Forget Big Government: How big retailers can learn intimate details about your life

Can you imagine being a teenage girl in high school who gets pregnant and having your father learn that fact from seeing coupons for baby goods in his mailbox one day? Thanks to the power of today’s marketing technology, that recently happened to a Minneapolis high schooler who shopped at Target.

The New York Times had a piece last week on what big box retail giant Target – and presumably other, similar merchants with the means – are doing to learn more about their customers. Using data on their demographics and purchase history – tracked using credit card numbers or e-mail addresses, they make educated guesses on what people are looking to buy and their marketing team can target them accordingly.

This concept of one-to-one marketing is nothing new – Amazon.com has thrived on it for years. But what made the New York Times story so interesting, as this analysis on Forbes.com notes, is how it can lead to you being targeted so specifically that details about your personal life get out to people you don’t necessarily want to know them, at least not that way.

As Forbes‘ Kashmir Hill and the Times’ Charles Duhigg describe, Target used a mathematical formula based on products purchased and even the colors of those products to calculate a “pregnancy prediction score” – a number indicating the likelihood that you’re expecting. Target’s statisticians have even developed a means of guessing how close you are to your due date. And this data can be remarkably accurate.

Duhigg reports that Target sent coupons for baby clothes and cribs to the aforementioned Minnesota teen based on her “pregnancy prediction score.” When her father saw these coupons, he angrily went to the local Target and demanded to speak to a manager, who apologized. But said father was the one apologizing a few days later when he found out that his daughter was indeed pregnant.

I don’t intent this to be a rant against one-to-one marketing. Businesses are out to make money and the more finely you can tune your marketing to the needs and desires of specific customers, the more likely you are to get sales.

But it does illustrate the power of the data merchants like Target have at their disposal. And it also illustrates the need to be careful with what information you give out.

Have any of you had an experience where a merchant started targeting you with offers based on information you didn’t want out in the public domain?

Don’t like devoting Social Media resources to Google+? You may have no choice

I’m not a big fan of Google+, the web search engine giant’s new Social Media tool. It tries to be an all-encompassing Social Media utility like Facebook while not offering anything unique that I find useful. And the numbers show that I’m not the only one who is reluctant to warm up to Google+: while a BrightEdge Survey in December found that while 61% of the top 100 brands in the United States had Google+ pages, none of those pages have more than the 65,000 fans  of Google’s page. Contrast that with Facebook, where dozens of top brands have more than 1 million fans. Ford has 5 million fans on Facebook compared to only about 27,000 on Google +.

But businesses may have no choice to devote marketing resources to this still fledgling platform. And there are two key reasons why:

1. SEO and Google’s incorporation of Google+ results into its search results

Superior page rank in web search results is critical for businesses today. Consumers increasingly are turning to the web to obtain information, and the higher you are in search results, the better the chances of consumers finding you.

Google is using this fact to its advantage by, according to Huffington Post, incorporating Google+ pages into its search results. Its search algorithm will now recommend Google+ pages for you to look at based on your search and web browsing history.

This makes good business sense for Google – by making its social media platform appear more prominently in its own search results, it can drive people to Google+ pages. Even if they don’t adopt the tool themselves (and some will adopt it upon seeing the pages), they’re still going to view the pages. And the consequence for businesses is that they then have to use Google+ – and use it thoroughly – to maximize their SEO.

2. Google’s powerful brand

When we think of web search engines, we think of Google. It is the most popular web search engine; I personally rarely use any others. But the Google brand portfolio now includes email, document storage and writing, a financial information product, a now-defunct health product and, of course, the Google+ Social Media product.

Given the size and influence of the Google brand, it stands to reason that more consumers will look to Google+ as a source of information and that adoption will continue to increase even if Google does nothing to improve the product.

In a perfect world, Google would do more to improve Google+ and use a better product to drive more adoption by businesses and consumers. But for the reasons above, consumers will flock there regardless of the quality of the product. While businesses may not want to devote increasingly scarce resources to a Social Media tool they consider to be inferior to others, reality says they may not have a choice.

Editor’s Note: This piece was originally published on Lauren Proctor Internet Marketing, a blog on web marketing strategy. Please visit this blog to see this post in its original form.

Pinterest should be of interest to merchants in 2012

I finally tried out Pinterest this week. It is the first new Social Media tool I have tried since my underwhelming experience with Google+ this past summer. But I liked what I saw with Pinterest. It has its shortcomings and its limits, but I can see why it is growing so fast. Most importantly, however, I can see some very good applications for it with merchants.

Launched in March 2010, Pinterest allows users to post pictures, videos or discussions of things of interest to them and categorize them on to boards. People can follow other users and like ones “pins,” as is the case on Facebook. But it is not an all-encompassing tool like the aforementioned Social Media giant. I would say that Pinterest is most similar to Tumblr, though the presentation is much different. And this presentation should make Pinterest of particular interest to merchants.

Users can post pictures of themselves wearing particular brands of clothes, shoes or accessories. Those following them or searching on Pinterest can see those pictures and get an actual image of how those items will look when actually being used, as opposed to simply sitting on a rack at the store or on a shelf in a warehouse. By the same extension, merchants can post pictures of a few of their items (the site’s etiquette discourages using it purely for self-promotion) likely to stimulate excitement and, using Pinterest’s linking feature (you can add a URL after initially pinning something), redirect users to their website, where they can learn more and place orders.

Land’s End went one step further in November 2011 by launching a “Pin It To Win It” contest for the Holiday Shopping Season. It encouraged users to create pinboards with Land’s End Canvas products, with the winners getting a $250 gift card. In addition to engaging its customers, the contest served to drive people to the company’s website. And this tool worked far better for this kind of promotion than Facebook or Twitter.

I like Pinterest because it has a unique purpose and serves that purpose well. My main reason for disliking Google+ is because it tries to compete with Facebook while not offering anything extra that I find useful. Pinterest fills a void in the Social Media landscape. No wonder it gets over 1 billion monthly pageviews. No wonder Land’s End Canvas called Pinterest “the social media platform to watch in 2012.” Hopefully other merchants will see these same opportunities this year.

What do you think of Pinterest?

 

 

Be careful when offering web offers and specials

When a consumer spots a brand on social media, they expect some degree of interaction with that brand. It could be an actual conversation. It could also be a special offer, either offered directly to social media subscribers or through a third party such as Groupon.

As one small business here in Philadelphia recently learned, you need to be careful with such offers. If you don’t know the risks and too many consumers take you up on the deal, you can find your business in a world of financial hurt.

Problem Number 1: Not knowing how Groupon web offers work

The business in question, Food For All Market in Philadelphia’s Mount Airy neighborhood, is a small specialty grocery/deli shop for people with food allergies. Last year, it entered into a three-month deal with Groupon allowing an unlimited number of customers to get $30 worth of merchandise for $15.

The first problem came about because the store’s owner, Amy Kunkle, got caught up in the buzz over Groupon and web offers and didn’t quite know what she was getting into. In addition to the actual discount, Groupon also took an additional $8 for each sale made using the offer. So while the deal was $30 of merchandise for $15, Food For All was actually losing $23 on each $30 sale. It was almost giving away $30 of inventory on each sale.

Problem Number 2: Too many consumers taking up the offer

According to Newsworks.org, 451  consumers used the Groupon offer during the three-month period, an average of five per day. Between the steep financial hit on each sale and the number of customers taking advantage of the offer, Food For All came out $10,000 in the red during this period.

While a major chain business could survive a hit like that, Food For All could not. And this week, it began a liquidation sale, and will soon close its doors completely.

This story is not to say that businesses should avoid Groupon and other web offers entirely. They can be very valuable for drawing attention to your brand, bringing in new customers and hopefully keeping those customers once the offer ends. But there are lessons that other small businesses like Food For All can learn from this unfortunate story.

Do your homework about web offers and how they work: Like with any communications tactic, web offers won’t succeed if you don’t utilize them properly. Make sure you do your homework before offering that great discount.

The steeper the discount, the shorter the length of the offer: Had Food For All only offered this special for a day or a week or even just on one day a week for three months, it would probably still be alive today. But it couldn’t handle the financial hit from giving away more than 75 cents on each dollar of a $30 purchase. If you want to do a big special like this, limit it to a short period of time.

Read the fine print before signing on with third parties like Groupon: This is self-explanatory. Make sure you completely understand what you’re agreeing to before signing the contract.

Consider getting insurance to protect you: When businesses run contents where they could potentially be on the hook for a large prize (such as TV game shows), they sometimes take out insurance policies to protect themselves against the resulting financial loss. If you’re going to offer a major discount that could go viral and be utilized by too many people, you may want to look into getting insured as well.

 

FDA pharma social media ‘guidelines’ leave pharma wanting

While most of us (myself included) were preoccupied with our holiday celebrations, the FDA quietly released a Social Media guidance.

Sort of, anyway.

Ad Age‘s Rich Thomaselli reported last Friday that the FDA announced new Social Media marketing guidelines for pharmaceutical companies. But the document, titled “Guidance for Industry Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices,” only covers the discussion of off-label information.

For that reason alone, it falls far short of what the pharmaceutical industry not only was looking for, but needs.

“What everybody was expecting was actual guidelines around social media,” Jim Dayton, senior director of emerging media for Overland Park, Kan.-based InTouch Solutions, a pharma-centric digital-marketing agency, told Ad Age.

“I still think it’s monumental,” he added. “The FDA finally addressed the digital channel in a specific way by mentioning Twitter and YouTube in the document, and those have never been mentioned before. But this is an industry that wants specific instructions and rules, and that didn’t happen here.”

The document provides pharma companies with instructions for responding to consumers who use Social Media to ask about potential off-label uses for prescription drugs. A thorough, complete Social Media guidance – the kind the FDA held a public hearing more than two years ago to develop – would have been far more encompassing. Perhaps it’s no wonder then that the FDA released these guidelines during the Holidays (when they’re less likely to get noticed) and did so without even a press release.

“We understand the level of interest and wanted to get out what we had available to provide guidance,” FDA spokeswoman Karen Mahoney told Ad Age. She also added that this was just “the first of multiple planned guidances that respond to testimony and comments from the Part 15 public hearing that FDA held in November 2009.”

But when will those guidances come? And why does it have to be done piecemeal? This is all the FDA could get done in 2+ years?

 

What is to come in 2012?

It’s hard to believe, but another year is almost over. Christmas is only a few days a way, and a week after that, we’ll flip the calendar to 2012.

What will happen in the year to come in communication? In healthcare? In public relations? What new technology (or technologies) will emerge? Which existing technologies will be relegated to the dustbin of history, like coin-operated pay phones? What great advances will happen in healthcare and healthcare delivery? Which organization will build a strong foundation for years to come with strong, carefully planned and executed public relations efforts? Which organizations will be tarnished by bungling their public relations, particularly in a crisis situation?

We can ask those questions at this time every year. But here are some unique ones to think about as 2011 comes to a close:

1. Will Google+ seriously challenge Facebook? I was not impressed with it when I first got on, and I still use it only rarely. But it does appear to slowly be catching on. Will it become real competition for Facebook in 2012?

2. Will organizations reevaluate and improve their crisis communication plans? We saw the tattoo scandal at Ohio State and the horrible sexual molestation scandal at Penn State – they were just two examples this year of poor crisis PR. It’s an area to which many organizations do not devote sufficient resources or planning, and they can and have paid a huge price for that. Hopefully this year’s prominent crisis PR disasters taught them a lesson.

3. Will more pharmaceutical companies get serious about social media, even with no FDA guidance on the horizon? One of my favorite reads in the area of pharmaceutical marketing – Rich Meyer’s World of DTC Marketing blog – praised Sanofi’s “Why Insulin?” Social Media campaign as an example of how pharma companies can creatively and effectively use Social Media while not running afoul of the FDA. With no specific FDA guidance likely to come anytime soon, pharma companies can and should learn from Sanofi’s example. Will they? The cutbacks to marketing that many pharma companies made this year won’t help any.

4. Which Presidential candidate will do the best job crafting and selling his/her story? Next year will be a presidential election year (the Iowa Caucus is on Jan. 3!). Which candidate will put forth the best story? Which candidate will be the most effective at selling that story? And how much of an impact will the stories told by PACs and outside groups – who were greatly enabled by last year’s Citizens United ruling by the Supreme Court – have on the election? While I do find the partisan bickering in Washington to be tiresome, I do find campaigns themselves to be fascinating, and the upcoming election will definitely be fascinating, no matter which side you want to win.

That’s all for me in 2011. It’s been an interesting year for me in many ways – finishing my masters degree, helping build a start-up pharmaceutical company into a tangible product that could attract a merger with a major pharmaceutical company and now looking for the next opportunity.  I leave you with what, in my opinion, is an underrated holiday song from an underrated movie. Happy Holidays, and all the best for 2012.

Are the obstacles to hospitals using Social Media really “myths?”

The Mayo Clinic and Ragan recently held their third annual Health Care Social Media summit. And among the presenters was popular writer and Social Media expert Shel Holtz, who debunked the myths that he says keep hospitals from utilizing Social Media.

I highly respect Mr. Holtz’s opinion, but I believe it is a stretch to call them myths. They are certainly obstacles hospitals can and should overcome. But they are legitimate obstacles.

Holtz specifically mentions the possible negative effect on workplace productivity, the risks of exposing the hospital’s networks to viruses and malware, HIPAA concerns and consuming the hospital’s bandwith. You can definitely overcome those obstacles by investing in sound IT infrastructure and putting clear guidelines in place and strictly enforcing them. Yes, hospitals can and do exaggerate the dangers of these potential pitfalls. But to call them myths is a similar exaggeration. Just ask any hospital that has been slapped with a fine and/or a lawsuit for revealing a patient’s identity on Social Media, however unintentionally.

Another reason hospitals, particularly religious ministry hospitals, block Social Media are ethical concerns. This was the case at one hospital I worked for, which is run by the Sisters of Mercy, a Roman Catholic religious order. Such institutions are not only providing healthcare, they are also doing so in the context of their religion’s principles and values. While we may not agree with another religion’s beliefs, how can we expect a hospital supported by a religion to not adhere to that religion’s beliefs?

Are there other reasons you can think of for why more hospitals aren’t using Social Media? Would you consider those reasons to be myths?

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