New movie, “The Hunger Games” was just released in the United States last week. It already earned about $155 million, and becoming the top-selling movie in this season. This movie is expected to create between $800 million and $2 billion for Lionsgate.

Unlike other movies, however, the marketing team of this movie is relatively small. Currently, only 21 employees are working for Lionsgate’s marketing team, and marketing budget is limited to $45 million, which is a sharp contrast to the normal budget of over $100 million.

To effectively communicate with target consumers, the marketing team of Lionsgate is using social media services such as Facebook and twitter. Lionsgate created total of 13 facebook websites to target consumers in different states. With increased penetration of social media, Lionsgate is hoping to reach a large number of movie lovers.

Use of social media, however, can be tricky because it can also attract audiences who are not satisfied with the movie. If the film becomes unpopular, the social media can accelerate the diffusion of negative message.

Success of social media marketing, therefore, largely depends on the popularity of actual movie. If this film is found out to be popular, social media can certainly help Lionsgate to attract more customers. If not, it would be extremely hard for Lionsgate to keep using social media for promotional purposes.

http://news.cnet.com/8301-1023_3-57402944-93/hunger-games-marketing-efforts-aim-to-satiate-fans

http://www.google.co.jp/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDEQFjAA&url=http%3A%2F%2Flatimesblogs.latimes.com%2Fentertainmentnewsbuzz%2F2012%2F03%2Flionsgate-spending-.html&ei=MO1zT4bfBOT42gWwqqHZDg&usg=AFQjCNET_hiyRXHu4rh-bMGRTbok5pdKsw&sig2=JC3n1IL_HUDDNz-wIcrEyg

Recently, a large number of businesses have been trying to incorporate social media in their marketing mix. Although there are several choices of social media services, Facebook is maintaining its dominant position, according to eMarketer.

In February 2012, Canada recorded the historical social media penetration rate of 49.3%. This penetration rate is only 0.6% lower than the United States, which has the highest penetration in the world.

Out of many social media services such as LinkedIn, Twitter and Google+, Facebook is by far the most popular social media. The total number of Canadian Facebook users is expected to grow to 17.1 million by 2014, and it gained more than 20 million unique visitors in October 2011!

Other social media services are lagging behind. Twitter gained only 4.9 million unique visitors during the same period, and Tumblr gained only 2.5 million. LinkedIn is quickly becoming popular, and it attracted about 5 million unique visitors in February 2012 (70% increase from a year earlier).

Still, it takes time for competitors to challenge the current position of Facebook. The average time spent by visitors is 473 minutes on Facebook, while Twitter could only retain users for 19.9 minutes. More time users spend on a social media website means they will watch more advertisements, and create increased revenue opportunities for service providers.

Out of many social media websites, however, Google is probably facing the most significant challenge.

Google’s social media service,  called “Google+” is supposed to challenge the dominance of Facebook. Instead, average usage of this service has been declining over past few months. In November 2011, average user spent 5.1 minutes on Google+, which was about 1/100 of Facebook users. By January 2012, the average usage time declined to shocking 3.3 minutes.

Creating a popular social media service is challenging even for Internet giants such as Google. To attract a large number of users and make them stay longer, service providers need to provide innovative services for Internet users.

http://www.emarketer.com/Article.aspx?R=1008932&ecid=a6506033675d47f881651943c21c5ed4

http://www.emarketer.com/Article.aspx?R=1008933&ecid=a6506033675d47f881651943c21c5ed4

Google is renewing its algorithms for search engine rankings. It can cause some significant rise/drop of website rankings, and SEO managers need to adjust for the new system. Adjustments are aimed to exclude “overly optimized” websites, and focus on quality of contents. Specifically, Google is attempting to downgrade websites that have too many hidden keywords to appear relevant. Also, the new system tries to detect junk back links that are used to increase apparent link popularity.

Google changes the system that it can better detect synonyms of search keywords. New system also puts more weights on Questions and Answers forms of websites, where web surfers can find specific answers to their questions.

Google is continuously changing its search engine algorithms, and rankings of websites changes dramatically as a result of this process. Website managers need to constantly monitor the policies implemented by Google, and make necessary changes if their websites are affected.

http://www.itnewsonline.com/news/Optumus-Analytics-Helps-to-Explain-the-New-Google-Page-Rank-Algorithms-Effect-on-SEO/26742/8/3

http://www.fortune3.com/blog/2012/01/quality-changes-google-search-algorithm-2012/

P&G has been taking a leading role in consumer product category. Its world-wide operations, however, often faces problems arising from regional differences.

P&G aims to have a better understanding about Asian consumers by appointing Miaozhen Systems (Chinese advertising agency) to take care of online marketing operations. P&G is attempting to strengthen its brand position by engaging in digital marketing, and reach consumers through mobile devices including smartphone.

The biggest advantage of digital marketing, however, is that P&G can specifically target certain demographic groups. This company tried to promote its Pantene brand in Indonesia, and because extremely successful after it started providing solutions for women’s hair problems.

It is clear that even an every-day consumer product producers cannot ignore digital marketing. Success of any marketing campaign relies on how specific marketers target consumers.

http://www.digitalmarket.asia/2012/03/pg-takes-digital-shift-seriously/

According to eMarketer, the market penetration rate of smartphone reached 46% in Canada, coming closer to 50%. In 2012, there are 10.5 million smartphone users in Canada, and it is expected to increase to 16.4 million (62% of population) by 2016. Market share of smartphone is similar in the United States, where the penetration rate reached 47.4%.

Canada and the United States, however, are not leading the market penetration of smartphone.

According to Wired News, Singapore has the highest smartphone usage rate at staggering 90%. It is followed by 61% of Hong Kong, 52% of Sweden and 47% of Australia.

Some countries, in contrast, lag behind Canada in smartphone usage. European countries such as France (30%) and Germany (28%) have relatively low penetration. Japan’s usage rate is surprisingly low at 14%, and emerging economies such as China and India have low penetration (6% and 3% respectively).

The message is very clear. When marketers are engaging in digital marketing, they need to consider the penetration rates of different devices and platforms. Without doing so, a successful digital marketing strategy from one country might result in disastrous results in an another country.

http://www.emarketer.com/Article.aspx?R=1008928&ecid=a6506033675d47f881651943c21c5ed4

http://www.wired.com/beyond_the_beyond/2011/12/42-major-countries-ranked-by-smartphone-penetration-rates/

The recent traffic ranking of major Internet websites have some names we are not familiar with. Baidu, the most well-known Chinese search engine has the 5^th largest traffic in the Internet. QQ.com, the portal website operated by Tencent, has the 10^th largest traffic. Other Chinese websites including Taobao.com (16^th), Sina.com.ca (17^th) and Weibo.com (29^th) are in the top 30.

According to the following YouTube video, Tencent has the market capitalization of $35 billion, which makes it the 3^rd largest Internet company in the world. Baidu has the market capitalization of $24 billion. Tencent provides on-line chatting services to Chinese Internet Users, and it has more than 500 million accounts.

Despite of their spectacular successes in the domestic Chinese market, none of those companies have significant presence outside of China. Taobao’s recent partnership with Softbank Japan is to stimulate China – Japan eCommerce transactions, but online transactions between two countries remain stagnant.

When I visited QQ.com and Taobao, I could not find English version of the website. Perhaps the domestic Chinese market is too lucrative for those companies and there is no need for foreign expansion. China currently has about 500 million Internet users, which makes this country to have the largest number of Internet users in the world.

Yet, if any of Chinese Internet giants wants to expand outside of China, they need to differentiate themselves from well-established websites such as Google and Facebook. In other words, China’s websites need to offer something new and innovative to be successful outside of the country. That day might not come for a while, but there is a high potential for success because of the huge home market in China.

For more information, visit:

http://mostpopularwebsites.net/

http://www.bloomberg.com/news/2012-02-21/tencent-pivoting-from-pc-to-iphone-for-china-s-online-ads-tech.html

https://www.youtube.com/watch?v=BvDVgtekW2A&feature=related

http://www.qq.com/ (Tencent)

http://www.taobao.com/index_global.php

http://www.baidu.com/

In the 21st century, most people use at least one “free stuff” on their electronic devices. People check news using iGoogle gadgets, share documents using DropBox, stay connected using LinkedIn, and talk with friends using Skype.

Then, how do those service providers gain profits? Are consumers willing to pay for services they have been enjoying for free? In the following YouTube video, Chris Anderson, an author of “Free: The Future of a Radical Price” shows how on-line service providers generate profits using “freemiums,” the word created from two words, “free” and “premium.”

According to Chris, freemium products consist of two different services: free functions, such as news feed to iGoogle gadgets and free voice calls using Skype, and small portions of paid service, such as paid news subscriptions and Skype Out. Chris claims that “freemium” business model is an inversion of traditional business model. He says, “rather than giving out 1% for free to sell 99%, you are giving 90% for free to sell 10%” (Anderson). Companies provide most of their service without charge for marketing purpose. The target is to reach as many users as possible and get them exposed to products.

If customers choose to be “converted” into paying users, companies can start charging fees.

Chris claims that customers who chose to convert are beneficial to business for several reasons:

(1)    Customers already know about those services, and they know the value of services. Therefore Converting users are more strongly convinced than other users.

(2)    Converting users are generally happier to pay for services, and they tend to stay with the same service longer.

(3)    Converting customers tend to pay more and stay price in-sensitive.

According to Wall Street Journal, the Freemium model needs to satisfy 5 conditions:

(1)    Mix of paid and free content.

(2)    You can’t charge for exclusives that just be repeated elsewhere.

(3)    Don’t charge for the most popular content on your site.

(4)    Content behind a pay wall should appeal to niches.

(5)    The narrower the niche, the better.

To Chris, it was interesting to find out that freemium providers cannot charge for mainstream (most popular) contents. Rather, companies charge for “narrow interests,” because readers of niche contents tend to be professional and they are generally price insensitive.

Chris talks about two primary examples of freemiums. He firstly refers to on-line games, where users can freely play games, but they can choose to pay for premium contents. He then moves onto social networking, where users can pay to take out banners or advertisements for their own reputation in the social media world.

The freemium marketing lets consumers use services long enough until they find a value in upgrade. Success of freemium campaign depends on:

(1)    Traffic

(2)    Sign-up and conversion

(3)    Free/premium segmentation: borderline between free and paid services.

The last condition is particularly important because if service providers give out too much, consumers do not see reasons to pay extra, but if they give out too little, users do not convert.

Recent boom in the freemium market implies that there will be more services attempting to convert free users into paid users. In order to become successful in this market, service providers need to offer enough values that users will be willing to switch to paid services.

For more information, visit:

http://gigaom.com/2012/01/29/shmilovici-freemium/

https://www.youtube.com/watch?v=ZOKcedfE_nM

QR codes, which was originally developed for industrial purposes, are now used by numerous product packages, name cards or on store displays. And some companies are trying to change fuzzy looking QR codes, at least for their own purposes.

History of QR codes is relatively short. QR code, which also called, “Two-dimensional bar-codes” was originally developed by an automotive producer in 1994 to store more information than conventional bar-codes. By having larger information storage, auto-producers could identify each vehicle on an assembly line. It was after end of 2000s, when application of QR codes expanded to other commercial purposes, including name cards and product packaging. Use of QR codes expanded significantly after smart phones became popular and general consumers gained an ability to scan those codes. Total number of QR-code ready devices has been expanding exponentially, and even Nintendo 3DS comes with a QR reader.

Marketers have been trying to communicate their messages by “hiding” them in QR codes, and encouraging consumers to scan them. Audi was celebrating its 100th anniversary in 2010, and it created the largest QR code in the world just to communicate one message.

One of the drawbacks of QR codes, however, is its boring look. Unlike the previous generation bar-codes, viewers cannot even read product numbers listed below. To counter this problem, many retailers tried to customize QR codes to show their own brands or message they want to share with consumers.

In September 2011, Ralph Lauren introduced a customized QR code to show its Polo brand. Some retailers are going further by changing the overall shape of QR, and showing radically different designs.

Furthermore, in some cases, you don’t even need to have QR codes to provide URLs! Google Goggles, developed by Google mobile, allows users to scan and search from photographs or artworks that have nothing to do with QR.

Perhaps in near future, companies will no longer use QR codes, but show picture advertisements saying, “just scan this ad.”

For more information, visit:
http://trendwatching.com/trends/12trends2012/?pointknow

When you are surfing on the Internet or watching YouTube videos, you probably encounter ads posted by auto manufacturers. They often show stylish cars cruising through forests, or families driving though dangerous roads using on SUVs.

Nissan has been struggling to find an effective way of promoting its low-end sedan, Versa. This product is priced at $10,990 in the US, making it one of the most affordable cars in North America. The low starting price, however, does not mean there is no need for advertisement. In fact, Nissan needed to effectively reach the Versa’s target segment; young and technology loving people, who spend most of their spare time either on their smart phones or laptops.

By using iAd, Nissan tried to reach consumers through Apple products that have gyro technology installed. Viewers who are watching Nissan’s advertisements can rotate their devices and get a 360 degrees viewing experience of the car. Viewers can also try some digital features of the product, and they can even change hats and shoes people are wearing.

Nissan found the iAd campaign to be more effective than previous ads for 3 reasons:

Firstly, according to Michael Awdish (Marketing Communications Manager of Nissan North America), iAd allowed Nissan to gain more customer engagements through on-app interactions. Nissan also found that customer engagement time is longer than normal on-line ads. Customers typically spend one minute or more to surf the iAd. Nissan has been trying to increase the customer engagement time because their previous campaigns saw viewers leaving too soon.

Secondly, customer click-through rate is higher on iAd than other types of ads. 360 degree viewing experience using gyro provides an unique experience for viewers, and it attracts more potential customers to the ad.

Nissan is also planning to attach QR codes on all cars in dealer lots to allow viewers customizing  vehicles on their mobile devices.

Use of gyros for mobile marketing has just started. Success of this marketing tactic depends on how consumers perceive deeper engagement opportunities. If it becomes popular, we might see a large number of people rotating their mobile devices on streets in near future.

For more information, visit:

https://www.youtube.com/watch?v=r9-QCWVriSQ
http://totalaccess.emarketer.com/Interview.aspx?R=6000564&dsNav=Ntk:basic%7cweb+design%7c1%7c,Ro:7

If you are visiting Japan, it is nearly impossible to walk around streets without encountering vending machines. Despite of recent  shortage in electricity supply due to the catastrophic earthquake in the Northeastern Japan, there are over 5 million vending machines across Japan; approximately one for every 25 people. With numerous vending machines available across the country, it is increasingly becoming difficult to make even a slight differentiation from competitors.

Over past few decades, major vending machine operators such as Coca Cola Japan, Suntory and DyDo have been trying to differentiate themselves by offering more convenient payment methods, having wider variety of products, selling both cold and hot beverages and giving discounts on private labels. With the market becoming saturated, a vending machine operator owned by Japan Rail East came up with a new strategy.

A new vending machine, which was first introduced to Shinagawa Station (Tokyo) in August 2010, categorizes each customer into different consumer groups and identifies ideal type of drink to make suggestions.

This machine has a camera and sensors that identify customers’ gender and age group, as well as current temperature and humidity of the location. Using this information, the vending machine recommends certain products out of all selections listed on a 47 inch screen. Customers can choose to buy recommended products or different items they prefer.

I first encountered this vending machine during the last summer in Tokyo. Although I was quite fascinated by the machine, I found several issues with making purchase suggestions.

(1) Inconsistency: When I was wearing a hat and stood in front of the machine, it recommended cola, but after I took it out, the recommendation changed to green tea.

(2) Unclarity: The machine does not tell why it recommends certain types of drink. In other words, customers are suggested make certain choices without knowing why!!

(3) Respect for customers: Because this vending machine makes recommendations  based on customers’ appearances, some people might get offended. Engaging in a personalized promotion means some consumers can take offers very personal.

Although I am very skeptical about the accuracy and consistency of this new technology, Japan Rail can potentially benefit from several opportunities.

(1) POP: This vending machine provides operators with significantly better Point-of-purchase marketing opportunities. With recommendations changing based on customer groups and climate conditions, machine operators can easily target different market segments using existing product categories. New machines can also show advertisements when there is no customer standing in front of them.

(2) Better perceived availability: When old vending machines run out of certain types drink, they typically lit “Out of Stock” signs. Newer machines, on the other hand, only lists available products on the screen, which leads to a better perceived availability.

(3) More marketing data: New machines can provide useful marketing data such as gender, age group and preference of customers. Collected data can be analyzed and assessed to provide more accurate product suggestions in the future.

Japan Rail East is planning to install over 500 next-generation machines by the summer of  2012. Success of this machine depends on how well operators target different market segments, and how they manage machine-customer relationships.

If you identify more opportunities and challenges, please let me know by leaving comments.

For more information, visit:

http://blogs.yahoo.co.jp/yumotoshu/2644960.html

http://www.engadget.com/2010/08/11/japan-takes-vending-machines-to-their-logical-47-inch-extreme/

http://www.itmedia.co.jp/news/articles/1008/10/news080.html　(Japanese)