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Nike, digital and its relationship with customers

12 May

Who does digital and who does it well?

There are many companies proclaiming they do digital. Only some have actually done intelligent things in digital. Then there’s even fewer that are actually doing intelligent things on a regular basis. While only the very few have incorporated it into the wider business and its becoming part of who the company is. However, of all the companies who actually do digital, there’s perhaps none better than Nike.

Nike has embraced digital communications and realise its value of creating, building and enhancing relationships with its customers. Whether it’s NikePlus, mobile apps or social media content that begs to be watched and shared (as per the below video which was part of the FuelBand campaign), you have to appreciate the brilliance of Nike’s digital strategy.

Nike used to rely on the mass media to convince customers to buy its products. However, Nike now uses digital to create a more lasting and intelligent edge to its marketing and brand building. As Stefan Orlander, VP Digital Sport, Nike, said at the launch of his co-authored book Velocity: “Once you have established a direct relationship with a consumer, you don’t need to advertise to them.” Therefore Nike has used its digital services in order to latch onto customers in order to develop a deeper and more meaningful relationship. And once this relationship has been created and nurtured, the customer will be more inclined to buy Nike and also advocate on behalf of the brand.

The below video (via the link) of Stefan speaking at the WIRED Business Conference is definitely worth a watch. In it he discusses the thinking behind some of Nike’s digital initiatives including the FuelBand, NikePlus and sharing data with its customers.

Nike on digital at WIRED Business Conference

Brands need to get social with TV

5 Feb

Social networks have changed the way we watch TV. Now instead of our attention squarely focused on the content which is being broadcast, people are increasingly using their laptops, tablets and smartphones to engage with it as well. But the TV is not being left out in the cold when people ‘dual-screen’ as they’re also usually interacting with the programme online.

People will be posting their opinion about the show on Facebook and Twitter and even Googling it. Savvy production companies are getting in on the act by creating interactive online experiences to keep people within properties they own. Tellybug, develops apps that accompanies popular TV shows. They developed the ‘tap-to-clap’ app for The X Factor which allows people to cheer or boo contestants. Programmes such as The Bank Job encourage people to play online. And to play, Channel 4 makes them hand over personal information which can be sold to advertisers to create more targeted advertising.

The bringing together of the offline and online worlds has mutual benefits. For the programme, viewing figures are likely to be boosted. If people’s social feeds are lit up about a show, they are likely to be intrigued and tune in themselves. However, there are bucket loads of opportunities for marketers, the majority of which have not been exploited. The biggest opportunity lies in using people’s passion for the show and the talkability it generates.

Marketers have only been able to show any kind of affinity to a show and the surrounding brand by sponsorship or advertising that merely annoys people. Brands need to throw themselves into the online debate surrounding a show, in doing so will forge a deeper bond with a show’s audience. They can do this by buying search engine keywords or sponsored trends or hashtags on Twitter to make sure when people search online they find the brand. They can also post content about the show which their fans and followers want to share are their social network. What brands essentially need is a strong digital footprint and engaging content which complements the TV content people are watching.

Facebook is a $100 billion company

29 Jan

There’s a frenzy from Silicon Valley to Wall Street as Facebook gears up for its IPO that’s expected to raise $10 billion and value the eight-year-old company at $100 billion. If as expected, Facebook files next week, it’ll be the hottest tech flotation since Google in 2004. Analysts, bankers, tech executives and the media have been lining up to question Facebook’s lofty valuation. Many say that a value of $100 billion for a business that reportedly rakes in under $4 billion in revenue is insane. However, if we look back at recent history the valuation seems spot on.

Google and Facebook may serve different purposes but they have many similarities. They are both businesses funded almost entirely by pay-per-click advertising and to ultimately succeed they need to court the attention of marketers. They are also quite frankly worldwide phenomenons and companies that fundamentally changed the internet. When Google filed in 2004, it raised $1.67 billion with a valuation of $23 billion, this was on revenue of just under $1 billion. The valuation was around 23 times its revenue. It seemed high to many, but now Google reports revenues of $37.9 billion and its shares have grown 435 per cent since 2004. If one bought shares at Google’s initial public offering, it would be fair to say it was a shrewd investment.

If we look at Facebook’s figures they are already impressive and there’s the potential for high-growth. A $100 billion valuation would be roughly 25 times the current revenue of the company. This mirrors Google’s situation in 2004. But the real statistics investors should be looking at are the 800 million active users; the 50 per cent who log on daily; the 900 million objects people interact with; the seven million apps and websites tied to Facebook; and the 350 million active users who currently access Facebook through their mobile devices. Facebook has a large, engaged user base, a strong presence on mobile and ever growing insight into everyone on the site. This personal information is a valuable commodity for marketers as they crave more intelligent, targeted advertising. Facebook has made a lot of friends among advertisers who have poured billions into the company. Brands and marketing agencies will continue to pour billions more into Facebook as its user base grows, more apps and websites marry to its social graph and it continues to mature as a service. And this is why Facebook is a $100 billion company.

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