The Great Shrinking Business Model

As a business model, Redbox is on its way to completely replacing Blockbuster. And the company has accomplished this goal in a remarkably short time period. Examining the two business models reinforces the importance of creativity, flexibility and appealing to changing market demands in our own businesses.

Redbox wins this competitive fightLaunched in 2002, Redbox is the company placing movie and game rental kiosks in prominent places around the country (i.e., those ubiquitous red boxes). Blockbuster, of course, is the retail chain with a similar function founded in the 1980s and enjoying success through the early 2000s.

From their about page, one learns there are 34,600 Redbox locations in the US, and 68% of the population lives within a 5-minute drive of one. Blockbuster, meanwhile, boasts of just 2,500 stores across the entire globe– down from 6,500 stores in 2010. Clearly, Redbox is on the ascendency.

I call this competition the great shrinking business model. For local movie and game rental, Redbox learned that a kiosk could take the place of an entire retail store. It was quite a revolutionary business decision to implement a strategy that relied entirely upon glorified vending machines.

But the model certainly makes business sense. In a convenience-driven market where almost all consumers own and use credit cards, renting a movie for about $1/day on the way home from the grocery store is easy to understand and simple to do. Selling through a kiosk also allows consumers to rent media 24-hours-a-day.

By taking advantage of evolving consumer behavior, Redbox benefits from a streamlined overhead– with fewer employees, drastically reduced leases and lower insurance rates than required to run a full-size retail store. These optimizations allow Redbox to offer the exact same product as Blockbuster more conveniently and for a cheaper price.

Blockbuster is the market loserSome might argue that the experience of interacting with a movie buff employee at a retail movie rental store makes the visit worthwhile. Perhaps, but it seems that the corporate nature of Blockbuster killed that experience along with the neighborhood video rental store  years ago. My last experience at a Blockbuster included an uninterested employee mumbling “hi” to me without even lifting his head out of box of movies he was sorting. Frankly, I feel the kiosk is more friendly.

By analyzing the business models, it comes as no surprise that Redbox is quickly eliminating the market need for Blockbuster. This rapidly shrinking business model should make you think about your industry– are you the clever innovator or the stodgy competitor about to be taken by surprise?

What is the Google Display Network?

The Google Display Network is part of Google’s advertising universe. Businesses place text, image or video ads on websites that partner with Google. The Display Network can be an effective way to reach potential customers who are interested in your products or services but aren’t actively searching for them.

Here are three examples, two from the New York Times and one from a travel website:

Google Display Network Example

image ad example

image ad example

While Google’s Search ads appear in search results, Display Network ads appear on websites. Both kinds of advertising are pay-per-click, meaning businesses pay for the ad when someone clicks on it.

Here are some tips for getting the most out of advertising on Google’s Display Network.

Use Demographic Targeting with Display Network Ads

Demographic targeting is the key to success with Display Network ads. Google offers a variety of targeting options. Here’s a small sample:

sample demigraphic topics

Display Network ads require careful demographic targeting to ensure only people who could become your customers click on your ads. A campaign’s list of excluded demographic interests can be just as important as the topics that are included. For most businesses, I recommend their exclusions list include some of the following:

Sample demographic exclusions

Create Image and Video Ads to Get the Most Impact

Last month, I wrote “How to Extend Your Reach with Google Image and Video Ads.” While text ads are the go-to format for search advertising, image and video ads are much more suited for display advertising. With search advertising, customers are already searching for your product. With display advertising, you need to work harder to earn their attention. Display ads should be as attractive and interesting as advertisements you would run in a magazine.

Get More Ideas

Google has several case studies for how brands like Jordan, Yankee Candle and match.com have used the Display Network, which you can check out here.

Have questions? Email me at amanda@zooinajungle.com

Marketing Your Personal Life on Facebook? Don’t.

In an apparent effort to raise advertising revenues, Facebook is now encouraging individuals to develop a marketing plan for their personal lives by advertising “important news” to their friends and family. Find that hard to believe? It happened to me just yesterday, when I shared the news I’m expecting. Here’s the picture proof (personal details removed):

Marketing your personal life on Facebook. Don't.

If you’re wondering, Facebook wanted to charge me $7.00 to pester my friends and family with advertising.

What a terrible idea. My friends don’t want me to target them with a marketing campaign. And I’ll probably unfriend the first person to advertise to me.

I’ve always advocated thinking of customers as individuals and real people instead of “target audiences.” Facebook seems to be trying to do the opposite – turning friendships into impersonal marketing strategies.

Extend Your Reach with Google Image and Video Ads

Most businesses know about Search Advertising with Google AdWords, and use the service fairly effectively to advertise to potential customers searching for products and services like theirs. Fewer take advantage of Google’s complementary Display Network, which promotes ads on websites whose readers match the demographics of your customers.

To see if your business is already advertising on the Display Network and to edit your target demographic settings, visit the Settings page for each campaign. You can see that Zoo in a Jungle Marketing’s campaign type is set to Search and Display Networks.

Google Display Network

Any text ads you’ve created will automatically be placed on the Display Network. To fully take advantage of advertising on the Display Network, businesses should create image and video ads as well.

Google Image Ads

To create Google image ads, use the display ad builder, which is accessed from your list of ads:

Creating a Google Image Ad

The ad builder allows you to create the text for your ads, upload images and choose colors.

Writing your Google Image Ad

It’s very important that your ad design is tweaked to fit all the different ad sizes offered by Google. Your average cost per click will be lower if your ads can display on any website in the Display Network. Most websites will only allow one or two of the ad sizes ti display on their pages.

Google Image Ads in all sizes

Google Video Ads

Google video ads can be displayed on Google’s partner websites or YouTube sponsored videos. Businesses can use any video you have already uploaded to YouTube (make sure you own the copyright to the videos). To create a Google video ad, choose the display ad builder:

Creating a Google Video Ad

Select Video in Media and Channels, then choose either TrueView In-display or TrueView in-search:

Choosing your video format

Next, you’ll have the opportunity to select a video from your YouTube Channel, write a description of the video, and your ad is complete:

Choose a video ad from your YouTube channel

I encourage businesses to experiment with the Display Network using image and video ads. You’ll extend your advertising reach, and clicks through the Display Network typically are less expensive than clicks from Search Advertising. Questions? Email me – amanda@zooinajungle.com

 

 

Raise Your Prices!

Have you been fretting about raising your prices? If it’s been a couple years or more since your last price increase, now is probably the time.

Raising prices is never so bad as you think it will be. Your customers may even be wondering why you haven’t done it already (but they are much too… discreet… to mention it).

The best approach is to announce you will be raising prices at a date in the near future. Let customers know it’s coming, but don’t apologize for it. Have a well-reasoned explanation ready for any customers who ask questions.

Marketing Podcast: Pinterest and Pilates

In this marketing podcast, Dave asks if a Pilates studio could use Pinterest in their small business marketing plan. I use this example to demonstrate how Pinterest could work for small businesses– and which businesses should just forget this social network altogether.

Download or listen below:

Pinterest and Pilates

Marketing Podcast: Pinterest and Pilates (6.4 MB)

This segment first aired during “Getting Down to Business” on Alaska’s Fox News Talk 1020.

Traditional Website Navigation Isn’t Boring. It’s Easy to Use.

Imagine a car designer saying, “It’s boring to have the brake on the right and the accelerator on the left. We need to stand out! Let’s put the brake next to this cup-holder.” How well would a car like this sell? Can you imagine re-training generations of drivers to drive differently just for the sake of one car design?

Every day, web designers are having the same conversation about website design (admittedly, with less fatal results). They are so bored of putting the “Contact” button on the right side of the menu bar that they forget having these conventions makes websites easy to use.

Sometimes web marketers mistake user habits for boring design. If users are researching dozens or hundreds of websites looking for products and services like yours, they appreciate a site that’s easy to navigate– and they’re only going to visit your site for about three seconds before they decide to stay or move onto the next one.

A website design must show the user what they’re looking for in those first three seconds before any user will take the time to admire beautiful design elements or creative devices. Part of that experience is having traditional elements in expected places. If a user can’t find your contact information, how will he ever call you?

The Pinterest Marketing Checklist

With 14.9 million users as of July 2012, Pinterest is certainly a growing social network. But should it be part of your marketing plan? If you answer “yes” to the questions in my Pinterest Marketing Checklist, a Pinterest marketing campaign should probably be in your future.

  • Are a significant portion of your customers or influencers women?
  • Is your brand related to fashion, art, crafting, event-planning, cooking, travel or something similar?
  • Can your brand tell a story with pictures? Do pictures of your products, services or location impress?
If you answered “no” to these questions, you can dismiss Pinterest from your mind and stop reading this article. I like to make life easier for my readers. Those answering in the affirmative should read on.

What is Pinterest?

Pinterest LogoPinterest is all about organizing and sharing pictures of things you like. These pictures are collected in groupings, called “pin-boards.” Users see pictures that friends and brands “pin,” and they “repin” the content if they like it. Pinterest users want to display their style and personality, along with using Pinterest to help them plan events and store ideas.

The overwhelming majority of active Pinterest users are female. There’s some controversy in the media about the truth of this statement, but anyone who has ever visited Pinterest sees the obvious truth of it.

Brands must be careful about marketing on Pinterest– promoting oneself too obviously will ensure your “pins” are ignored. Engage users with stories and environments that subtly include products and services.

Pinterest Marketing Success Story

Fashion brand Anthropologie has made a concerted effort with their Pinterest marketing the last few months. Visitors to the Anthropologie website can pin any product, sharing it with their friends. Importantly, the brand encourages customers to spread the word on Pinterest for them, creating a more authentic, populist campaign (and relinquishing control over what products actually become popular).

Pinterest Marketing on Anthropologie

Anthropologie took the Pinterest marketing offline, as well. Pages in their catalogues cheekily display collections of pins, with copy, “From oodles of brooches to the pull of Pinterest.”

Pinterest Marketing from Anthropologie

If you’ve decided to give Pinterest marketing a try, use this Anthropologie example as a start, or contact me for more ideas – amanda@zooinajungle.com. For readers who will be in Alaska on October 4, 2012, learn more about social media marketing during my presentation at the Getting Down to Business Sales & Customer Service Conference. Click here to learn more.

Marketing Podcast: Skip the Marketing Gimmicks

In this interview, Dave Weatherholt plays a bit of devil’s advocate, challenging my assertion that brands should avoid marketing gimmicks. But I remain firm– marketing gimmicks are bad for long-term success. Stick to what your business is passionate about, and your customers will notice.

Download or listen below:

Skip the Marketing Gimmicks

Marketing Podcast: Skip the Marketing Gimmicks (5.3 MB)

This segment first aired during “Getting Down to Business” on Alaska’s Fox News Talk 1020.

Why Facebook Marketing Still Matters

Facebook’s stock price plummeted on the news that 83 million of its user accounts are fake– either duplicates, spambots or (most interestingly) pet accounts. That’s 8.7% of Facebook’s 955 million monthly active users.

Despite the market’s reaction to this news, Facebook marketing still matters. Why? Because Facebook marketing still works– if businesses do it right.

If you’re reading my small business marketing blog, it probably doesn’t matter to you if Facebook has 955 million users or 872 million users. You’re never going to need that many customers. Facebook marketing still gives businesses the opportunity to connect with people who are interested in their brands, products and services. For many of my clients, Facebook is still one of the most effective marketing tools in our toolbox.

To learn more about effective Facebook marketing, read my article, “Facebook Marketing Tips,” which gives the following four tips:

  1. Post interesting content to Facebook
  2. Motivate your customers to interact on your Facebook page
  3. Respond to your customers’ questions
  4. Be subtle with your sales