Tag Archives: consumer

1st2c CGM Report: Wii Triggers Social Commerce

 

Social Media sees the development of digital consumer-to-consumer trade

Social Media is already challenging the hegemony of commercial media, but has it already begun to incubate a challenge (or an opportunity) for commercial trade?

This holiday season saw the age old phenomenon of Social Trade being energized and re-shaped by Social Media has been spotted in the game console market. The lively consumer-to-consumer trading of Nintendo Wii consoles was a vivid example for how Social Networks develop as an alternative (or a parallel) to online commercial trade channels.

The Nintendo Wii case suggests the (re)-emergence of Social-Trade-over-Social-Media as a market force to be reckoned with and managed.

 

Wii redefines consumer “must have” behavior

Nintendo Wii has already been widely celebrated as one of the mega-hits of the 2007 holiday season.

Fueled by media publications about supply shortage, thousands of desperate consumers reportedly skimmed store shelves and turned to online commercial outlets like Amazon and eBay, willing to pay even a premium price of $600 per Wii console.

(http://techland.blogs.fortune.cnn.com/2007/11/30/even-at-600-the-wii-is-a-must-have-gift-this-season/)

 

No wonder that below market surface determined consumers turned to Social Media networks not only to find the prized console but also to buy and sell one.

1st2c tracking system picked up a significant increase in volume of posts in social networks during the holiday season, offering Nintendo Wii for sale.

 

Table 1: Volume trend of posts referring to Wii for sale

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Overall number of posts on Wii (21,140) is impressive in itself. Additional terminologies used for with the same intention increase the post count even further.

The surge in offers for selling Nintendo Wii consoles started mid-November and stayed at above normal levels throughout the holiday season, with fluctuations triggered occasionally by both online and offline media publications.

The vast majority of the posts seem authentic, though it is not unreasonable to assume that some were placed by traders masquerading as consumers.

Regardless of who placed the offerings, the most important insight is about the emerging use of social networks as social trading platforms.

Nintendo Wii is just one example for the developing phenomena of Social Media platforms becoming Social Trading platforms.

 

 

Social Media also active as secondary market

 

The case on Nintendo Wii refers to new products traded via social platforms, but what about used (second hand) products?

Recent projects we have done in the mobile communication market identified a very active scene in Social Trading of used handsets.

Typically, first and second tier mobile users are offering their old handset for sale on commercial online trading platforms like Ebay. But the Social Networking platforms are already featuring the same function driven by consumers themselves.

What Social Media offers to these grass-roots traders is a highly segmented shared-interest audience and a highly trusted environment.

On the macro level, Social Media offers a very efficient market driver:

For some types of consumers it lowers the barriers of migration to next generation handsets by offsetting the costs against the resale value of their old handsets.

For other consumers it allows entry to mobile communication.

 

The threat and opportunity in Social Commerce

 

Social Commerce grows and is likely to continue to develop.

For many marketers, Social Commerce poses a threat since it bypasses commercial trading platforms with established trading and promotion infrastructure.

The more consumers shift to social commerce the less control marketers have on what is being offered, how it is being offered and the entire marketer-consumer relationship that follows.

On the other hand, Social Networks can potentially act as market catalysts. They may eliminate availability barriers (a consumer in Timbuktu can make a product available to a consumer in New York). They may accelerate purchase cycles – especially with more costly products (now it’s easier for early adopters to migrate to next generation products but selling the older product they have). They may provide more people more access to a broad variety of products. They facilitate the power of buzz.

Can and should marketers try to manage Social Commerce?

They may have to.

As Social Networks acquire an increasingly critical role in the driving market behavior it becomes a question not of If but of HOW.

Isn’t it another dimension to Social Marketing, guerilla micro-marketing online buzz agents?

The right models will need to account for the new rules of engagement in the networked market (see our pervious case studies).

Interestingly (and perhaps expectedly) we have found Social Trading to sprouting with premium positioned brands. Aspirational brands in diverse markets such as apparel, cars and consumer electronics are already developing Social Commerce.

From both marketing and reputation management considerations, marketers of such brands may benefit from tracking and perhaps also from creating a model for managing online Social Commerce.

 

1st2c in a nutshell

1st2c (www.1st2c.com) is the home of online Online Strategizing Research©. It is the most comprehensive data-to-strategy methodology in the networked market.

Online Strategizing Research© creates a vivid picture of live market mindsets and behaviors and identifies actionable insights and opportunities.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

 

Ofer Friedman

Chief Research & Client Officer, 1st2c 

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The Consumer Generated Music Video

 

The early 80’s introduced the music video to the masses via MTV. The music television channel was the first station to offer 24 hour-a-day music videos to the masses. The music industry embraced the music video concept and started pumping videos on a weekly basis. The successful adoption of cable TV by US consumers and the development of relatively low cost and easy to use video recording/editing equipment were the catalyst that made MTV and the music video in specific very successful.

As the popularity of the music video grew so did the cost of making them. Music videos seemed to outdo one another by increasing production costs and special effects. The growth and popularity of music video caused their budgets to increase and resemble a major motion picture operation. In addition, by 1992 directors of music videos were getting recognition and their names were being listed in the song credits.

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photo by Rob Lee

The internet boom, in particular the growth and popularity of videos being viewed, rated, and uploaded onto internet platforms such as Youtube and Metacafe have caused a major shift in consumer viewer ship and interaction. Consumers can now choose which music videos they wish to view, rate , and write commentary about them.

In addition, consumers have become producers of music videos themselves. Todays youth have access to tools needed to create their own music video. With the help of a camcorder, computer, and some basic editing and internet knowledge anyone can produce a music video. This form of consumer generated media (CGM) has become extremely popular among todays internet savvy youth and should be taken noted by the music industry.

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photo by Rob Lee

Some of the top videos on Youtube were produced by consumers. A great example of a consumer generated music video can be seen below. The producer of this music video used a song by Daft Punk and their bare hands in order to create this CGM masterpiece that was viewed by 11,884,528 people on Youtube. The name of this music video is called Daft Hands and was produced by FrEckleStudios.

The music industry will not stop producing music videos in the near future. Instead the music industry should encourage this CGM movement and find ways to collaborate with it and embrace the content that the consumer is creating for the music label. The benefits of using CGM are threefold:

1. Low production costs

2. Provides consumers with positive feedback and encourages them to continue creating original content for the music label

3. CGM content is viewed by other consumers as not being tarnished by corporate agendas and has a stronger “word of mouth” effect

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photo by coey.kerr

Overal, embracing consumer generated content will assist music labels in promoting their music and increasing its reach to consumers in a effective and economical manner.

Martin Fuchs

CGM analyst/planner

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1st2c CGM Report: The Michael Vick Case Study

When the publications linking Atlanta Falcons star Michael Vick with alleged illegal dog fighting exploded in the media it wasn’t much of a surprise that, in the age of players standing out as culture heroes and role models, the issue will have negative implications for Vick’s reputation.

But the big question for sports industry crisis management professionals was to what extent this will have collateral effects on his team and the National Football League as a whole!

1ST2C, an online CGM research and consulting company and home of Online Strategizing Research©, looked at this case study as an opportunity to better understand the dynamics of crisis detection and crisis management in the networked market reality.

1st2c analysts followed up on online resonance across Internet’s communities on the affair before, during and after the strom’s eye.

Volume of Mind-Sharing Posts on “Key Players”

in The Michael Vick Dog Fighting Affaire

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Consumer mind sharing activity points very clearly at a highly alert and responsive broad fan base.

Mind-sharing volumes surging far beyond “regular” levels are a clear indication of an “Alert situation” in 1st2c methodology, especially as higher-than-normal levels maintained over a week-long period. However, level of resonance gradually decreased after the first days indicating the loss of crisis momentum (for reasons subject to a different analysis).

As for the issue of “collateral damage” to Atlanta Falcons and the NFL.

Interestingly, while the NFL was “dragged” into the public discussion Atlanta Falcons were much less a “side to the issue” in terms of volume of talk “shadowing” that of Michael Vick’s.

Analyzing mind-sharing on the issue revealed a critical insight on consumer psychology (or rather fan psychology).

It appears that involved fans were separating between “personal moral” and “sports moral”. While the episode stirred controversy on the personal moral level it was not perceived as indicative of the team’s culture of sportsmanship. Actually, the Atlanta Falcons were perceived as victims of the situation rather than having anything to do with its facilitation. This psychological “framing” of the situation not only shielded the Falcons from snowballing popular resentment but also encouraged their fan core to “spring to their defense”.

As for the NFL, it’s visibility was associated with it’s proactive management of the situation and the affair’s overall development (like Nike’s endorsement suspension). Like in the case of the Falcons, the NFL too was not “held blame” for the happenings.

As for Nike’s part, that’s a subject to different analysis.

Crisis management insights

1. “VICTIM FRAMING” IS A POWERFUL THREAT NEUTRALIZER

2. DETACHMENT FROM CORE INTEREST (FOOTBALL) HELPS AVOID “CONSPIRACY THEORIES”

3. PROACTIVE MEDIA RELATIONS INITIATIVES MAY CREATE ATTENTION BUT SUCH ATTENTION WILL NOT “AUTOMATICALLY” CARRY ADVERSE LINKAGE (i.e. A CRISIS SITUATION IS AN EMPOWERMENT OPPORTUNITY FOR VICTIMS)

1st2c will continue to monitor the market and provide insights for better understanding and engagement of the networked market©.

1st2c in a nutshell

1st2c was established in late 2004 as a full service Consumer Media research and strategy powerhouse by internet and brand strategy veterans with extensive international experience.

1st2c is a forerunner of the Online Strategizing Research©. This strategic planning driven research provides vivid market pictures, in-depth understanding of market dynamics and seamless transfer of insights and opportunities to actionables.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

Details: www.1st2c.com

 

Ofer Friedman

Chief Research & Client Officer

1st2c

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Blu-Ray vs HD-DVD Case Study: Online mind sharing tell the consumer side of “the stalemate” story

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Consumer generated media (CGM) is providing marketing professionals tools to better understand consumer mindset and behavior. I have attached below a case study conducted by our senior research officer Ofer Friedman and myself, in which CGM analysis is used to understand consumer behavior and mindset in regards to the high definition format war between blu-ray and hd-dvd.

Martin Fuchs

1st2c market analyst/planner

It happens once in decades. A new digital storage format is introduced, taking consumer entertainment to a whole new level of audio-visual experience. A new format ends up changing how information and entertainment are produced, played and stored, and that is a big odds game with huge business implications.

When new generations of computer micro-processors are introduced it would typically be two competing products launched almost simultaneously by Intel and AMD. In the micro-processor case consumer choice is relatively easy because both play all programs with little performance differences. By contrast, consumers have always needed to decide between alternative digital storage formats since developers typically secured exclusivity for their format with hardware (player) makers and content producers. In the early 80s it was JVC’s VHS vs Sony’s Betamax. If you had a VHS player you couldn’t play videos that were available in Betamax format and vice versa. This meant that consumers “voted with their wallet” in favor of one of the formats (thus encouraging content producers to channel product variety to that format). Investing in a new player meant risking choice of a player with inferior content variety. That is why new format generations trigger a “format war” as developing companies make every effort to drive decisive consumer patronage of their format.

This time, at the age of high-definition, it’s Sony’s Blu-Ray vs Toshiba’s HD-DVD optical disk format. The “war of high-definition formats” has been waging for almost two years now. Both Sony and Toshiba invested heavily in marketing, sales promotions, and strategic alliances with content providers (such as with movie studios). But as the 2007 holiday season is nearing, the “war of formats” is at what has already been labeled as “the stalemate“.

1st2c has looked into the consumer side of “the stalemate” and discovered that online mind-sharing provides a surprisingly accurate diagnostics of the dynamics of the “war of formats”. 1st2c Online Strategizing Research© discovered a much more cluttered consumer worldview and saw an underlying uncertainty about the future of digital storage as a whole. Emerging market dynamics suggests a need for new models for positioning and marketing of high definition players.
More than “another” war of formats

How consumers react to the two formats? What drives their attention? Why marketing initiatives delivered only short term impact? These questions are being answered by hundreds of thousands of involved consumers engaged in online mind-sharing.

1st2c’s deep web monitor provides visceral understanding of the dynamics of the unfolding “war of formats”.

Table 1: Trendline of Online Resonance on DVD vs “HD-DVD” and “Blu-Ray”

(Last 12 months)

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Perhaps the immediate striking insight is embedded in the evident continuous decline in attention to the DVD format as a whole, while at the same time attention to the new Blu-Ray and HD-DVD format is increasing only mildly and inconsistently. In other words, consumer engagement with the whole issue of optical disk format is eroding!

Deep diving into the networked market suggests that consumer choice mindset is not necessarily limited to Blu-Ray or HD-DVD. Active consumer mindset is far broader in encompassing additional types of solutions to the same core (content consumption and ownership) needs!

From our analysis, Blu-Ray and HD-DVD are actually in competition not only with each other (for example, IP-based solutions are gaining popularity also among less techy consumers) and this increases consumers’ perceived risk in choosing either.

 

Focusing on the “war of formats” between Blu-Ray and HD-DVD, the state of shoulder to shoulder competition is evident. The striking similarity in trendlines of resonance between the two focal formats is typical to an undecided market. In such situations consumers tend to discuss the respective merits of alternative offerings against any relevant market development.

Old marketing models may need rethinking

There is a deeper layer of insights embedded in online consumer resonance.

Table 2: Critical events Influencing Online Resonance on “HD-DVD” and “Blu-Ray”

(Last 12 months)

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Throughout the last period content-based initiatives drove surges in attention but didn’t create decisive attention superiority to the respective format. This is visible for instance with Blockbuster’s alignment with Blu-Ray (June 18), Paramount and DreamWorks alignment with HD-DVD (August 21), and the release of the Transformers movie on HD-DVD (October 16-24).

But something happened to the long standing “stalemate” in November. Online mind-sharing tells the story of a shake up in consumer mindset caused by big retailer competition. In late October Walmart, Circuit City and Amazon lowered the price tag for Toshiba’s HD-A2 HD-DVD player to $198 triggering surges in consumer talk, with notable advantage to HD-DVD.

Immediately thereafter, on November 1st, Walmart and Best Buy announced special sales promotion initiatives that dropped the price to $99. This time consumer resonance on HD-DVD rocketed leaving Blu-Ray far behind. For the first time in (at least) a year “the stalemate” was broken.

Is it the beginning of a momentum or just a short term achievement for HD-DVD? A lot has to do with how marketers play their cards in the holiday season. But chattering consumers did provide a significant insight: So far, price-based leverages delivered better competitive differentiation than content-based leverages, at least in terms of consumer engagement.
The takeaways are clear and powerful.

Significant price cuts drive consumer action. There’s no surprise about that. But when a net active audience is concerned, especially an intensively networking audience, online resonance is both a critical market undercurrents gauge and a powerful influence channel.

What this deep dive into the networked marketplace suggests is examining the merits of “foot in the door” marketing strategies that motivate shift from “shopping” to “impulse” purchase behavior and leveraging them to drive a stalemate breaking mental shift.
1st2c in a nutshell

1st2c is the home of Online Strategizing Research© – the most comprehensive end-to-end methodology available for the networked market. Strategizing Research©‘s is strongly insight and opportunity orientated that creates a vivid picture of mindsets and behaviors of the networked marketplace and adds new dimensions to both online and offline strategies.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

Ofer Friedman

Chief Research and Client Officer, 1st2c

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