans. “Dew drinkers can upload their photo of Diet Supernova, and on Friday we’ll open the entries up to public voting. Fifteen winners will each get a Diet Dew hoodie, and everyone who enters can easily share their Diet Supernova passion with friends,” Danzi says.

For Equinox, whose social media fan base is largely comprised of members, the goal isn’t as much to incentivize people to join (they already have), but to make them feel special for being members. “We have a Facebook app where members can refer friends directly, and if the friend joins, the member gets a referral bonus,” says D’Aromando. “We also just launched a program on Twitter where we’re rewarding our advocates by offering them private group fitness classes for them and their friends. This gives us a way to say ‘thanks’ to those who always post about us, and it gives them something to talk about with their friends — online and off.”

Brands, how does your company acquire new customers on social media? Consumers, what makes you want to become a customer? Let us know in the comments.

Friday, March 30, 2012

Marketing Automation and Big Data

Venture capitalists are looking at marketing automation as among the next fruitful areas of investment, a clear indication that both marketing analytics, marketing data mining and content marketing are viewed as key growth areas. Such investments would represent a huge shift in investing priorities among institutional investors and marketers alike.

In the late 1970s and 1980s, enterprise software was applied to back-office functions such as finance, human relations and manufacturing. In the 1980s enterprise resource planning got more attention.

But marketing automation generally has lagged behind (with some salient exceptions, such as Omniture, Siebel and Trilogy).

Age of ‘big data’ marks change

But some investors seem to believe that is about to change. Ajay Agarwal, Bain Capital Ventures managing director, thinks marketing automation now will get serious attention, and the “big data” trend is the reason.

McKinsey & Company points out that in 2009, most firms with more than 1,000 employees had at least an average of 200 terabytes of stored data (twice the size of US retailer Wal-Mart’s data warehouse in 1999).

A retailer using big data could increase its operating margin by more than 60 percent, McKinsey estimates, by making information transparent and usable and increasing the ability to see patterns in real time and adjust operations accordingly. In other cases, data itself can lead to development of the next generation of products and services such as after-sales service offerings. 

Historically, marketing automation is that it has always been about “process,” not about the “data” itself. And that is about to change, many would argue.

Until recently, it has been difficult or impossible to collect structured data on marketing prospects who were not customers. But social media and the web represent new potential, allowing automated systems to make inferences when a user checks a price, looks at an image, reads a review or conducts a detailed search query, for example.

The implications for understanding of return on investment are huge. The argument is that, for the first time, marketers can link spending on customer acquisition directly to a set of downstream customer actions.

Budgets grow to match interest in analytics and automation

For such reasons, Gartner analyst Laura McLellan has predicted that by 2017, chief marketing officers will spend more on information technology than the chief information officers.
In 2011 B2B and B2C marketing budgets as a percentage of revenue were almost three times as high (10 percent) as IT budgets (3.6 percent), according to Gartner.

Gartner also said 2012 IT budgets are expected to grow 4.7 percent, while all marketing budgets, in general, are predicted to grow nine percent, and high tech marketing budgets, more specifically, are expected to increase 11 percent.

About the Author: Gary Kim has been a communications industry analyst and journalist for more than 25 years, and currently writes mostly about end user behavior, mobile applications, mobile payments, mobile banking and business models in the broadband ecosystem. He recently was cited as a global "Power Mobile Influencer" by Forbes; ranked second in the world for strategic coverage of the mobile business. He writes for several online content sites, including Carrier Evolution, IP Carrier, Mobile Marketing & Technology, Content Marketing Institute and TMCnet. He also contributes to Razorsight and Accedian blogs. Follow him on Twitter@garykim. utm_source=Paul+Writer+Weekly+Digest%7C+29+Mar+2012&utm_campaign=MBS+Mar+29&utm_medium=email

Thursday, March 29, 2012

Big Data in Supply Chain: Better Economic Forecast from the Cloud

Someday soon, the Federal Reserve may be dead, at least for economic information. Blame it on, or credit it to, cloud computing.

I recently visited the Oakland, Calif., headquarters of GT Nexus, a company that monitors supply chain information — things like ordering, payment, manufacture and logistics — for 100 major companies. Think of GT Nexus as a Facebook for corporate behavior: business partners are friends, and the completion of tasks are status updates.

The clients inside this cloud-based system include Home Depot, Sears Holdings, Adidas, Pfizer, Procter & Gamble, Hewlett-Packard and Fiat Industrial. Each giant company typically has about 1,000 other organizations involved in its business, including suppliers and manufacturers, freight companies, customs officials and banks. GT Nexus keeps straight all their goods, services and the payments involved, in real time, on a cloud-based computing platform. It is possible because so many people, things and computers are now connected to the Internet.

Using a laptop, I saw a $270 pair of Adidas soccer shoes was ordered in the United States on Oct. 25, manufactured in Lianjiang, China, on Dec. 25 at 04:00 Pacific time, and air-freighted to the United States on Jan. 6. I saw 4,941,554 units of the anti-anxiety drug Xanax were sent from Pfizer’s Puerto Rico factory to Narita airport in Japan, at a temperature appropriate to keep the drugs safe, ahead of the tsunami anniversary.

I saw that investors in Mauritius had bought Caterpillar’s largest truck, and shipped it (in pieces, to avoid taxes) to South Africa, where it was assembled for final delivery to a mining project in Congo. I zoomed up a level, and looked at thousands of container cargoes as they moved around the planet.

As thrilling, or geeky, as that may sound, something important is going on. GT Nexus can abstract all the data among all these supply chains into one really big picture, and get a remarkably clear view of all kinds of real-time world activity.

Its customers have total revenues that amount to $500 billion, about 2 percent of the world’s gross domestic product. You can take a number like that and start to extrapolate an overall picture of the economy. In fact, that is exactly what economists at the Federal Reserve and the Commerce Department do, though not quite as slickly, when they crank out those all-important numbers on economic growth and gross domestic product.

Looking at the activity of cargo shipments over several years, we saw flat activity in the recession year of 2009, then an increase (compared with a year earlier) in August 2010. That was from companies ordering goods ahead of the Christmas season, though they waited until the last minute because they were not yet confident that the consumer would shop. In 2011, the activity began as early as May, indicating the big companies felt more confident.

So far this year, things are above last year’s levels, and payments are made relatively quickly, indicating the economy is still doing well.

Take a purchase order, say from J.C. Penney, for clothing by Under Armour; the clothing is manufactured overseas and shipped to the United States. That order, mixed with the orders from many more retailers, provides a snapshot of expectations about how much and what people will buy, 270 days before the products are in stores. Can a government economist do that?

As GT Nexus, and companies like it, build out these kinds of systems, their information becomes more telling about the whole world. “Globalization was instrumental to our growth,” says Aaron Sasson, GT Nexus’s founder and chief executive, who has spent 13 years and $30 million of the money he and his brother made selling another software company. “China was very popular five years ago. Now customers are moving to Vietnam, Bangladesh, Kazakhstan, wherever the costs are lower. We just move the system with them.”

Mr. Sasson has not yet made a product from all this data, but sees the possibility. Customers are not used to sharing their information so readily, and he needs to build trust. Recently 45 companies contributed their data in order to figure out the average time a cargo stayed in port. Should they choose to pool all their data, however, they could have one of the most powerful and reliable economic indicators. If they published it, the world would pay attention, even if the companies themselves got, say, a 30-minute lead time on the release of the info.

It is also possible to merge different databases and model future consumption, a feature that could someday shape corporate and government policy. In one scenario, a shipment from Shenzhen to Chicago was modeled for different pollution outcomes, depending on whether it was sent via the ports of Los Angeles; Tacoma, Wash.; or Norfolk, Va., as well as the total carbon produced by the ship, rail cars and trucks used along the way. In an ideal world, a route through Tacoma, which used a lot of rail in the United States, produced the least carbon. But since many of the rail cars were reserved, another database chimed in, the Tacoma shipment would actually require a lot of dirty trucking. Long Beach, Calif., worked better.

It is not clear that GT Nexus has this market won. As they build out their clouds, companies like SAP and Oracle may be able to deliver similar insights across industries and economies, in something near real time. The greatest challenge may be in teaching their customers to share data, because the computer technology, from sensors at the edge to big servers in the cloud, is already in place.

Often enough, successful technologies change society itself. This kind of cloud-based information is rapidly creating huge pools of data in real time, which can be related to other pools of information like never before.

The Chilean Miner Rescue: A Lesson in Global Teamwork

By now, the story is familiar: On August 5, 2010, 33 miners were trapped 2,000 feet below ground at the San Jose mine in Chile’s Atacama Desert. In their first 17 days without contact with the surface and for weeks thereafter, the miners organized themselves for survival under the leadership of foreman Luis Urzua with an unusual level of cooperation and unity. Meanwhile, teams of mining and other experts toiled above ground to find a way to free the miners. Given a 2% chance of a successful release that could take four months, all of the miners emerged above ground alive, just two and a half months later in a triumphant and improbable rescue.

While the true heroes of the crisis were the 33 miners who demonstrated uncommon grace under pressure, their dramatic rescue was the work of many others — from Chile’s new President Sebastian Pinera and the miners’ families to the many Americans, among others, who offered their technical expertise to excavate the men. In late February, the Smithsonian Institute’s Natural History Museum in Washington, D.C., hosted a panel discussion, moderated by Michael Useem, director of Wharton’s Center for Leadership and Change Management, titled “America’s Role in the Chilean Rescue.”

Complementing the museum’s exhibit “Against All Odds: Rescue at the Chilean Mine,” the discussion took a closer look at the contributions of U.S. experts to the mine rescue, featuring the stories of Ed Breiner, president of Schramm, based in West Chester, Pa., which supplied the drilling rig; Richard Soppe, senior drilling application engineer at Berlin, Pa.-based Center Rock, which provided drills; and Michael J. Duncan, former deputy chief medical officer at the National Aeronautics and Space Administration, which dispensed medical advice to protect the health of the miners. “We often talk about turning points or the defining moment when we see what we’re made out of,” said Useem about those who participated in the rescue effort. “Though you were not in charge, you did what you [needed to do]. That’s why one billion people were so eager to tune in.”

The evening started with recollections of the “untold” story from Roberto Matus, charge d’affairs at the Chilean Embassy in Washington, D.C.  Matus got a phone call in his Washington office from the Chilean government asking for a U.S.-made machine that could reduce the rescue time in half. (Drills located in Chile would take until December to reach the men, whereas the U.S. machine could possibly excavate them by October.) In three days, the rescuers at the San Jose mine received the machine, which was delivered on a plane by UPS for free.

Matus also described the flood of letters and gifts from Americans, including Apple’s Steve Jobs, who sent iPods for each of the miners. The Chileans decided to reserve the iPods as a Christmas present for when the miners got out, because “we needed the miners to work as a team,” said Matus. “If we sent the [iPods down to them], they would have isolated themselves. For now, we needed them to follow directions.” The Chileans also received from one U.S. company a box of 33 toothbrushes that were designed to provide effective cleaning with little movement — perfect for the unusually close quaters. “The response was amazing, massive and constructive,” said Matus.

Schramm’s Breiner chalked up the rescue’s success to an uninhibited exchange of ideas and information. “Technology, the free flow of trade and collaboration are what saved the miners,” he said. “There was leadership below the ground — people of character and faith sustaining themselves for 17 days [without knowledge that the outside world knew they were alive] — and people above ground exchanging [the] ideas … that made [the rescue] happen.”

NASA’s Duncan agreed. “It was the Chileans who brought all the teams together and deserve credit for the rescue” because of their willingness to seek outside input, he noted. Previously, Chilean leaders had met Duncan and NASA officials during a conference in Vienna, Austria, on the peaceful use of outer space. Three days after the miners were found alive, Chilean Minister of Health Jaime Manalich called Duncan to ask how the rescuers could apply Duncan’s expertise on the longer-term health and psychological issues of astronauts in space flight to the miners’ situation. Nine days later, Duncan and three other NASA personnel arrived at the mine to give their advice in person. Manalich and Mining Minister Laurence Golborne debriefed the NASA team, sparing no detail. “They told us everything … so we could use our best judgment to offer suggestions,” said Duncan. “Chance favors the prepared mind,” he added. “Each person involved in the rescue was prepared in his own way, and [our] expertise was brought together by this event.”

Soppe, whose company, Center Rock, supplied the drill that ultimately reached the miners, recalled the repeated, often heartbreaking, attempts to drill through to the right spot. After he heard the December rescue estimate, Soppe thought: “If we get the right technology, we could speed it up by four to six weeks.” Center Rock shut down its entire plant and rebuilt its equipment in three days — a process which would have normally taken three to four weeks, Soppe noted. “It was a function of teamwork. The faster we got through, the faster we’d get the miners out.”

Soppe and Breiner flew to Chile on September 3, vowing that “failure is not an option.” But the task was daunting: “We had to thread a needle 624 meters down through a five and a half inch diameter hole at the top,” said Soppe. “We drilled 40 holes before we hit the mine. The drilling tool was never designed to do something like this. We found out how we could break everything twice.” The miners helped by taking photos of the broken parts, sending them above ground so the engineers could redesign and tweak the devices for the next attempt. The day the drill broke through to the miners, “the minister of mining had an American flag put up for the six Americans at the drilling site,” he noted.

Why did the rescuers persevere when the chances were so small? In a summarizing statement, Nicolas Bar, cultural attache at the Chilean Embassy in Washington, noted that there is one basic concept behind why the world’s eyes –and experts — were focused on Chile during that time: “The importance of individual life.”

Featured Professors: Michael Useem
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Can Indra Nooyi Revive PepsiCo?

In one of its biggest new product launches in years, PepsiCo this week unveiled Pepsi NEXT -- a mid-calorie beverage that contains 60% less sugar than regular Pepsi-Cola. The soda, which comes in Pepsi's trademark peppy blue can, is accompanied by an aggressive ad campaign targeting calorie-conscious customers who in recent years have replaced carbonated soft drinks with teas, flavored waters and sports drinks. The company calls Pepsi NEXT a "game-changer in the cola category" and has bestowed a hopeful tagline: "Drink It to Believe It."

The question is: Will Wall Street?

It's been a rough few years for PepsiCo. Indra Nooyi, chairman and chief executive officer, has diligently tried to transform the company from a purveyor of sugar-laden bubbly beverages and salty snacks, into one that has healthier and more wholesome offerings. But performance has -- pardon the pun -- fizzled. Shares of PepsiCo have barely budged during her six-year tenure, while the stock price of rival Coca-Cola has nearly doubled in that time. Perhaps most embarrassing for the once stalwart competitor in the cola wars, its flagship brand, Pepsi, no longer claims second place in market share of the carbonated soft drink market. In 2010, Diet Coke took over the number two spot and has remained there.

Investors are impatient. Some accuse Nooyi of focusing too intensely on her nutrition strategy while overlooking PepsiCo's North American soft drink business. Earlier this month, the company announced management changes intended to restore their confidence in the company: John Compton, who most recently ran PepsiCo's highly successful Frito-Lay business in the Americas, was named president, while Brian Cornell, a PepsiCo veteran, has been wooed back from running the Sam's Club chain for Wal-Mart Stores. He will fill Compton's previous position.  The restructuring not only gives PepsiCo's board some options for potential successors to Nooyi, but is also a clear statement that the company is attempting to return to its profitable past.

"Based on the management changes, it appears that the company will be back to emphasizing its sugary beverages and snack foods," says Jason Schloetzer, a professor of accounting at Georgetown University's McDonough School of Business. "This is kind of like Pepsi saying to its investors, 'We understand we were very profitable in these areas, and now this is where we are going to refocus our energy.'... It's hard to shake the past -- particularly when the past was more profitable."

The renewed focus on high-margin drinks and snacks may assuage investor concerns for now, but experts caution against trading a solid, long-term strategic repositioning for a bit of short-term success: Nooyi's goal of reinventing PepsiCo's product line is sensible, but real and lasting change takes time. To increase market share and revive earnings, experts suggest, she needs to spend more money on marketing top beverage brands -- a move that is already in the works -- and to put the right people in charge of those divisions. Nooyi also must do a better job of managing Wall Street expectations and courting institutional investors who care about sustainability and will give her more time and leeway to achieve her goals.

'Performance with Purpose'

A native of Madras, India, Nooyi joined PepsiCo in 1994 as the company's chief strategist. Seeing a bleak future for fast food, she pushed the company to make some bold moves: In 1997, PepsiCo created a spin-off firm (now called Yum! Brands) to unload KFC, Pizza Hut and Taco Bell. The following year, Nooyi was promoted to chief financial officer and helped engineer a $3 billion acquisition of Tropicana. In 2001, Nooyi -- who has an MBA from Yale -- co-orchestrated a $14 billion takeover of Quaker Oats, which makes Gatorade. PepsiCo's earnings skyrocketed, and Nooyi became a force in the corporate world. In 2005, Forbes magazine ranked her the 11th most powerful woman in business. She became PepsiCo's first female CEO in 2006.

Her strategy -- to more than double PepsiCo's revenue from nutritional drinks and snacks to $30 billion by 2020 -- is no doubt ambitious. Through senior level appointments and internal initiatives, she has pursued her cause. She enlisted Derek Yach, a former World Health Organization official, as senior vice president of global health and agricultural policy. Under Nooyi's watch, the company also started working with farmers and scientists in developing countries, like Ethiopia, on sustainable growing techniques. In 2009, PepsiCo rolled out compostable bags made from biodegradable plant material for one of its chip brands. (The bags were eventually scrapped because customers thought they were too noisy.)

Nooyi has also worked to reformulate PepsiCo's existing products, and has made creative acquisitions to boost the nutritional quality of its offerings. The company has reduced the fat, and taken out some of the sugar in many of its mainstream products, and it has added whole grains, fruits and vegetables to some of its snacks. The company has also come up with entirely new products that are, at least arguably, healthier -- Pepsi NEXT, which contains high-fructose corn syrup and artificial sweeteners, has 60 calories to regular Pepsi's 100. In 2010, PepsiCo acquired a majority stake in Russian dairy Wimm-Bill-Dann to give it more of a presence in yogurts and grain-enriched dairy products.

In many ways, Nooyi's strategy is aligned with the times. With 34% of adults in the U.S. classified as obese, and nearly one in three children considered overweight, the media -- and indeed many Americans -- are paying closer attention to the importance of healthy eating. It is a trend that has gotten the better of some businesses. For example, Hostess, the privately held company known for indulgent pleasures including Twinkies and Drake's snack cakes, filed for bankruptcy in January.

What's more, corporate social responsibility -- once just a catchy phrase -- has become an increasingly relevant issue for companies and consumers alike. According to a recent survey by public relations firm Burson-Marsteller, more than 75% of consumers say that social responsibility is an important factor in their purchase decisions, and 70% say they are willing to pay a premium for products from a socially responsible company.

"More companies and consumers are paying attention to greenness and sustainability," notes Georgetown McDonough's Schloetzer, who is an expert on corporate governance. "Companies are thinking about how their operations affect the end-to-end supply chain and are considering the recyclability of their packaging materials. It's an inventive way to run a business. As an impartial observer, it's perhaps noble for Nooyi to try to transform a large company in this manner."

Michael Useem, a Wharton management professor and director of the Center for Leadership and Change Management, says Nooyi represents a new breed of corporate leadership. In a cover story for U.S. News and World Report on "America's Best Leaders" in 2008, he wrote that Nooyi "is attempting to move beyond the historic trade-off between profits and people. Captured in her artful mantra -- 'performance with purpose' -- she wants to give Wall Street what it wants but also, the planet what it needs."

Shortchanging Core Brands?

Unfortunately for Nooyi, Wall Street is not getting what it wants. Last month, PepsiCo warned that its profit would drop 5% this year. Revenue at its Americas beverage unit -- which includes Pepsi, Mountain Dew, Gatorade, Tropicana and Lipton and accounts for about a third of PepsiCo's annual revenue -- was flat. Shares of PepsiCo are down about 2% for the past two years, while the S&P is up about 20% over that time period. In spite of this, Nooyi received her first salary bump in five years as CEO last year. Her total compensation was $17.1 million, up 6% from 2010, according to a regulatory filing.

David Reibstein, professor of marketing at Wharton, says that much of Nooyi's problem is that she was trying to do too much too soon. "To a large degree, Nooyi is very progressive in her thinking," he states. "She has a far-reaching vision of what she is trying to do. The obligation to be responsive to your shareholders and to also be thinking about societal and environmental impacts are [good goals], but you need to be able to get there from the here and now. It's going to take a considerable amount of effort over a sustained amount of time."

Critics charge that Nooyi has allowed the firm's core brands -- namely beverages in North America -- to languish. "Taking the central focus off your core brands can be problematic," says Charles Taylor, professor of marketing at the Villanova University School of Business. "When you're building a new line of business, or doing brand extensions, the risk is high, especially compared to keeping your focus on brands with very high equity that have been effective for you for many years. I wouldn't say [core brands] have been neglected, but they haven't been as aggressively marketed."

In 2010, for instance, PepsiCo elected not to advertise during the Super Bowl telecast, which is always one of the most-watched television events of the year. As an alternative, the company in January of that year debuted The Pepsi Refresh Project, a social media campaign where customers proposed community service ideas to invigorate and revive their neighborhoods. The company spent in excess of $20 million on the effort. In November of that year, Advertising Age ran a story proclaiming that The Refresh Project "doesn't seem to have had a major influence on the brand's bottom line." It's impossible to draw a direct correlation, but 2010 was also the year that Diet Coke overtook Pepsi in market share.

Coca-Cola, of course, is a formidable competitor. The company has been lauded for making smart, calculated marketing choices. Its heavy investment in advertising in China during the Beijing Olympics is one example. A full year before the Games, Coca-Cola advertised on thousands of Chinese billboards and bus shelters with a media campaign highlighting the country's homegrown athletes. Today, Coca-Cola holds about 17% of the Chinese beverage market, while PepsiCo has a 6% share, according to Euromonitor.

Back in 2002, Coca-Cola made another good bet by sponsoring reality-TV talent contest "American Idol" for less than $10 million. The 12-week television program captured 23 million viewers for its finale, prompting USA Today to run the headline: "Real winner of 'American Idol': Coke." The show has since become a ratings juggernaut. PepsiCo, which passed on the opportunity to sponsor "Idol," now sponsors "The X Factor," another singing competition,  spending up to $60 million for the sponsorship of the show, according to Adweek.

Cultivating a New Pepsi Generation

In spite of these problems, PepsiCo remains a strong brand. "Your average loyal Pepsi drinker isn't aware of the efforts to move toward nutritious foods, and Pepsi has not done anything that [has caused] long-term damage to the brand," says Taylor. "Pepsi is still considered by Interbrand as one of the top brands in the world." (For the record, PepsiCo stands at number 22 on Interbrand's ranking, while Coca-Cola has been named the world's most valuable brand for the past 12 years.)

PepsiCo has its work cut out for it., however. Already plans are taking shape to boost brand awareness: In February, the company ran its first Super Bowl TV commercial for Pepsi in three years. Nooyi also recently announced plans to increase PepsiCo's marketing budget by as much as $600 million this year, which represents about a 15% increase over last year. Most of the new spending will be dedicated to the U.S. beverage business. The firm also plans to launch its first-ever global marketing campaign for Pepsi.

Nooyi has also made some strategic management changes that demonstrate her commitment to PepsiCo's beverages division. In September, Albert Carey, a PepsiCo veteran and head of the company's smaller, but more profitable, Frito-Lay North America snacks unit, took over its Americas beverages unit. Carey succeeded Eric Foss and Massimo d'Amore, who co-ran the business. Foss left PepsiCo in December, while d'Amore was essentially demoted; he still runs the Latin American beverage business, but reports to Carey.

Nooyi's strategy to reinvent PepsiCo's product line has proven tough to execute because changing customer appetites is not easy. "You may have a vision for what the market will be wanting, but it doesn't mean it wants it now," says Wharton's Reibstein. "You can't leave your customers behind." An effort by McDonald's to introduce "good for you" menu items serves as a cautionary tale. Take the McLean Deluxe, which it marketed in 1991 as a heart-healthy alternative to other hamburgers. The burger had 310 calories and only nine grams of fat. "A healthy breakthrough for the American public," lauded a New York Times editorial. But customers complained it lacked taste. In 1996, the company removed it from the menu.

"McDonald's has introduced some healthier foods over the years, and it has had some success here and there. But the majority of people are still buying Big Macs," notes Taylor. "For the most part, consumers are set in their ways. Getting consumers to eat healthier food is going to take at least a generation - even in spite of best efforts by companies."

This does not mean Nooyi should abandon her plans, observers say. Rather, she needs to develop a strategy that better balances the short term with the long term, according to Yoram (Jerry) Wind, Wharton marketing professor and director of the SEI Center for Advanced Studies in Management. "Companies can be socially responsible, provide more nutritional and healthier products and still be profitable, but it requires careful management of board and Wall Street expectations," he says.

A deft touch as a manager -- and perhaps  different investors altogether -- are also needed, he adds, noting that Nooyi should put more effort into courting institutional investors who value sustainability and who will give her more latitude to achieve the company's overarching goals. "There are opportunities for creative approaches here. She should show them that she has a plan to achieve financial objectives ... and still be socially responsible," he says. "It is doable."

Whether Pepsi NEXT is the next big thing in cola, or whether it goes the way of the McLean Deluxe, Wind suggests that Nooyi's pursuit of aligning agriculture and nutrition is sound. "Maximizing long-term shareholder value and addressing some of society's biggest problems, such as obesity, nutrition and health, is the right kind of strategy."

Ad Breaks to Go When Digitization and Subscription to Channel Grows?

By Anant Rangaswami, Firstpost, Mumbai, March 29, 2012 

Differentiated content, and not advertising revenue, should be the cornerstone of a TV channel's business plan. Addressability and digitisation, for the first time, will transfer the power to the subscriber, who will choose the channels that he wants to watch and will pay for them.

"How often do you get irritated with a commercial break interrupting the film you're watching just at the moment it got exciting? How irritated do you get when the frame of the programme you're watching shrinks as it gets 'surrounded' by a frame that sends out a commercial message? Hey, why is there another ad break? Didn't we just see one? Why are the commercials so LOUD that you jump for the remote control as the ad break begins, and raise the volume as the TV programme begins? Thanks to the ads, a two-hour movie becomes a three-hour viewer experience - is that fair?," Firstpost had written in an article that reported TRAI's move to restrict the advertising time on TV channels in India.

How do broadcasters react? "But broadcasters are not amused by the proposal to put limits on advertising, contained in the telecom and broadcasting watchdog's consultation paper on issues related to advertisements on television. They fear their main source of revenue will be badly hit," reported Hindu BusinessLine.

And, before the broadcasters decide to cry 'foul' and act like victims, let's take a look at the most recent major exercise conducted anywhere in the world on restricting advertising time - in the UK.

In a study titled 'Regulating the quantity of advertising on television', which was published as recently as December 15, 2011, the UK's watchdog, OFCOM, would have faced similar howls of protest - and it did.

"Any changes to advertising minutage regulation could have a significant impact on broadcasters, advertisers and viewers. There have been very different views expressed by different stakeholders on the need for, and nature of, any changes," says the OFCOM paper, highlighting the complexity of the task at hand.

The scenario is not much different in India. Broadcasters, advertisers and viewers will have different views on any proposed change and on the final outcome, whatever it is.

There is, however, one significant difference between the state of the industry in India and in the UK -- the historic business model.

Thanks to the example created by the legacy lead medium, print, media in India has been 'funded' largely by the advertiser. Newspapers, even today, recover a small fraction of their printing, paper and distribution costs from the cover price; forget about news-gathering and other attendant costs. Advertising revenue is the mainstay - and satellite television, when it came to India during the first Gulf war, followed the leader.

The entry of satellite television

When satellite television was launched in India, it was not 'largely' funded - it was funded 100 per cent by the advertiser - and revenues from subscription were non-existent. In the early '90s, we didn't even have the phrases 'Free to air' and 'Pay' to describe channels - which were free to subscribers.

The role of the cable operator and mutual love

The cable operator that all the TV channels love to hate so much today was the catalyst for the growth of satellite television in India. What use was a satellite channel to the consumer unless there was a way for him to receive it on his TV set? Enter the cable operator, who made the investments in dish antennae, cables, decoders, infrastructure, technicians, permissions and bribes, too.

In the first heady days of satellite television, the channels paid cable operators nothing - and the cable operator's only source of income was the subscription fee from the consumer. In turn, the cable operator paid the channels nothing - the channels' revenue was from advertising. Channels and cable operators loved each other.

The explosion of TV channels

By mid-1994, India had the established channels in Zee TV, Star Plus, Prime Sports, BBC and MTV/Channel [V]. Media houses were falling over each other in the race for India; Ashok Advani launched TVI, Raghav Bahl of Television18 brought ABNi to India, Jain TV had launched, Home TV was on the horizon, Sony was making noises to launch, the snubbed-by-STAR MTV was planning to come in on its own.

The cable operators' infrastructure was all analog, which limited the number of channels which could be carried with clarity - and we saw the beginnings of problems of 'carriage' (which I'll come to later).

Spoiling the cable operator

Zee and the channels of the STAR bouquet were all beamed from a single satellite - AsiaSat - which meant that all, together, needed just one satellite receiver/dish. The cable operator was reluctant to invest in a new dish which was receiving just a single channel - such as Jain TV or ABNi. The broadcasters needed the operators to carry their channels - and smothered them with love - in the form of free dishes and receivers.

The impact of STAR Movies

If this wasn't bad enough, a courageous STAR decided to launch the first of India's paid, encrypted digital channels - marking the beginning of the animosity between the cable operators and the broadcasters in a long phase that saw the dominance of the cable operator and the genesis of the leakage of revenue from subscribers.

STAR Movies also marked a milestone in how the business would be funded.

STAR Movies was the first pay channel in India. The signal was encrypted, and the cable operator required a decoder to unscramble the signal before it was transmitted to the subscriber. The cable operator would now have to pay a fixed sum per month per subscriber for the channel.

However, there was no infrastructure for the cable operator to re-scramble the signal forward - all of the subscribers of an operator who subscribed to STAR Movies would receive the channel. While the operator would ask the subscribers to pay 'extra' for STAR Movies (in addition to the fixed monthly sum he charged for the FTA channels), there was no mechanism for him to disconnect only STAR Movies.

This phenomenon gave rise to new TV jargon - 'declaration'. Operators and distribution executives would agree on a number of subscribers, and this 'declaration' would be the basis for the revenue to STAR Movies (and, later, to all pay channels). Operators routinely under-declared - and the revenue leakage began in earnest.

The first commitment to limiting advertising time on pay channels

STAR Movies launched in India as a pay channel - with a single, 60-second 'interval' for advertising. Let me re-run this: just a SINGLE break in the entire duration of the movie and just 60 seconds in that break.

The reasoning was lofty: this was a pay channel and viewers deserved not to be disturbed by ads.

Today's protestors seem to have forgotten those lofty thoughts and ideals...

Don't antagonise the cable operator

Because the broadcasters did not invest in distribution infrastructure (in the larger sense; they did in the case of Hathway), they had little control over the cable operator. As the cable infrastructure collapsed with the launches of new channels, there were only so many frequencies available to carry clear audio and video - and the demand/supply equation tilted squarely in favour of the operator. If a channel wanted to be carried on the 'clear' frequencies (I will refrain from using jargon), the cable operator agreed to do so only if he was paid a 'premium' for the position. Competition forced newcomers and incumbents to outbid each other in the fight for premium position.

As more channels launched, things got worse - channels had to pay a CARRIAGE fee to operators - pay and you will be carried; don't and you won't.

In such an environment, pay channels such as STAR Movies struggled to get operators to increase the number of declared subscribers --- and the leak became a flood. The compunction was to appease the cable operators at all costs, as that's where the power lay - with the cable operator, not with the broadcaster or the viewer.

Advertising is everything

By now, STAR Movies had abandoned all thoughts of near ad-free broadcast, as competition in the movie space had caused the cost of acquisition to sky-rocket. New costs such as carriage fees and premium for frequencies had emerged.

The only hope was to increase revenue from advertising.

And competition, growing each month, meant that the yields were decreasing, which meant that the only way to increase revenue was to increase the number of minutes of advertising time, which is what the TRAI is concerned about.

And so it went, till Dish TV and Tata Sky were launched

In 2004, the first signs of a shift in the power equation were seen with the launch of the first direct-to-home (DTH) service in India, Dish TV, closely followed by the launch of Tata Sky.

It marked the beginning of the end of the cable operator as the consumer could now bypass the operator, his whims and fancies, and poor quality signals, at a similar cost. More importantly, DTH brought with it addressability and measurement, which resulted in channels getting paid for every single consumer who had subscribed to it.

The impact of digitisation on revenues

Let's take a look at what the revenue pie for a particular broadcaster looks like: "Zee has a number of things going in its favour. Subscriptions for both DTH and cable are robust. The company is looking at better deals with cable operators in unison with STAR TV and expects better realisations when DTH comes up for renewal. Subscriptions account for 44 per cent of Zee's total revenue. Zee's subscription revenue originates from three nearly equally-split sources: DTH (36 per cent of subscription revenue); domestic cable (32 per cent); and international subscriptions (32 per cent)," says Value Research Online, October 2011.

Domestic DTH, alone, then contributes approximately 16 per cent of the entire revenues of the channel. While it must be mentioned that, among all the broadcasters, Zee's distribution story is the best, the general positive growth trend is common.

Let's take a look at what the growth looks like:

Source: FICCI KPMG Report 2011

It is digital which is measurable, which is spurring the growth of the entire category, which, by direct implication, means that the TV channels have more and more predictable revenue from this head, reducing the pressure on revenue from advertising sales.

Does digitisation reduce the pressure on ad sales? The viewer is king!

That's the rub: it does and it doesn't.

Addressability and digitisation transfer the power to another entity - for the first time, it is the subscriber who is king. The subscriber will choose the channels that he wants to watch and will pay for them - while he will not pay a farthing for the channels he does not want to watch.

In essence, the channels which prove popular will see significant revenues in a digital pay environment, and the channels with less than compelling content will actually see their subscription revenues dip.

And that's the crux of the current protest by broadcasters

There can be no case, if one looks at practices and regulations elsewhere in the world, of unlimited advertising time. You can get a sense of what prevails generally in Europe and specifically in the UK here.


Digitisation means more predictable revenue for broadcasters.

Digital homes will outnumber analog homes in India by 2013.

As a consequence, income from subscriber revenue is growing dramatically - and the dependence on revenue from advertising is decreasing - but only for the channels that consumers find favour with.

What increasing minuteage will do is to allow channels that perform poorly to continue to survive - and cause the yields for all channels to stay under pressure. It is only the poor performers who need endless inventory to sell - not the better channels.

What increased secondage will do is to allow television in India to go the same way that newspapers have gone - create a business plan which is unviable in the long run, which constantly puts pressure on advertising yields.

Astonishingly, the reason for a TV channel to survive should be differentiated content, and differentiated content should be the cornerstone of the business plan.

By keeping the cover prices low, newspapers demonstrate little or no confidence in what should be their raison d'ĂȘtre - superior content. And, TV wants to do the same.

The TRAI proposal is a rescue - not a punishment...

The writer is consultant, Firstpost.

Want to write for afaqs!. Please apply.

Wednesday, March 28, 2012

Google’s semantic search set to revolutionise SEO

Well co-ordinated press releases over the past couple of weeks provide a hint at what Google has up its sleeve.

We believe it will mark one of the most significant changes to search engine marketing since AdWords was launched.

In fact, this could be the beginning of the end of search results as we know them...

A huge shake up

Well co-ordinated press releases over the past couple of week provide a hint at what Google has up its sleeve. We believe it will mark one of the most significant changes to search engine marketing since AdWords was launched.

We’ve become complacent as to how good Google is at achieving its stated objective of organising the world’s information. We forget about an internet pre-Google where one had to rely on Lycos, Yahoo, AltaVista, AskJeeves etc. – when Google appeared it revolutionised everything, we embraced it because it seemed to get to some information of relevance quicker than the other engines.

In reality we didn’t really know what we were looking for, Google simply refined what was already out there and provided results which were slightly more aligned to what we thought we needed.

The key point here is that we didn’t really know how we wanted this information presented to us. Furthermore, since then normal people (i.e. not search marketers) haven’t really questioned the relevance of the results we receive – it’s just how it is.

The concept of showing us a page full of links seems completely natural now, perhaps interspersed with a few images or videos as Google has tinkered with the algorithm over the years.

But what if rather than Google spitting out a load of listings in a more sophisticated version of the Yellow Pages it just answered your question, then provided a list of possibly relevant sources and websites?

Ok, it does already happen, one only need search for flight numbers, for example, to see Google’s Instant answers in action, but the proposed changes go beyond this with Google trying to be more human.

If a friend of yours asked you when the battle of Hastings took place, they wouldn’t expect you to come back with a list of possible information sources, they just want the answer – Google wants to be your clever friend. 

What are these changes?

This could be the beginning of the end of search results as we know them. Google has been slowly integrating answers into search results for the past few years for currency conversions, flight numbers and simple questions, but this announcement is the start of something much bigger.

Rather than just answering relatively more straight forward queries like “When was Google founded”, “When did Queen Victoria die”, “100 GBP to USD”, “vs200” (a flight number) it will start expanding out the space these sort of responses take up within the search results and it will start showing the answers to more complex questions.

The reason this is potentially so big is that users will be shown what Google considers being the most relevant answer, rather than simply a list of website links.

There is a twofold benefit to Google in doing this:

It’s good for users: Google’s mission statement is to organize the world’s information and make it universally accessible and useful. Google are using their technology to help users save time by providing them answers to queries rather than simply a list of websites.
Users will spend more time on Google: This provides more ad-revenue potential.
This has huge implications on website owners because it means websites will not be able to measure their “reach” within Google search results by just traffic from Google, because users will not necessarily be clicking through to their website if they can read these answers directly on Google.

What impact will it have on brands?

1. Click share
In the long term, as Google becomes smarter in answering more and more questions, this could have a significant impact on brands. Initially however, we anticipate this will have a limited impact on brands. The type of websites  we anticipate will lose traffic because Google shows their answers will be:
Yahoo answers
Although the WallStreetJournal reported that a Google source reported up to 20% of searches could be affected, we think the initial number of search queries will be lower. We have analysed the search traffic coming through to a number of our clients’ sites and anticipate that around 13% of search queries could be impacted by this update.

It is unlikely that many of the big brands will be significantly affected in terms of click-share initially, as we anticipate Google’s answers will primarily be based around factual information and queries such as:

“What is a cash ISA”
“How does 4g work”
“Kate Middleton”
“Rubik’s cube”
“Ingredients of coca cola”

2. Layering of additional information
For brand searches, however, there is an immediate possibility that search results pages will be layered with additional information Google is able to extract from Metaweb, the open source database of global knowledge it acquired in 2010.

This could provide brands with yet another area they will need to focus on to ensure their brand information is kept up to date in the areas that Google is extracting the information from.

3. Contributing to the answers space
Inevitably, brands are going to want to be present within the answers space that Google roll out within the search results pages.

From an organic search perspective, brands will see the tangible benefit from marking up their website code using the appropriate schema mark-up language which helps Google understand what the content is about more accurately.

For example, product information like brand, prices and reviews can all be marked up specifically to help ensure search engines understand exactly what the content is. There will be more visible tangible benefit from marking up products, prices, locations and contact details more effectively.

Furthermore, brands should get more value from traditional FAQ pages or definition pages on their sites which could be chosen by Google to answer users’ questions within the results pages.

From a paid perspective, we anticipate Google may make it possible for brands to be present within some of the answers sections with new ad formats which could be bought on a CPM model as opposed to the traditional CPC model.

4. Change in focus of metrics to include share of voice
For some time now, MEC have been equating influence within the Google results pages as a ‘share of page’ numerical value.

We anticipate this metric of share of page within the Google results pages will become more important as Google provides more answers to questions and begins layering additional information within the search results. MEC are developing a tool (code named Project Magnum) which analyses the composition of the results and provides a score as to the share of page and influence.

This tool is being built with the intention of being able to help our clients understand the value derived from having information displayed within the answers section of the page.

5. Watch the space to see what will happen in the UK is always the first place Google rolls out changes, so we are keeping a close eye on how changes the results pages in the coming weeks and months as they will appear there before they come to Google UK. 

What are the positives?

Users – If the results are good, it will be better for users because they will get the information they were looking for more quickly.
Google – Provides a better experience for users than other competing search engines. Moves Google away from just been the doorway to the internet and keeps users on Google, thereby increasing their ad-revenue potentials.
Website owners – Trusted sites which Google uses to serve ‘answers’ to questions will see its influence increase significantly in terms of the exposure of their content.
Advertisers – Google could provide new advertising formats within the answers section for advertisers to buy on either a CPC or CPM.
What are the negatives?

Users – If the results are wrong or deemed incorrect (it’s a moral maze, how should Google answer this question: “Was Hilter evil?”) this could irritate users, particularly when the answers are personalised based on previous search history.
Google – Could open itself up for significant criticism to some of the answers that the algorithms provide.
Website owners – Google will show larger snippets of content directly within the search results and as a result, will lose traffic going through to its websites and the ad-revenues that it can get from the traffic.
Advertisers – More reliance upon Google as traffic.
Why is Google doing this now?

Google has been leading up to this over the years, and we’ve known for some time it wants to get to the point of being able to answer questions effectively. It now has a better understanding of semantic search than ever and is ready to launch... 

In addition, Google needs to continue to grow its advertising revenue in order to deliver a growth in shareholder value. We know that whilst the volume of searches across most markets is increasing, the volume of ‘monetisable’ search is not growing at the same rate.

One way of driving revenue growth in line with market expectations could be to open up new or alternative CPM based revenue streams within the ‘answer’ space.

*This blog post was written by both David Towers (Head of SEO) and Greg Shickle (Head of Performance Media) at MEC UK.

David Towers is SEO Manager at MEC Manchester and a guest blogger on Econsultancy.