Adobe Honing in on Your Location

What's Going On?

One of the hottest new marketing crazes out there is location based marketing. Being able to market to someone when they reach a certain area in a mall, or in a city, or where ever they may be. Location based services are great because for one it increases a consumer's impulse buying habit. If you're walking by the Ralph Lauren store in the mall and you get an email on your phone for a coupon or a sale going on in the store, you're more likely to go into the store and end up buying something. All the consumer has to do is walk past an iBeacon and they'll receive promotions straight to their smartphone or mobile device. 

Location based services also capture the right targets. The message is going out to the correct people. Again using the Ralph Lauren example, you can send out a mass email to email addresses that you have acquired through doing business with these people, but you're never really sure that they're going to be close enough to a store to be able to take advantage of the promotion. With the help of a location based service aiding a company, they can target the people who are already within close proximity to the store and can easily take advantage of the sales or coupons or whatever the company is doing. Another great thing about location based marketing is that it's often personalized one-to-one marketing that remembers what customers have already shown interest in. It's like what companies such as Amazon do when you're on their sites. My final point about location marketing is that it is convenient for people to redeem their offers at the store. Customers are mailed either an alphanumeric code that they can recite to the cashier, or they receive a barcode that can be easily scanned in at the time of purchase.

iBeacon

What Adobe is now offering in its Marketing Cloud suite is the opportunity for marketers to reach consumers using location based messages within applications that are on the user's device already. Adobe then plans on using the location to later integrate into marketing campaigns as a way to target people directly.  This new update to Adobe's Marketing Cloud suite includes a number of ways in which a marketers can reach consumers right on their phone. A couple of the key updates are:

• In-App Messages
• Mobile Campaign Management
• Mobile App Management
• Mobile Search Advertising
• New Adobe Social App

To read a full description of the new updates, visit Ben Kepes article on Forbes detailing all of the changes. Being able to market directly to a person's phone is arguably the future of mobile marketing. Sure texts and emails are effective, but not nearly as effective as something that can reach you in any app that you're using, and be able to pull your attention away from whatever you're doing at the moment. We've become glued to our phones and we always have our faces buried in them anyway; so this is the most logical step in advancing mobile marketing.

Sources used for this post:

http://www.forbes.com/sites/benkepes/2014/11/18/adobe-embraces-location-based-marketing/

YouTube Music Key to Downing Spotify?

The Newest Music Streaming Service

As if you needed another website on the Internet that allowed you the stream music. We already have: Pandora, Spotify, Deezer, Slacker, and Rhapsody just to name a few. The new YouTube Music Key will work straight from the already existing YouTube app, or if you're on your laptop from the same URL that is currently live. Normally when people are listening to music through YouTube they get to listen to maybe one song or two songs without hearing an advertisement, but there will be an advertisement unless you're using an ad blocking software. The new Music Key will allow users to stream music without having to listen to ads and stop the party from going. And before you ask the question, yes, Taylor Swift's singles will be on this platform so you can take a sigh of relief and shake it off. 

The main reason that it might take users away from services from Spotify, is the price point; and the fact that Taylor Swift is not on Spotify anymore. Currently, Spotify offers two levels of service. Spotify uses a freemium pricing model which offers users either a free or a premium version of their core product which is being able to stream your favorite songs. Often with freemium websites the ratio of free to paid users is as low as 1% and the cost to serve the other 99% users using the free product is often negligible. In May of 2014, Spotify had announced that of its 40 million users, 10 million of them were paying to use the premium product at a cost of $9.99 per month. 

It'll be interesting to see whether or not YouTube decides to offer a freemium model the way that Spotify and Pandora already do, or if they'll just offer their product in its premium form. I could easily see the free version of this product being the way that it is now. You try and listen to your favorite Justin Timberlake song and before you can, you have to listen to a quick thirty second advertisement for Turbo Tax or Progressive Insurance. Personally, I have a Spotify account that I'm currently paying $9.99 a month for. If this new music streaming turns out to be better than Spotify is then I might consider the switch seeing as though the price is listed at only $7.99 per month. It's important to note that the app also works even after locking your phone. Currently on the iPhone, if you try to listen to a song on YouTube and lock your phone, then the song will stop playing which is very inconvenient. Since the product is still in beta it's hard to say how the final version of the product will look; right now it doesn't have a button for going backwards in your playlists.

Sources used:
http://pando.com/2014/05/21/as-spotify-hits-10m-paid-subscribers-heres-why-paying-customers-not-ads-will-save-the-music-industry/

A Snapshot at Snapcash

Snapcash

In keeping with the theme of my last post which was about how Domino's didn't need to create a voice ordering function in their app; I have found another app that probably shouldn't have introduced a new feature. For many, Snapchat is the app that you use to send stupid pictures of yourself to your friends. These pictures are deleted from your friends' phones after a certain amount of time. Of course this app isn't used for just taking pictures of your face, and this leads to a lot of controversy when these photos of things other than duck faces are leaked onto the internet.
The idea of using Snapchat to send money to your friends is something that sounds great in theory. Snapchat, which has an estimated user base hovering around 70 million according to Business Insider. The app is also priced somewhere around $2 billion. That's a lot of money for an app that people primarily use to show what they're doing at that exact moment. Now, Snapchat's value is probably going to skyrocket with an influx of users going to it to now pay their friends.

Rationale

I can see why this Snapchat thought that this was a good move. Personally I use an app called Venmo. This app does pretty much what Snapchat is going to do, which is being able to pay your friends over an app. I use this mainly so that I can charge my roommates for things like gas, electricity, cable and internet. As I mentioned before, Snapchat has already been downloaded roughly 70 million times, so there is already a considerable amount of people who are using the app. Adding this new feature means that people don't have to download another app entirely in order to transfer money to their friends; everything is all right there, conveniently on Snapchat. So what's the problem?

Well Snapchat has been hacked before. Millions of private photos and videos have ended up all over the internet for everyone to see. I know what you're thinking, "but how can that be? Don't all of the millions of videos and photos get deleted right after the ten second limit?" Well that's where the fun starts. Turns out, Snapchat was keeping all of your photos and videos after all. In fact, in May of this year they had to settle a charge with the Federal Trade Commission which claimed that Snapchat was deceiving its consumers by telling them that their messages would be deleted. Why should I trust my money with an app that has a propensity for being hacked? I don't want my bank account ending up on the internet with the millions of duck faces that teenagers are taking. It sounds like a great idea to have all of your social needs in one place. You can take a picture of yourself, update your story, and then pay your friends for picking up your drinks at the bar all on one app! 

I personally will not be syncing up my bank account with Snapchat; but hey, maybe I'm being too paranoid about the lack of security that the Snapchat servers have. Maybe I'll be proven wrong and I'll have to uninstall Venmo and switch everything over to Snapchat if everyone else is using it. Then after that, I will probably reply to all of the Nigerian Prince emails in my junk inbox since I clearly don't care about giving my personal banking information out to people whose servers have more holes than a wheel of Swiss cheese. Of course, I could end up eating my words but who knows. 

Sources used in this post:

http://www.cnn.com/2014/01/01/tech/social-media/snapchat-hack/

http://www.businessinsider.com/snapchat-app-downloads-statistics-and-data-2014-5

Voice Ordering on Your Phone: A Revolutionary New App

Domino's Pizza App

There's good news for those of you out there who are fans of the scalding hot disc of cheese that Domino's calls a pizza. Thanks to the new and improved Domino's app, you can now order a pizza using voice ordering! The voice of the new app, Dom, acts in a way similar to Siri. You tell Dom that you would like to order a pizza and then he helps you with the steps almost as if you were ordering a pizza over the phone. But since this is the year 2014 and calling is almost an afterthought function of our cell phones, Domino's has created the voice ordering capability to keep up with the times. Domino's has created an app where you're able to talk into your phone and order pizza, because dialing dialing the number was a task just a little too complicated to the average American consumer. 

Strategies Used

In all seriousness though; Domino's is using the mobile applications strategy that we talked about in class. Mobile apps could include game apps as an example or utility apps. Utility apps are very specialized and can only perform a couple of tasks, just like our Domino's app. After I downloaded the app, I saw that there were only a couple of things that I could do on the app. Dom, the personal assistant for the app, does make the app a little more of a complex utility app. So why would Domino's create the app? It comes down to a matter of convenience. From Mobile Marketer's, "Classic Guide of Mobile Commerce," case studies of other companies has shown that creating mobile apps where the customer can shop has increased sales considerably. The guide gives two examples of companies who have used this strategy successfully: OfficeDepot, and StubHub.

The tool that Domino's is trying to focus our attention on now in their advertising is the voice ordering function. The typical use of voice is to allow for users who are less tech savvy, an opportunity to be more engaged. After downloading the app and speaking with Dom I realized that I was having some technical difficulty getting Dom to order me a pizza. I don't consider myself to be extremely knowledgeable in technological terms, however I do think that I can operate an app better than an old person. I should note that while I was using the app I didn't dig around enough to see whether or not they were offering coupons for their food through the app in a way that similar apps like GrubHub do.

Goals for the App

The goal of the app is pretty simple; try to get people their pizza in the easiest and the most convenient way possible. I commend Domino's for what they're trying to do with their app. I think that they saw how smartphones have moved towards having these personal assistant like the iPhone's Siri and Microsoft's Cortana, and tried to capitalize on the convenience that people were gaining from them. Like I mentioned before I'm sure that one of their main goals was to try to increase the number of sales in Domino's pizza the way that StubHub and OfficeDepot had seen increases in sales from their mobile apps. 

Domino's could have been trying to increase the number of people to use their Domino's app. After watching football for the past couple weeks and seeing their commercials for their app it made me curious. I became curious to the point that I actually ended up downloading the app and trying to see how responsive Dom was to my voice. If their goal was to get people to download their app, well it sure worked on me.

Finally, I think that their third goal for the app was to make sure that the fans of their style of pizza would remain loyal to the brand. Domino's is the second largest pizza chain in the United Staes with gross sales roughly $4 billion lower than the top selling pizza chain, Pizza Hut. Domino's probably doesn't want their customers sneaking off to try whatever Pizza Hut is cooking up in their kitchen, so they lure them in with the convenience of technology and the curiosity that enticed me to try their app. 

Evaluation

I think that it will be interesting to see how well Domino's sales does after introducing Dom. We should also look out to see if others like Pizza Hut or Papa John's tries something like what Domino's has done if they start to notice a slight dip in the numbers. I can see why Domino's thought that this was a good idea, but I think that they didn't ask themselves whether or not they should. I find it much more easy and convenient to be able to type in exactly what I want on apps like GrubHub instead of having to hope that Domino's app can understand what I'm trying to order. The reviews of the app that I've read on Apple's App Store have all seemed to really enjoy the app as it has a four out of five star rating from customers. Many of the reviews center on the availability of coupons and not the voice functionality, but I have to imagine that they've had better success than I did when using it. Overall my impression is that the voice ordering is a fun new way to order pizza on your phone, but then again you can use your voice to actually call someone; you know, and actually use the phone for the purpose that it was originally designed for. While the commercial did show the app almost having a conversation with the man, I could not get Dom to do the same for me in my limited amount of time spent with him. My lasting impression is that this is not really anything but a cheap gimmick that Domino's has created that will ultimately end up in a lot of people downloading the app to see how unnecessary voice ordering is on an app when you can easily do a voice order using your phone's most basic capability.

skip ahead to 1:34

Sources used:
http://www.pizzatoday.com/departments/features/2013-top-100-pizza-companies-list/
https://sakai.ithaca.edu/access/lessonbuilder/item/225890/group/37b46def-e3c8-4bb5-885d-19fdce7bbbdc/Mobile%20Marketing/Mobile%20commerce%20guide.pdf

Sirius XM in Some Sirius Trouble

What Happened?

Sirius XM is a company that provides satellite radio in the United States. As of 2013, Sirius has had as many as $25.6 million subscribers. Of course we know all of the details about Sirius XM radio as I'm sure that most everyone know what it is, or has Sirius XM radio in their car. What's great about Sirius XM is not only that they offer commercial free radio and a wide variety of stations; but often times they play recordings from live events. Over the summer you can tune into their Alt. Nation channel and hear live festivals. This year they had a stream going of the Governor's Ball which was hosted on Randall's Island in New York City. It's recordings like these that have landed Sirius XM in a bit of hot water.

This group of goofy looking gentlemen are know as, The Turtles. The Turtles are a group that was mostly popular in the mid to late 60's and wound up disbanding in 1970. Now that name might not ring a bell with most people born after the 1970's but chances are you've heard their hit song, "Happy Together." It's been featured in countless movies and commercials throughout the years. So why is Sirius in such hot water? As I mentioned before in this paragraph, the Turtles were a band from the mid 60's and early 70's. The tracks that were recorded by the Turtles predate the Copyright Act of 1976. Sirius did not seek to claim a license for playing those live tracks from the Turtles and also had no intentions on paying the group royalties. 

"Happy Together" - The Turtles

In retaliation for using their songs without permission, The Turtles filed class-action lawsuits in three states (NY, CA, FL) against the satellite radio behemoth for $100 million dollars. If you're wondering what Sirius XM's revenue was for 2013 like I was, it was $3.8 billion. That $100 million is still a large chunk of change to any company and is nothing to be scoffed at. In the wake of the result of the lawsuit other groups have come forward and have filed lawsuits against Sirius XM and Pandora. According to the New York Times, SoundExchange, which is a digital performance rights agency that specializes in the music industry, is promoting a bill named the Respect Act which will require digital music services to pay royalties to recordings prior to 1976.

Is it Wrong?

From the New York Times article about this case it sounded like Sirius XM had no intentions of paying The Turtles for using their recordings of live performances. It does seem like one of their DJs might have made an honest mistake seeing as though they play recordings of live music and live music seemingly all the time. Sometimes you can even tune in and hear a couple of live recordings of Beatles tracks if you find the right stations. Will Sirius XM see it as just an honest mistake? Probably not, they probably fired the DJ responsible or someone else who should have been overseeing the DJ and should have known better. This is kind of a grey area in terms of ethics. Since the Copyright Act of 1976 didn't go into effect until after The Turtles were done performing, does their work still apply?

I would argue that they do have a right to claim the lost royalties from groups that are playing their music without proper licenses. There were some great artists before 1976 that didn't receive their proper royalties because of the way that groups like Pandora and Sirius XM have interpreted the law. The way that they see it is that they don't have to give royalties of pay a licensing fee to groups that released music prior to 1976. This includes recent Rock and Roll Hall of Fame inductee Cat Stevens. Take his Cat Stevens' song, "Wild World," for example which was recorded and released in 1970. In the minds of Pandora and Sirius XM, they can play his song without having to pay Cat Stevens. However artist Garth Brooks, who recorded a cover of Cat Stevens' song does require royalties since his version was recorded after the Copyright Act of 1976 was passed. 

While I do think that I side with the musicians in this case, not only because The Turtles and Cat Stevens are great artists, but because they have a legitimate reason to be angry with music distributors like Pandora and Sirius XM. What Sirius and Pandora did might not have been legally wrong since they were following a loophole in the law; but it surely is not an ethical decision. It seems like this has become a common practice on the part of music distributors since The Turtles aren't the only ones trying to sue these two companies. The problem is though that the ruling made which granted The Turtles $100 million dollars was only a state level ruling. Hopefully with the passing of the Respect Act, older groups will be able to collect their payments that they deserve. Then maybe the two sides can live, "happy together."

Links to articles used for blog post:

http://www.billboard.com/biz/articles/news/digital-and-mobile/6042278/why-rock-hall-inductees-are-not-getting-the-royalties

http://www.nytimes.com/2014/09/24/business/media/sirius-xm-loses-suit-on-royalties-for-oldies.html?_r=0

http://www.soundexchange.com/?s=Respect+Act

LinkedIn's Freemium Pricing Strategy

LinkedIn is a social networking service that mainly targets business-oriented users. It was co-founded in 2002 and launched in 2003 by Reid Hoffman and other founding members of PayPal. Today, LinkedIn is traded publicly on the New York Stock Exchange under the symbol LNKD. Since its launch, the site has enjoyed an estimated two new users per second resulting in their network of over 300 million users worldwide.

What They Offer

LinkedIn offers people the opportunity to create their own professional profile and create connections to people that they may have worked with via a social network much like Facebook. Users can post photos of themselves, see who has been viewing their page, save job postings that they would like to apply for, and follow companies or professionals that they are interested in. As of 2013, LinkedIn has more than 300 million users that are located in over 200 countries and territories. Due to the growing popularity of the site internationally, LinkedIn has adapted and is now offered in twenty different languages including: English, French, Spanish, German, Tagalog, and Malay.

Anderson's Taxonomy Model

Chris Anderson explains in the article, Free! Why $0.00 Is the Future of Business, that the definition of freemium which was coined by Fred Wilson is, "What's free: Web software and services, some content. Free to whom: users of the basic version." Businesses who decide to use the freemium pricing strategy usually implement it using a tiered system. These tiers usually range from the lowest, free, to some form of, "pro" account or executive level account. One thing that is common amongst websites that utilize this pricing strategy is that the ratio of paying users to users using the free version of the website is low; as low as 1% in most cases. LinkedIn offers four different tiers to their customers, with the majority of its users opting for the free package.

If you're anything like me, then you didn't actually know there were paid accounts for LinkedIn. Which led me to believe that maybe there are other sites that are doing a better job at creating a professional network with more features, but that also costs money. What I soon found out was that LinkedIn is actually leagues ahead of the competition in terms of number of users. Viadeo, which is like LinkedIn but French, only has 50 million users. The only other competitor is XING, which is a German version of LinkedIn has roughly 10 million users. Even though the vast majority of LinkedIn users are only using the free version, it doesn't seem to matter because their user base is so much larger than their competition. This undoubtedly attracts bigger businesses to the site to look at the larger pool of potential candidates.
That's all well and good, but does it mean that they're actually making more money than their competitors XING and Viadeo? LinkedIn in 2013 reported $1.52 billion in revenue compared to XING which reported $70.1 million in revenue and Viadeo which in 2009 reported $40 million (I wasn't able to find more current data for Viadeo on their current revenue). LinkedIn is clearly doing well for themselves based on their number of users and their financial strength. Just to pour on some more data here; LinkedIn is the 10th most visited website in the world according to the Alexa rankings of the top 500 global websites.