E-mail and viral marketing

1. E-mail and viral marketing MARK 430

2. Today’s class will cover: • Marketing communications • Email marketing • How to get your email delivered and opened • Understanding SPAM legislation • Viral marketing • Putting it all together • Case study of Lord of the Rings (website and viral marketing)

3. E-mail (direct marketing) • Marketing-related e-mail is 22% of a typical Internet user’s in-box (conservative estimate) • More than half of this is spam (marketers have abused and misused email?) • Advantages • Cheap • Direct (include hyperlink to website for click-through) • Disadvantages • Bad reputation because of spam • Emails keep changing • No direct correspondence between person and email address as there is with physical mail

4. E-mail Postal Mail Delivery cost per thousand $30 $500 Creative costs to develop $1,000 $17,000 Click through rate 10% N/A Customer conversion rate 5% 3% Execution time 3 weeks 3 months Response time 48 hours 3 weeks Metrics for Electronic and Postal Mail Source: Jupiter Communications as cited in “E-mail and the different...”

5. Why does SPAM continue? • Cost to sender is minimal • Very low response rate (0.025%) required to make SPAM profitable • Nature of the worldwide global network enables SPAM • Legal penalties difficult to enforce

6. Permission marketing (opt-in versus opt-out direct marketing) • Seth Godwin coined the term “permission marketing” to describe “opt-in” • Ask people what they are interested in • Ask permission to send them information • Then do it in an entertaining, educational, or interesting manner • Opt-in techniques will grow considerably because it is seen as an effective way to reach people who have been made skeptical of traditional marketing techniques

7. eMail marketing challenges • Even with opt-in, there are considerable challenges in • Getting your email to the recipient (spam filters etc) • Getting them to open it when they get it

8. Some tactics to help get your email delivered and opened • Double opt-in subscription process • No pre-checked boxes • Visible “update email or preferences” link • A recognized, expected, consistent sender name • “Branded” subject lines and subject line content • Based on How Nongeeks Can Increase eMail Delivery

9. Some tactics to help get your email delivered and opened (cont’d) • Be aware of how content (spam) filtering works • Message proofing and pre-testing • Personalization and segmentation • Think about images instead of text (downside!) • Manage user expectations • Select appropriate send time • Based on How Nongeeks Can Increase eMail Delivery

10. Stay legal • Canadian legal position • no legislation in place yet • Being considered by the Spam Task Force • US law – the “Can Spam” Act – came into force on Jan 1, 2004 • Requirements for commercial emailers

11. Viral marketing (word-of-mouth direct marketing) • Any strategy that encourages people to pass on your message to others • Let the users of the Internet do your marketing for you • It works, and it’s free • Hotmail used this technique to raise product awareness • Be careful of customer perception that they are being “used” – people are increasingly sophisticated and cynical

12. Elements of a viral marketing strategy • Free products or services • Easy to pass on to someone else (Recommend it; email to a friend etc) • Build in scalability (get ready for the rush) • Build on common motivations and behaviours • Understand and exploit existing communications networks • Some examples of virals from Lycos Cheeky Emails

13. Marketing communication: Putting it all together • Case Study: Marketing Lord of the Rings • Based on information taken from Internet Marketing: Building Advantage in a Networked Economy. 2nd Ed. Rafi A Mohammed et al. Irwin/McGraw Hill. 2004.

14. The marketing plan for Lord of the Rings • Framing the marketing opportunity - the LOTR brand was already well known before the films, so the strategy had to build on that • Marketing opportunity analysis: understanding customer needs • film has elements that appeal to several audiences (action, romance etc) • existing fan base was already very active online - good opportunity for viral marketing • website could serve various interests • hard core fans could get behind-the-scenes info • others could find out about actors • others may be interested in the cultural aspects of Middle Earth • Risk was that fans may not like the movie, in which case the Internet could be a liability - bad reviews travel fast

15. The marketing plan for Lord of the Rings • Marketing strategy • Segmentation: the potential audience varied in demographics and psychographics. Hard-core fans were targeted separately from general movie goers, women targeted separately from men • Targeting and timing: • the strategy was to target core LOTR fans first - these would eventually become evangelists for the product. Need to instill trust early on, and encourage viral marketing. Community building with established Tolkien websites was also done • Secondary groups and mass audiences were targeted using website, and conventional mass media

16. The marketing plan for Lord of the Rings • Marketing strategy • Positioning: • once the audience segments were defined, the positioning of the movie was decided, with online and offline positioning working together to provide consistency • best positioning determined to be “a stunning action/adventure with a classic good-versus-evil story that focuses on a ring with great powers” • a lot of focus on ‘the ring’ in communications • lot of focus on the setting, the landscape, the costumes and the creatures • online and offline advertising campaigns were separately tailored for male and female audiences

17. The marketing plan for Lord of the Rings • Implementation: The Marketing Program • viral marketing formed the core of its communication strategy - powerful tool for generating awareness. Used pre-existing fan base • LOTR newsletter (click-through rate of >50% and forwarding rate of 25%) • Partnering and shared content - content provided to other websites - “advertorial” material - increased market reach • heavy use of downloadable viral content on website (eg. preview footage)

18. The marketing plan for Lord of the Rings • Implementation: The Marketing Program • Official website: raising awareness - first preview footage April 2000 - objectives • show early adopters that the film would be of high quality - generate early buzz among key fan group • “give something to the fans” - keep them excited • drive awareness of website and the movie • Execution - “co-ordinating the power of the community” - used other Tolkien sites, daily email alerts, and “countdown” image releases. Intention was to create high expectations for the exclusive launch • 1.7 million downloads within first 24 hours • 10 million downloads within 21 days

19. The marketing plan for Lord of the Rings • Use of official website • Many people who use the site are already committed to the brand • The customer experience at the site had to satisfy the committed fan, yet encourage exploration by novices • had to make newcomers feel welcome - not as though it was an exclusive club • The other marketing challenge was to integrate online and offline materials

20. The marketing plan for Lord of the Rings Context: highly visual style, inviting look and feel, topic-based interactive interface • The customer interface of the website - the 7 Cs Content: focus on filmmaking, wealth of material: photos, audio, clips etc Customization: Low, no registration

21. Stages of Desired Customer Experience on the official website