12.10.09

Marketing on $700 a Year



Last month, Intuit, the personal finance software firm that owns Quicken, paid $170 million in cash for Mint.com, a two-year-old personal finance site with 1.6 million users. That corporate embrace comes after much frustration on Intuit’s part. At one point the company wrote Mint a letter demanding “substantiation and evidence” of the rival site’s rapid-fire growth. Compounding the vexation was the cost of acquisition for those consumers, whose numbers are currently growing by more than 130,000 each month: virtually nothing.

Donna Wells, Mint’s CMO and a former exec at Intuit, is a veteran marketer used to the big media budgets she had in previous jobs at Charles Schwab and American Express. At Mint, however, she may well represent a new breed of CMO who is spending very little on brand building and bypassing advertising in the process. Thanks to new social media and communications technologies, partnered with adept PR strategies, Wells showed that building a so-called Web 2.5 brand doesn’t need to cost much these days—and the experience is liberating.

“We built this brand on the cheap. In two full years at Mint, I spent what I would have spent in two days at Expedia,” laughed Wells, who was previously svp-marketing at the travel site. “Mint was my fourth startup, and the tools that are available to me now, even since my last startup in 2000, offer amazing reach and adoption through places like Twitter, Facebook, YouTube, MySpace and iPhone apps. It’s a phenomenal time for a marketer.”

Mint’s start kicked off with a well-read, popular blog—launched in March before the site’s product launch in September 2007—and key exposure when Mint launched at TechCrunch 40 and won top honors. Wells created a Facebook page where Mint now has more than 36,000 fans and attracted a following of 19,000 on Twitter. Free applications like WordPress power Mint’s blog while another free tool, the user-friendly Google analytics, lets staffers track site traffic. Mint does pay for some other off-the-shelf services for its site, spending all of $700 a year.

Wells estimates the marketing costs at Mint over the past two years to be around $2 million. That amount primarily includes salaries for the marketing staff which now numbers five, including herself, and out-of-pocket expenses like hiring an outside PR agency. She also experimented with search initially, spending about $50,000.

“The idea that you need a huge amount in marketing and advertising dollars is simply not true,” said Laura Ries, president, Roswell, Ga., consultants Ries & Ries. “That was a major fallacy in the dot-com boom where companies went out and spent millions and got no benefit. Companies like eBay and Amazon did it by being first at something, by standing for something and having a credible strong idea that generated the PR and word of mouth necessary to get into the minds of consumers.”

As a free money management tool, Mint obviously has a compelling appeal in the current economic climate. But Ries also noted the site’s quirky name and compelling blog, which in a world of forgettable corporate blogs won the award for best blog at the Online Media Marketing and Advertising awards last month. That communiqué reinforces an identifiable voice with the brand that initially attracted 20 and 30-somethings, Ries said, particularly in contrast to the older-skewing Quicken, with a less-defined image given the number or products associated with the brand.

Wells admits she will modify her marketing strategies as Mint goes more mainstream under Intuit but, even with new financial resources, vows to keep using the cheap tools that launched the brand and keep nontraditional media at marketing core.

Other creators of recent popular Web 2.5 brands share Wells’ reluctance to spend on advertising—and it’s not because they don’t have the money. Pandora.com founder Tim Westergren said his four-year-old Internet radio site expects to bring in $40 million in revenues this year, more than double that in 2008. But while he spent “maybe $100,000” on search in Pandora’s early days, he’s not interested in traditional marketing. Instead, he’s focused on customer service and bonding, no easy feat given the 35 million U.S. registered listeners to Pandora’s automated music recommendations. Westergren, a musician and composer, said a primary focus of the site’s marketing, and a major expense for the site, is a team of eight people who respond to every listener inquiry. In a busy month, Pandora’s “listener advocates”’ might deal with 30,000 e-mails, with topics ranging from new site features and new bands to complaints. Additionally, Westergren travels around the country talking to listeners at “town halls” held in coffee shops, community centers and bookstores. (He’s not just interested in what urban hipsters have to say—upcoming trips take him to places like Sioux City, Iowa, and Billings, Mont.) He said that while that might sound “old school,” it’s critical.

“Each town hall includes just a small number of listeners, obviously, but it’s a p
owerful cementing tool. They become ambassadors for you,” said Westergren, who cautioned about the need to take in the bad with the good. “In this day and age, it just takes a few enthusiastic people to do some damage to you on the Web; there are so many ways to evangelize.”

For his part, David Karp, the 23-year-old Internet entrepreneur who founded short-form blogging platform Tumblr, said more traditional marketing communications couldn’t achieve what his own team could do in viral product design at the nearly two-year-old site.

 “We did an experiment with outside PR, but we found people couldn’t explain it as well as we could,” he says. “The marketing is all on Tumblr’s site. We thought, ‘What features can we build, what design changes? How can we get visitors to further engage and share the experience?’ We always looked at the product as inherently viral and designed it that way. As it becomes more social with the Tumblr dashboard (which quickly lets users add other users to lists of friends), you can follow friends, publish and repost.”

 Last week, Jinni.com, a Pandora-like recommendation service for movies and TV, launched in public beta. The site’s co-founder, Yosi Glick, who’s clocked in time as a marketer at tech companies like Orca Interactive, said his lack of interest in advertising the new site strikes some acquaintances as odd. “‘How do you do zero-dollar marketing?’ People from the b-to-b environment find that intriguing,” he said. “Is it possible, they ask? It is indeed possible.”

Glick’s optimism about grassroots marketing may be premature. Still, sites like Jinni, along with Tumblr and Pandora, have all the advantages that accompany marketers who are the first in their categories. It’s a lot harder for others who later jump in and play catch up to the pioneers.

But even those companies with a head start like Amazon and eBay ended up using traditional advertising once they became dominant players and needed to protect their leadership status. So while marketers like Wells have launched successful sites on a dime, their experiences may still be the exception, not the rule. Advertising will remain a critical marketing support at launch—and thereafter, some observers contend.

“In general, you need more than one tool to launch and maintain a brand,” contended Allen Adamson, managing director of the New York office of Landor Associates. “If you’re the third one out there (in a category), you’re going to need more. Successfully doing it on a shoestring is not an average situation—it’s more like winning a lottery ticket.” 

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WHOPPER SACRIFICE case study


Success on Facebook


adweek/photos/stylus/109184-FacebookL.jpg

Success on Facebook comes from a blend of sheer size of fan base, record of publishing useful content and the extent of consumer interaction that is offered.

We looked at eight major product categories to find the brands that gained the most traction on the site, comparing their Facebook pages to those of competitors to determine which were best and worst at taking full advantage of the platform.

Some big-name players -- Coca-Cola, Best Buy, Starbucks and Microsoft among them -- are performing especially well on the social-media site. Others, however, including Burger King, Walmart, Dell and Geico, might be missing some prime opportunities to interact with their current and potential customers.

Contents:



  • Consumer Packaged Goods ... Retail
  • Restaurant/Food ... Technology
  • Apparel ... Insurance
  • Automotive ... Airline

CONSUMER PACKAGED GOODS: COCA-COLA

The granddaddy of Facebook brand pages wasn't even started by the soft drink giant. Two fans created the page in August 2008 and it went on to become the top product page on the site. Perhaps Coke learned its lesson from the Diet Coke-Mentos phenomenon, when it objected to the use of its product in a viral Web video hit. This time out, instead of playing the corporate heavy, Coke brought the two consumers to company headquarters and invited them to continue to run the page with backing from Coke.

Stats: 3.7 million fans; regular promotions include one that solicits videos for a shot at appearing in a Coke commercial.

Missed Opportunity... Pepsi. The company makes a disappointing showing on Facebook, given that it's a digitally and socially savvy brand. The Refresh Everything page has 250,000 fans, a fraction of rival Coke's. The company mostly uses it as a channel for pumping out updates of marketing activities.



RETAIL: BEST BUY

At a tough time for electronics outlets -- witness the demise of Circuit City -- Best Buy is pushing the envelope with social shopping. Its Facebook page doesn't just tout products, it lets visitors browse from the site and get feedback on items from Facebook friends. It's also using the site to get general feedback from its customers, sometimes to a fault.

A recent post asking users what they thought of the company offering a BestBuy.com in Spanish ignited a firestorm of hostile and offensive comments. The company acted quickly by taking the post down.

Stats: 842,000 fans; one of the richest retail pages on Facebook, featuring "shop and share" and "gift ideas" applications.

Missed Opportunity... Walmart. The retailer might be the biggest on the face of the Earth, but you wouldn't know it on Facebook. The company clearly has its work cut out for it in the give and take of social media, but hiding is a dubious strategy. Its page has less than 17,000 fans and no content.


RESTAURANT/FOODS: STARBUCKS

The chain has flexed its brand muscles on Facebook, running several ad campaigns to plumb its fan base, even to the point of offering free ice cream this past summer. Some say luring fans in with freebies means fleeting success, but Starbucks' fan page is growing over 3 percent per week, according to AllFacebook, putting it on track to overtake Will Smith in popularity on the site.


Stats:
4.5 million fans; ice cream and pastry giveaways clearly resonate with consumers; the company's social strategy was enough for Altimeter Group to rank it the No.1 most-connected brand.

Missed Opportunity... Burger King. Not many ad icons nowadays have the appeal of Burger King's mascot, but the brand is curiously absent from the social networking platform. That's too bad because it clearly has cachet among users as evidenced by the avalanche of responses to the short-lived "Whopper sacrifice" campaign last January.



TECHNOLOGY: MICROSOFT

Unlike its nettlesome rival Apple, which is so beloved it doesn't need a Facebook fan page, Microsoft typically has to go the extra distance. The company has a sophisticated Facebook strategy with fan pages for several different product lines. This helps build focused fan bases for Internet Explorer, Windows, Surface and its MVP Award Program of product evangelists. The approach lets the behemoth act smaller.

Stats: Over 300,000 fans; used the Bing page to solicit feedback on features the new search engine needs.

Missed Opportunity... Dell. Despite a concerted effort at social media, Dell hasn't cracked the Facebook code. It has about 40,000 fans who get a regular stream of product releases. What's missing is the feedback loop Dell started with its Ideastorm site in 2007.


APPAREL: ADIDAS

For a brand used to playing second fiddle to big-spending rival Nike, turnabout is fair play. Adidas Originals is a Facebook powerhouse thanks to its trove of quality content and event information. The brand has a "your area" tab that populates with localized content.

Stats: 2.1 million fans; posts photos and videos; updates a few times per week.

Missed Opportunity... Nike. As the ultimate passion brand, Nike would figure to be quite popular on Facebook. And it has amassed 382,000 followers. But talk about anti-social. Nike hasn't updated the page since July. Just do it, Nike.



INSURANCE: AFLAC

For some brands, fan bases are best built around characters. That's been the case for Aflac, which has attracted fans for its trademark duck's quirky updates. The brand gets the character's voice right, mixing charity pleas with offbeat takes on news from the duck's perspective.

The company, seeing how far it can go, has taken the duck to Twitter where he's attracted over 3,000 followers.

Stats: 161,000 fans; mixes updates with charity pitches and contests; posts daily.

Missed Opportunity... Geico gecko. If a duck can do it, a lizard can, too. Yet the Geico gecko has never found his footing on Facebook. The page has just 6,800 fans. The lizard's droll tone doesn't carry over to the site. Instead, his updates sound a lot like the voice of a PR pro.


AUTOMOTIVE: FORD

The automaker has lately fared better across the board than its domestic peers. It's also beating its competitors in social media, including on Facebook. Ford Mustang has built up a loyal following, and Ford is an active updater on the company's official corporate page.

Stats: Over 370,000 fans on the Ford, Mustang and Fusion pages; mix of product and event information with photos and videos.

Missed Opportunity... Toyota has nearly 50,000 fans, yet it hasn't updated its page since June.



AIRLINE: SOUTHWEST

It's hard to find anyone who's a fan of air travel nowadays -- but there are plenty of them on Southwest's Facebook page, which succeeds with a personal approach. Rather than craft a brand voice, for instance, Southwest introduces "hosts" Lindsey and Christi. Frequent polling keeps interaction high. Southwest has more Facebook cachet than hotter brands like JetBlue and  Virgin America.

Stats: 80,000 fans; high customer engagement thanks to fun promos.

Missed Opportunity... United Airlines. Not exactly a passion brand, United Airlines could stand to have something more than an empty page with 11,000 intrepid fans. 


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