Feb 16 2010

Harness the Power of Your Consumers

Buckets and buckets of posts have been written about the impact of mobile platforms and social networks on marketing and small businesses.  One fledgling area that is bound to explode, however, is the ability to let your users create the content you’re selling – on the fly.

Letting consumers do the work of marketing products and services is nothing new.  Heck, before there was advertising, there was only word-of-mouth.  Pyramid schemes capitalize on this concept (in a bad way), while services like Amazon’s Associates affiliate program reward you for your work on their behalf.  Taking this a step further, Google has built an empire in providing a framework for clients to advertise across virtually every platform that might have a connection to the internet.  Through Google AdSense for Mobile Apps, currently in beta, users who buy iPhone and Android apps will essentially be paying to be advertised to.  All the marketers have to do is bid for space in Google’s rotations.

In order for the marketing aspect of these apps to be successful, the apps must be used.  Repeatedly.  The best games (e.g. Bejeweled) have a strangely compuls addictive quality that brings people back.  Utility apps like PocketMoney (a check register that I use and love) rely on a user’s own dedication to achievable goals.  But what, beyond the novelty factor, will motivate you to keep checking in on location-based social networks?

Enter foursquare – a multi-platform social network that encourages you to check in via GPS in order to unlock badges and “claim” territory.  Social networks are already addictive but tempered by the effort required to load an app to register each of your arrivals throughout the day.  By introducing a competitive gaming quality to the service, foursquare captures a significant involvement and return rate – i.e. ad exposure.  The marketers, meanwhile, need only negotiate with foursquare for deals and promotions.  It is the users, through the framework of the app/service, who will work to earn the “coupons” and inspire friends and coworkers to join and do the same.  (Read more about foursquare’s unique advertising model at Mashable.com)

While marketers will be quite happy to let consumers spread the advertisements, the untapped market for consumer interaction lies in getting your users to create the content you’re selling.  Case in point here is Second Life.  Launched in 2003 by Linden Lab, the virtual world is free to join but charges fees for land ownership, purchasing in-game money, and other premium services.  The world itself is user-created – everything that you do, see, or interact with is made by other in-game characters.  So with the consumers doing all the work, who’s making a profit?
  • According to figures published by Linden Lab, about 64,000 users made a profit in Second Life in February 2009… (Wikipedia)
  • …in 2008 consultancy firms Rivers Run Red and Electric Sheep have reported annual revenues of $6 million [from Second Life]. (Wikipedia)
  • The virtual world of Second Life saw user to user transactions totalling $567 million in 2009 and this figure is expected to increase during 2010. (PR-USA.net)
Taking both of these concepts and putting them together gets us: Waze.  A self-described social mobile app, Waze offers real-time maps, traffic information, and turn-by-turn navigation.  As Diana Adams explains in her Bit Rebels article:

…instead of waiting for the maps to update with the newest changes and developments on the road, the Waze users do it both actively and passively by just having the app open.

If you drive on a new road that has not been updated on the Waze map, and collect the “goodies” along the way, you receive even more points than a regular road, and rank higher on the global scoreboard. By competing in the contest, you enjoy an entertaining gaming experience, but more importantly, you contribute to the Waze community by helping to build the map, which is then used by other Wazers.

Revenues, according to CNET, will come from selling ads.  In short, the consumer creates the product, a social gaming aspect keeps them coming back, and all the while the users are viewing advertisements.  As smartphones become the standard and more and more of the population becomes connected to the internet, this marketing and business model could (will) explode.  The possibilities are endless.

Can you think of other ways to make your consumers build the products you’ll be advertising on?



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