Week Four Journal Entry

The online marketplace in the music industry is truly an amazing phenomenon for several reasons, least of which is the time it took to develop the market. Music stores like iTunes and Amazon have taken the concept of the album and completely reinvented it by offering songs individually to users as opposed to a bundled package. This concept is truly unique and could only be accomplished via digital platform as the cost to package and distribute single tracks from every album would not be profitable.

The online platform has also presented several other opportunities to consumers that were not available before in traditional music stores. In iTunes, the user has the capability to sample portions of songs. This is a huge advantage to these online platforms in that users can now have a chance to listen to some of the “B side” tracks that do not get radio airtime but may be a very marketable piece of the album. There is no doubt that Apple and Amazon are generating more sales of their music offering by allowing users to listen to samples of songs prior to purchase, for free.

In addition to the sampling aspect, iTunes has taken advantage of crowdsourcing by allowing users to comment on artists and music in addition to sharing the popularity of tracks in the iTunes store. This information is readily available in the store and can help consumers make decisions about tracks that they are looking for, what is popular and what their peers think about the music. iTunes as also taken the crowdsourcing to another level in that on the artist pages in the iTunes store, Apple not only lists the offerings from a particular artist but they also list top songs from that artist, videos related to their music but more importantly they list what other listeners also bought. Often this list is composed of music from the same genre performed by similar artists. This information is easy to leverage as the store is already accumulating this information but it also helps consumers broaden their pallet of what they like while also helping Apple generate more sales with minimal additional effort. Such tasks would be nearly impossible in a traditional music store as albums were often cataloged alphabetically. Sometimes albums would be categorized by genre and then alphabetically, but even then a traditional music store does not have the capability to flex the index of music that it is offering where as online store can flex this information with ease and minimal cost.

Building on the iTunes store, Apple has been able to put point of purchase in the hands of their consumers with iTunes stores available on mobile devices like the Apple iPhone. With developers constantly creating applications for the iPhone, there are numerous ways to engage consumers with these devices and drive them to a point of sale. The iPhone application “Shazam” is an excellent illustration of this concept. This application has been developed to allow the user to launch the application, hold the iPhone close to a speaker that is playing a particular song and the application will listen to the song for a brief moment. Once the application has listened to the song it then takes that audio excerpt, analyzes it and determine what track was played and what artist was performing it. From there, the user is then presented with several options to purchase the track, save it to a list or share it with a friend. This unprecedented point of sale in the hands of the user at all time is revolutionizing the industry. It has also overcame a hurdle that consumers often experience when thy here a track but to not know who the artist is or what album the track is on. The digital storefront for music will continue to innovate and push the limits with regards to copyright law and what artists consider to be acceptable distribution of their music.

Apple iTunes is truly embracing the digital marketplace and integrating it across all platforms.

Week Three Journal Entry

Application of the long tail theory is extremely noticeable in key word advertising in the large search engines such as Google and Yahoo!. Key word advertising is an interesting marketplace in that it is an auction for keywords. Keyword advertising can be an expensive prospect for many of the same reasons that purchasing TV or billboard media can be expensive. Broad terms are searched on more often the specific key terms, often those found in the end of the long tail. A key word such as “handbags” will likely have a high auction rate because of the frequency that users search for handbags. Advertising on this keyword may be very expensive because users may often click on the term but if they do not find what they are looking for when they get to your site, the advertising expense has been accrued but the transaction did not take place.

I think that examination of the long tail in the key word advertising field is really making companies and their agencies take a hard look at what they are trying to sell, to what demographic and what attributes of their product differentiate it from their competitors. Research and understanding of the analytics behind keyword searches is critical to maximize your online spending. The long tail can be a very powerful place to spend money because the users that are searching on these key terms are more likely to have an understanding of the product genre and will be more likely to convert into a purchase or drill deeper into your site form more information.

Our society seems to be becoming more of a society of customization and specialization. As we studied last week, much of this is coming from the actual consumers as they are now being sourced by corporations to help develop and specialize products. This specialization and customization lends itself to the long tail where more unique products and services may reside. Getting users to these products is now more practical than ever before with powerful search engines indexing billions of pages of content.

The pharmaceutical industry uses the long tail logic in search engine marketing extremely well. There hundreds of drugs on the market that address cancer symptoms. Marketers need to be able surface their content on very specific key terms to ensure they are getting the most from their keyword search dollar. Terms in the long tail are often more specific about the treatment, type of ailment and type of remedy being sought. These key terms are more likely to have lower prices because they are not as heavily searched on so the cost per click will likely be lower. This gets right at the point illustrated in discussion in that less people may be searching on these specific terms but those that are, are more likely too perform the action that you attracting them to do. Whether that is product purchase, requesting for more information or requesting a sample of the product. These are the users you want visiting your site and you are more likely to attract them by investing dollars in strategic key research and analysis and then advertising on those terms that have been identified. From there, you need make sure your site is easy to navigate, accommodating and containing useful information. These are topics for another day!

Week Two Journal Entry

OK, so I am going to purchase the book Crowdsourcing. The introduction that I read this week was fascinating and I feel extremely excited to read this book given that it seems as if we are right in the middle of this movement that is ever changing. Years ago I struggled to understand the open source movement, particularly in the software development world because I could not understand why individuals would contribute to something like Linux of Mozilla without being compensated. As the movement has progressed I now understand the true sense of community that is created and how such collaboration can be rewarding and inspiring, and in some cases compensated.

Crowdsourcing has already become a very powerful tool in digital marketing. Creating a platform to allow users to submit their own, personal touch on traditional products creates a sense of customization and uniqueness that can truly mobilize the consumer and garner interest in a particular product or service. At my agency, we launched a program for Clorox called “Redesign Clean” (http://www.redesignclean.com/) which solicited consumers to submit designs for a new Clorox wipe. This program engaged the community and also created awareness about the product launch. By creating a contest that allows users the ability to customize the box, what was normally a sterile container for wipes now has a unique design look and feel to it and is something consumers would like to have on their counter.

Similar contests have taken place recently to motivate consumers to demonstrate their design capabilities and show off their talent. Jose Cuervo 1800 tequila (http://www.1800tequila.com/) conducted a bottle design contest where artists could submit their designs online for the wrap on a tequila bottle. The application used is very cool in that when your artwork is submitted, it is rendered on the bottle as it would appear if produced. A $10,000 prize was offered to the winners of the contest and the bottle would appear in a national advertising campaign. This program was a great success because the “crowd” is being utilize to bring design elements to the bottle (not changing the product contained within), information about Jose Cuervo products is being surfaced to the many visitors coming to the site and information about the participants is being captured and helps Jose Cuervo better understand their target demographic.

Utilizing the crowd is a fascinating way to engage the community. As mentioned in the introduction to Crowdsourcing, you do not have to be a an expert in a particular field to contribute to the knowledge base being developed and users feel a sense of empowerment by participating in these communities. Hopefully when I fulfill my obligation to my MBA, I will be able to find some time to become active in the open community!