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Amazon.com's A9 Adventure

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Last month, as many of you probably know, Amazon.com’s A9.com subsidiary formally launched the A9 search engine and toolbar. In beta since April, the full A9 release has added some interesting functionality and clearly launched Amazon as a serious player in the search arena. A9 licenses basic search functionality from Google and ads search results from four other databases, including the Internet Movie Database, GuruNet.com and Amazon’s own "Search Inside the Book" feature. The A9 engine also enables users to search within and sort through their searching history. Moreover, a searcher’s login name can be tied to their purchase history on Amazon in order to further personalize their search experience. As we’ve seen, any time purchase and behavioral information is tied to personally identifiable information, there are usually privacy concerns.


So then why hasn’t A9.com received more scrutiny? Why hasn’t some privacy advocate fired at least a cursory shot across Amazon’s bow? All I’ve read in the traditional press, as well as the blogosphere, are brief mentions that there might be privacy issues with A9.com. I’ve seen nothing that would even approach the uproar over Gmail. Perhaps everyone is focused on the upcoming election. Maybe we’re all enthusiastically awaiting the new season of "The O.C." Or maybe we’re all just too busy making money again to worry about such things.


My sense is that it’s a combination of factors. One thing that can’t be ignored is the way Amazon launched A9. There’s a right way and a wrong way to bring a technology platform to market. And while there are very few sure bets when dealing with public perception, there are a number of ways that companies can hedge against getting battered over privacy issues. In other words, Amazon did a lot of things right in launching A9.


It’s all about the value prop


When a company introduces a new technology platform into the marketplace, it’s very important that they proactively articulate the privacy value proposition to consumers. Consumers want to know exactly what private information they are giving up, how that information is going to be used and what value they will get in return. Companies that do a good job of defining the privacy value proposition for their product stand a much higher chance of obtaining marketplace acceptance.


Of course, it helps to offer something that consumers actually want. Don’t get me wrong. Gmail has some very nice features, but A9 offers a tool that has an immediate, tangible benefit to a consumer’s online experience. The idea is that if you can empower me to get what I want when I want it, I’m more likely to view your tool as helpful instead of intrusive. Sometimes the distinction between the two is extremely narrow.


A way to opt-out


Amazon has created a generic version of A9 for those who don’t want their data collected. While some have argued that offering the generic site is a tacit admission that there are privacy issues around the standard site, I don’t necessarily agree. There will always be a group of consumers who don’t want to share their personal information with a company, and smart companies should allow those people to opt out of the data sharing while still providing them with the basic services. A9.com’s generic site acts as a natural opt-out for those with a heightened sensitivity to issues of privacy.


Provide notice


One of the quickest ways to raise the collective dander of privacy advocates is to fail to provide notice. So from my perspective, Gmail was bound to receive a high level of scrutiny. The most indicting privacy issue with Gmail is not that it scans emails per se. The problem is that Gmail scans incoming emails from people who don’t have Gmail accounts. People who don’t necessarily know that emails going into Gmail accounts are scanned. These folks don’t have the opportunity to opt-out. The only way to develop a valid privacy value position is for all parties to know what they’re getting. And as it’s currently designed, that is just not possible with Gmail.


A good rep doesn't hurt


Amazon has built up a reputation with consumers as a trusted protector of consumer privacy. For example, a research study conducted this past spring by TRUSTe and the Ponemon Institute revealed that Amazon received high marks for respecting consumer privacy. Amazon was rated the #4 most trusted company -- behind only eBay, American Express, and P&G. Companies that have strong privacy practices are more likely to be trusted by consumers. And one of the benefits of trust is that consumers are more likely to give trusted companies the benefit of the doubt when it comes to their privacy practices.


I don’t mean to imply that Google isn’t trusted. In fact, the company is widely respected for putting their customers first. But Amazon has built a reputation as a company that uses customer data to enhance user experience, while Google historically has not collected personal data from consumers.


The bottom line


Nobody other than the folks at Amazon seem to know which direction the company will eventually take with A9. The company could very well release additional functionality that will be considered in violation of consumer privacy standards. Sometimes it’s about pushing the envelope. And as we continue to split the hairs between useful and creepy, companies should be careful not to push too hard or too fast.


Additional resources:


Are You Ready for Gmail? by Dave Chase


Getting Ready for Gmail by Dave Chase


iMediaConnection: The Real Problem with Gmail by Alan Chapell


Alan Chapell is a consultant focusing on Privacy-Marketing -- helping companies understand privacy and incorporate consumer perception into product development. He has been in the interactive space for more than seven years with firms such as Jupiter Research, DoubleClick and Cheetahmail. Mr. Chapell is the New York Chapter Chairman of the International Association of Privacy Professionals, and he publishes a daily blog on issues of consumer privacy.

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Hutchinson: In a noisy attention economy, the metrics of reach, frequency, impressions and click through seem to be crumbling beneath a growing need for more relevant metrics, like say, (drum roll please) "engagement."


Of course, the trouble with engagement is that it's tough to measure. But at a recent ad:tech conference, you presented to a full house what seemed like a perfectly sound and universal way to measure engagement. Has EMM Group split the atom here?


Hastings: I like the analogy (especially since it was a scientist from my Alma Mater, Cambridge University, who identified the nucleic model of the atom).


The analogy we used at ad:tech was another scientific one: the transition from one S-Curve to another. In technology, the S-curve portrays the life of a technology that starts with a disruptive innovation, advances through competitive exploration of possibilities to achieve the breakthrough to industry standards, and then reaps its economic rewards in maturity.


As it does so, the next S-curve starts to form as a new disruptive cycle begins, and will eventually replace the old one.


 


Marketing is at the end of its old S-curve, where no matter how much effort we put into it, we will not improve returns.


One of the phenomena of the old S Curve is the model of marketing communications as a funnel. We put communications in at the top, and it gurgles through the funnel to turn -- by increasingly smaller percentages -- communications into awareness, and then awareness into consideration, trial, repeat purchase and loyalty.


It's frighteningly inefficient, and the inefficiency is designed in!


The new S-curve is based on the new concept of customer engagement. Engagement is a dialog conducted via a multiplicity of contact points, selected by the customer. Engagement is built around two key changes in the operating environment:


1) First, the addressable consumer or customer. Increasingly, we are able to reach our customer individually as an electronic address as that consumer moves between a desktop computer attached to the internet, a laptop on the go, a web-enabled mobile hand held communications device or an iPod. They might be using email, instant messenger, blogging, knowledge management tools, collaborative business software or shopping. We can reach them at most times and follow them around the web to analyze behavior that reveals their needs.


2) Second, customer control over the content they choose to receive. Advertising -- or indeed anything that we might typically have thought of as "marketing communications" that simply interrupts them before they have put their hands up to say "please tell me something" -- is anathema.


Engagement is customer controlled. To engage with a customer, we must understand their needs and preferences pretty much as individuals, or at least in very, very finely segmented groups, and communicate with them when they choose, rather than when the brand owner chooses. Engagement requires personal, individual meaning, and therefore it requires personal, individual understanding.


In order to become a standard for marketing, the first requirement of customer engagement as a marketing tool is that we have measures of engagement. At ad:tech, we introduced the concepts of :



  • Customer Engagement Points

  • Share of Customer Engagement

  • Engagement Conversion Rate

These are the cornerstones of the new engagement measurement system. They generate derivative measures like cost per engagement point and cost per share point of engagement.


It's a complete new paradigm, and it unleashes the new marketing S-Curve. Its key points are:



  • It embraces all contacts with the consumer from the web to word of mouth to conventional communications. The customer tells us what qualifies as a contact.

  • Every contact has a value, weighted by combining cognitive value (information generating a rational shift in favor of the brand), affective value (generating a positive feeling about the brand) and persuasive value (generating a shift in behavior towards the brand).

  • All the values roll up to a total brand engagement score. This is a global currency. A brand engagement point in Berlin can be compared to a brand engagement point in Beijing, or Buffalo or Buenos Aries.

Next: What does this do to the brand-agency relationship?

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Hutchinson: So what does this new environment, or discipline of process, metrics and "hyper-trackability" in modern marketing do to the brand-agency relationship? 


Hastings: The old form of agency relationship is at the top of the old S-curve. It's run out of steam.


The new relationship has to be built around integrated marketing: how to get the most Brand Engagement Points (BEP) from the array of communications, website contacts, CRM, trade shows, word-of-mouth, product placement and product-in-use experience, all at the most efficient cost per BEP.


That requires a complex integration algorithm, and it requires a single role of integrator.


It remains to be seen if any agency can operate the new algorithm. They can run the model and do the math, but can they play the integrator role? That requires the objective allocation of dollars between all the methods of contacting the customer for engagement. It requires that the choice of contact precede the choice of creative theme, a difficult shift of priorities for agencies.


It was thought that the creation of the new conglomerates like WPP and Omnicom would offer integration to the client but it has not happened yet. We see the integrator role being played inside the client organization. That makes the agency just one of a choice of vendors, and a choice that is governed by scientific resource allocation methods.


On what will the new relationship be built? We believe it will be in efficiency (cost of service optimization) rather than creativity. We don't see a lot of agencies stepping up to the plate.


Hutchinson: Perhaps these pressures between the new and old S Curves are also contributing to the grim statistics we keep seeing from Spencer Stuart, wherein the average tenure of today's CMO keeps dropping: from 23.6 months in 2004 to 23.2 months in 2006?


Hastings: The CMO is not a real "C" in many organizations. The idea of having a head of marketing on a par with the CFO, CTO and so on is a vaguely nice concept, but the responsibilities are not well defined.


And the reason for that is that most CEOs don't understand marketing and its role in the corporation. They appoint CMOs and expect some kind of a miracle to happen, such as great PR or a brand turnaround, and get impatient very quickly when it doesn't happen. They fail to think hard enough about the organization design, process, technologies and other needs of the CMO to have a true impact.


There's a ton of resistance to CMOs from business unit heads who want command of their P&L and budgets. Unless organization design and process design ferrets this out, the BU heads will win.


Hutchinson: Your book, "The New Marketing Mission," was the first book I had ever read by a group of marketing executives to deliberately include the practices of project and program management as a means to organizationally align or "re-shape" the company around customer insights and brand. 


Typically, marketing and project management have been diametrically opposed cultures and communities. Is enterprise marketing management changing this?


Hastings: Enterprise marketing management combines process, metrics, organization and technology. It employs one sub-process to generate insights and another, linked sub-process to go from insights to innovation, and a third sub-process to get the innovation to market. It develops repeatable capabilities and models such as product launch models that can be used again and again as templates. It absolutely uses project and program management principles, tools, methods, measurements and technologies.


When you see the new organizational construct of Marketing Operations popping up in technology companies, those are built on project and program management principles.


Marketing Operations will be a new dominant paradigm in marketing: highly disciplined, highly scientific, highly measured, highly enabled with technology. The old idea of marketing as an ad hoc, "pull it out of thin air" creative artistry is dead. Creativity has its role, but it plays the same role as it does in architecture: it's a contribution to a scientific and technically robust engineering process that produces a building that is beautiful but also functional, reliable, and built on a solidly engineered foundation.


Additional resources:


Listen to a podcast of Hunter Hastings' ad:tech session.


Download the PowerPoint presentation.


David Hutchinson is Senior Vice President of Program Partners. Read full bio.

Vine provides double the impact of a banner ad


What if Vine shows us that the consumer attention span is even shorter than we think? We know from analytics that a consumer only looks at a banner ad for three seconds on average. Could the same be true for a video ad?


Leah Spalding, western region VP at Dynamic Logic, tells us why the six-second ad will serve as a learning tool for marketers to gauge just how long they have to tell their story.


Vine adds sound and motion to the marketer's Twitter toolbox


Marketers learned how to advertise on Twitter using only 140 characters or less, and the consumer loved it. While challenging, the industry eventually got very good at tightening up messaging. This has made Twitter one of the most popular social networks for the digital marketing industry.


Josh Dreller, director of marketing research at Kenshoo, tells us why Vine is even more appealing to marketers than simple tweets. He says images are much more impactful than text for the digital audience.


The six-second spot supports a brand's overall story


What if six-second ads could serve as a complimentary vehicle for longer, more in-depth video advertisements? Vine is showing us that short video content is popular with consumers. Instead of crafting an entire digital video strategy around a series of six-second ads, marketers could learn to use the six-second ad as a way to enhance and compliment longer pre-roll.


Tamera Bousquet, managing director at Piston, tells us why campaigns can be crafted using six-, 15-, and 30-second video ads to enhance the overall story they're trying to tell. Having many ad lengths (and using them wisely) could profoundly strengthen your messaging.


Vine will help marketers tighten up their messaging approach


Does having 30 to 60 seconds of video to work with spoil marketers? The consumer attention span keeps shrinking every year, but the ads are remaining the same length. The popularity of Vine is setting the stage for a world where 30 seconds feels like an eternity.


Tamera Bousquet continues our conversation, explaining why six seconds might not replace 30 in the near future, but the industry will use it to learn how to sharpen a campaign's message and achieve higher consumer engagement.

Marketers will learn to be more engaging


How long will a consumer watch your ad? As long as it's engaging. Traditionally, 30- to 60-second ads take their time capturing the audience's attention, but six seconds leaves no time for fluff. If you're forced to tell a story in six seconds, you'll learn to capture the audience right away. Marketers will take the lessons they learn from creating six-second ads and apply them when creating longer video advertisements.


Alastair Green, Team One's executive creative director, expresses his belief that while marketers love telling longer stories, engagement is the ultimate key to an effective six-, 30-, or 60-second video campaign.


Chapell & Associates is headed by Alan Chapell. In 1997, Chapell founded the privacy program at Jupiter Research, an internet research firm focusing on the consumer internet economy. During his four and a half years at Jupiter, Chapell also...

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