The pulse of Alexander Interactive

The news that Twitter is getting into the advertising business has exciting implications for companies ready to harness real-time conversations for ecommerce activity.

Companies with products and services to sell will be able to tap into the immediacy of conversations on Twitter and provide targeted offers in real time. Frustrated with a travel booking? Post a tweet and watch as a travel agent enters your tweet stream. Bouncing around ideas on which shoes to buy? Watch an ad for Zappo’s appear at the perfect moment.

If executed well, it’s the kind of advertising that consumers might admit to enjoying. More relevant than display ads and less intrusive than mobile, Promoted Tweets–once the kinks are smoothed out–could be downright useful.

Consider: C.C. Sabathia of the New York Yankees pitches another great game and completes his no-hitter. People (including, probably, this author) are tweeting rapidly about the feat, starting in the middle innings and hitting a crescendo around the end of the game. As the volume hits its max, Steiner Sports (an Ai client) inserts ads into the chatter: “Buy Sabathia’s game-worn jersey from his no-hitter! Get details now.” Instantly thousands of people are tuned into an item that might appeal to them at the moment of its maximum appeal. It’s search marketing for conversations.

Twitter’s conversations are essential, of course, and Promoted Tweets will have to be obvious without being intrusive. With the right execution, though, they will be huge.

Duane Reade introduced a new rewards program today. I happened to be in a Duane Reade this afternoon, where the cashier swiftly upgraded me to the new system and gave me a thick coupon book for my loyalty.

The pharmacy and quick-shop chain is promoting its new program, Flex Rewards, as a consumer-friendly upgrade. They cite the new system’s non-expiring reward points and paperless redemption as the main improvements.

Which is great, until the consumer finds out the real meat behind the change:

What Rewards will I receive?
You will receive a $5 Reward for every 500 FlexRewards points earned.

The old Duane Reade Dollar Rewards Club offered a one-point-per-dollar system that was blissfully simple: spend $100, earn 100 points, get $5 in store credit. It was simple and useful enough that I actually kept my rewards card handy, and I earned a handful of redemptions.

The new program is more confusing and far less valuable. Consumers now get two points per dollar spent and the same $5 reward now comes at 500 points. Or, in layman’s terms, after $250 spent rather than $100. Earning the five bucks just became two and a half times as difficult.

Flex Rewards also has a couple of gimmicks in the system, such as SuperSaver, which encourages customers to not redeem their points in exchange for bonus points back when they finally spend the credit. It’s a cash-back system that feeds itself.

If any of this has heads spinning, I suspect it’s by design. Duane Reade has devalued its loyalty program by a minimum of 60 percent. It cloaked the bad news in technical upgrades and new schemes that try to divert attention away from the devaluing.

With Flex Rewards, Duane Reade stands to give away a lot less value in 2010 than it did in 2009. If I had a stake in the company, I’d be pleased with the new program. As a regular Duane Reade customer, though, I’m probably just going to stop using my card.

With the release of Android 2.0 on the Motorola Droid, the Google Maps for Mobile application brings turn by turn GPS navigation (with voice) to your car. A great feature by far, it actually made Garmin and TomTom’s stocks tank, but what does it mean for the future?

Currently adwords is all over the web; on pages, in your mail, on maps. Now picture this possibility and keep in mind this is all hypothetical: You are using Navigator to get you to the local movie theater and it randomly chimes in with “You are about to pass Joe’s Pizza!” This could be good and bad. Good because you might be able to set the navigator to find restaurants you’ve never tried and didn’t know were there. Bad because it could get annoying. Good because it would open up a whole new form of advertising for small businesses.

Either way, just something to think about, times are changing with all the technology we now carry around in our pockets.

A demo of navigator in action:

Spotted in my RSS feed today:

OK, Mr. or Mrs. Consumer, riddle me this.Which of the above buildings sells pizzas, and which sells radios?

I ask because of some aggressive and misguided rebranding efforts going on by major retail chains. In an effort to both be trendy and transcend an existing identity, they’re seizing the playful halves of their names and marketing around them.

Which sounds great, until you take them out of context.

Pizza Hut thinks its consumers already use “the Hut” as shorthand, so they’ve embraced it as a marketing initiative. That’s fine enough, but it doesn’t scale. The Hut doesn’t mean anything if it’s not related to mealtime and pizza, and it won’t catch the eye of someone looking for food.

Meanwhile, Radio Shack has decided to do the same thing. They, too, say their shortened “the Shack” is used by devoted fans, and that the name is more trustworthy than the official brand. Except, erm, it really isn’t.

When does a nickname imply trust? When it comes from a customer, it says, “I go here all the time,” which can be construed as, “I trust their products.” When it comes from the corporate mouth, the message is,

“You should be my friend,” not, “You can trust me.” It feels entirely different.

But my biggest complaint is with the brand identity these nicknames create. Not only are the messages missing their mark, but they’ve gone so far as to become more or less identical. What do they mean? Tell your coworker, “I’m going to the shack and the hut at lunch,” and see what happens.

I’m all for nicknames; my coworkers have several for me (and probably a few that I don’t know about). But the best ones are descriptive and add warmth and depth to the thing they describe. Shacks and huts, for all their marketing efforts, don’t really do that.

Last week I received in the mail an appeal to support the World Wildlife Fund. This is an organization I generally respect. Its motto: “WWF’s ultimate goal is to build a future where people live in harmony with nature.”

Yet the mailing I received from WWF contained 17 pieces of paper. Every piece is bright white, none are noted as recycled or post-consumer, and most have four-color printing on them.

I’ve never given to the WWF, but I have a membership at the American Museum of Natural History, so I guess I’m a good target. To curry my favor, the WWF thought it best if it sent me

• an appeal letter
• a blow-in showing the impact of my donation
• five “occasion” cards (Thinking of You, etc.) for my use
• five envelopes for the cards, bound by a piece of gummed paper
• a sheet of wildlife stickers
• a sheet of personalized return address labels (attached to the donation form)
• and an envelope for sending in my donation

I know direct marketing works, so I’m not going to debate whether I should have gotten mail from the WWF. But that doesn’t absolve the mixed message this envelope sends.

How can an environmental organization send 17 pieces of paper, unsolicited, to potential constituents? How many envelopes did they send out–10,000? 100,000? This campaign could have used a million sheets of paper, or more–98 percent of which were summarily thrown in the trash (or, hopefully, recycled). All of which runs directly counter to the organization’s stated mission.

I actually came away from this mailing less inclined to support the WWF, not more. That’s a serious misstep for a marketing campaign.

The lead eMarketer story today is How Much Ads Cost. It breaks down offline media CPMs in a handy graph, then makes a separate set of online assessments.
The biggest takeaway? Display advertising doesn’t pay. Online display ads ran at a $2.46 CPM in 2008. That’s less than 10% better than what outdoor advertising charges for billboards and bus stations.
The article goes on to note better returns in video (CPMs anywhere from $7.40 to $35, depending on placement) and search ($75!). But it doesn’t eliminate the big message: online display advertising doesn’t pay. Not well, at least.
Of course, display ads are de rigueur in much website creation, and a buoying component of media sites. But display has become a baseline and not a profit center. This is happening offline as well as online. The New York Times recently reported on evolving revenue channels at magazines, where subscriptions are becoming pricier profit centers–the opposite of the traditional model, where subscriptions covered postage and ad revenue ran the business.
Savvy online publishers are realizing this and similarly evolving their models. Beyond video advertising, sites can offer premium content, exclusive access, tools and other items to entice more value out of individuals. Business-to-business revenue needs to morph into something more profitable as well, whether it’s through partnerships, sponsorships, cobrands, or something else.
Innovation is going to be key in the coming years. Because a simple ad banner unfortunately won’t pay the bills.

Ai and Steiner Sports rolled out a great context-aware ad panel that presents product search results based on page content on espn.com.
The search widget, as we call it internally, receives a search phrase from ESPN when a page is called. The widget checks the steinersports.com database for related products, then shows the top two results on the page. There are also default items in place when the search phrase doesn’t return any relevant results.
The widget is the product of a three-way collaboration between Ai, Steiner and ESPN. Our thanks to ESPN for helping to get everything running smoothly.
A full news item will be posted soon, but in the meantime, try it out: Derek Jeter on espn.com

I used Netflix for the first time this week and it wowed me. I know, this would have been news 3 years ago but Netflix is now: ubiquitous with getting movies, has forced Blockbuster to rebuild its business plan, and has a second generation that features a library of streaming content. I have known that people swore by it but I thought of it as not for me.
Like me with Netflix, people are still reticent to use the internet to its fullest. They have heard the benefits of net based products–and probably know that the new way is a vast improvement–but still do it the old way.
Online retailers and online arms of brick-and-mortar retailers have to keep in mind that some people are arbitrary. There will be people that will take their sweet time, but one time will try your service.
It was a free trial that got me started and I saw for myself the benefits of Netflix. Though I have no statistics handy, it’s not a stretch to think that some people are still hesitant to try a new service without an enticement. E-tailers gave steep discounts many years ago to make it easier for people to try their first online shopping experience.
There are many reasons to avoid these steep discounts, but an introductory rate, week, free shipping, or coupon still have a way to bring people to buy online.

Tips for making the best impression with your emails is my latest column for iMedia Connection. As with the last one, it’s practical advice for email marketers, based this time on my observations and experiences with airlines’ communiques. Check it out.