This article first appeared on the Guardian Media Network

In the wake of ‘Amazon Coins’, a virtual currency that makes it easier for Amazon customers to purchase apps, games and other in-app items, Lexi Brown examines the rationale behind the move, its potential pitfalls and some of the consumer benefits.

With the introduction of Amazon Coins, the online retailer aims to make it easier and cheaper for customers to shop on its Appstore and on Kindle Fire. To kick-start the initiative, Amazon has gifted Kindle Fire owners 400 coins (worth £4), and consumers buying Amazon Coins in bulk will receive up to a 10% discount.

Central to the retail giant’s strategy is that Amazon Coins essentially will work as an incentive for consumers to shop within Amazon’s ecosystem, as they offer more value and purchasing power than real money.

This will initiate a virtuous circle, whereby customers are encouraged to buy ‘Coins’ to access value offers and discounts, which in turn means they will be more inclined to keep shopping on the Amazon Appstore.

This is clearly a very sensible move from Amazon as it tries to retain its Kindle Fire users, who might otherwise visit rival sites.

More than ever, it has become clear that the creation of a healthy brand ecosystem is vital in a highly competitive and crowded marketplace, as it builds a powerful and loyal community around the brand.

Indeed successful brands have long since developed ecosystem strategies, among them, Apple, a pioneer in this field.

Where Apple managed to achieve this successfully through the alignment of strategy, design, product integration and communications, Amazon is seemingly trying to meet a similar objective through its virtual currency.

Virtual currencies can encourage consumers to stay within the ‘walled garden’ of the brand’s retail ecosystem and the benefits are multiple: they can help enhance customers’ loyalty and have the potential to improve the personalisation of the shopping experience. They could even become the nexus between the online and offline channels, shortening the path to purchase, by making ‘click to buy’ easier. Parents can also use them to easily set spending limits inside games for their children.

From this perspective, virtual currencies could be the way forward. However, this is not the first time they have been introduced.

Amazon Coins are very similar to the now-obsolete Facebook ‘Credits’ and “retired” Microsoft ‘Points’: both ambitious attempts at virtual currencies, which failed because users perceived them as superfluous. They were ‘non-convertible’, i.e. entirely useless outside of the ecosystem, and an extra layer of friction in the transactional process. Users didn’t feel ‘credits’/’points’ provided a strong enough reason for being loyal to the ecosystem – quite the opposite, they were pushing users away from it.

So, will Amazon be able to create a successful ecosystem based on its virtual coins and capitalise where Facebook and Microsoft failed?

It all depends on the momentum of consumer adoption. Amazon will have to convince its customers of the convenience and value of its virtual currency. It will also probably need to offer more than just discounts, as it is normally a combination of factors, which lay the foundations for a successful ecosystem. They will also need to build traction fast.

Virtual currencies for brands and retailers are still largely uncharted territory. Amazon will have to tread carefully and keep expectations low to ensure its new currency doesn’t suffer the same fate as Microsoft and Facebook’s attempts.

 

From a brand’s point of view, the case for virtual currencies appears all but made – but as far as customers are concerned, the jury is still out.

VOLVO TRUCKS

November 18, 2013

Watch Jean-Claude Van Damme carry out his famous split between two reversing trucks. It is quite possibly the most epic splits (by a man!) I have ever seen!

A small but bold company called Adblock Plus appears to be holding Twitter to ransom – in what it claims is an attempt to make advertising better for everyone.

Adblock Plus is a browser add-on with 30 million daily users, and unless a site is on its “whitelist” it blocks all the ads on the site.
How do sites get on the whitelist? They have to abide by Adblock’s “acceptable ad guidelines” – producing “acceptable, non-intrusive advertising”.
That’s not all – websites also have to hand over a share of their advertising revenue for the privilege of appearing on the whitelist.
As Twitter prepares to increase its advertising potential, it has been reminded of AdBlock’s power in no uncertain terms by a cheeky little open letter.
So should advertisers be worried about the rise in ad blocking? What does it mean for brands? Lexi Brown attempts to reassure us.
Advertising remains by far the most prevailing financial model on the web. It supports the entire ecosystem of online content creators.
Advertising revenue is what has allowed the platforms that exist on the web to not only survive but to grow and prosper. But as advertising effectiveness declines, so does advertiser spend.
Ad blocking is growing – an article posted on Forbes shows that studies estimate that between 9% and 23% of web users are now using ad blockers, and use of ad blocking is growing at the rate of 43% per year.
There have been a lot of open letters flying about recently – Sinead O’Connor to Miley Cyrus, Julian Assange to Benedict Cumberbatch, and now Adblock Plus to Twitter.
The threat for Twitter is obvious; this software prevents a message even reaching the user, which will effectively erode the value of all advertising inventory as the placement purchased never even results in an impression for a proportion of users.  
As the value of advertising inventory breakdowns, it will fundamentally change our experience of the web as it forces a significant shift in the online business model.
So should platforms partner with Adblock Plus and avoid the imminent scenario of the internet collapsing? Or will ‘acceptable ads’ just lead to advertising that’s easy to ignore and therefore ineffective anyway?
ITV has warned users with ad-blocking software that it will be preventing them from watching content via ITV Player. This move by ITV is to show that they are prioritising protecting their advertisers and key revenue stream.
Either way, brands can future-proof themselves against any potential fall-out.
• Brands should make sure the placements of their ads is highly relevant, by ensuring ads are in contextually appropriate environments for their target consumer.
• Brands should avoid intrusive advertising placements such as auto-play videos, which can aggravate the user. Moving away from disruptive forms of advertising isn’t just popular with Adblock – it’s popular with consumers too.
• Creatively brands should try to be engaging but not distract the user from the content if they are not interested in the product. This is an opportunity for brands to be highly creative in terms of content – lifting ads above the ordinary and providing extra value for the reader.

RIP Google Reader

July 1, 2013

To the disappointment of many, Google Reader is finally no more, but the demise of the service shows that passion from users is no substitute for actual revenue.

Google Reader: Expires today

Google Reader: Expires today

After months – years, in fact – of speculation and threats, Google has finally pulled the plug on its popular RSS service Google Reader. Created in 2005, it quickly became one of the most popular RSS readers and a petition to save it earlier this year attracted more than 100,000 signatures within days.

For many brands axing a service with that kind of loyalty would be considered suicide. But Reader is one of the few digital peculiarities that has enjoyed huge success without making any direct cash.

As a result, Reader has always had to fight for approval and survival. It has already been ‘saved’ before, once in 2008 when Google wanted to focus on OpenSocial, in 2009 when Google wanted to focus on Buzz, and in 2010 when the digital giant preferred to put its efforts into Google+.

It seems to be the latter that has ultimately killed off Google Reader. One of the main reasons the service has remained could be in the hope users would seed content into G+. However clearly this has not happened to the extent Google was hoping. By closing the RSS service, which does share some similarities with G+, Google may be trying to push loyal Reader users towards its social network.

The demise of Google Reader is good news for competitors such as feedly, which allows users to share content through all social media not just G+.

But ultimately if Google cannot make money from such a service, it’s questionable as to whether anywhere else can, particularly as the wider landscape is not looking rosy for RSS feeders as more and more individuals use Twitter as a news aggregator.

Google Reader has all the qualities that companies want in their products – it has grown organically, its features have been determined by users and built from the bottom-up, and it’s heavily used. Users certainly feel passionate about it. But passion does not equal revenue, and without revenue, there is no future even for the most well-loved product.

Jamie’s commercial cutesy grin definitely swayed me to buy his first foray into speedy cooking, “Jamie’s 30 minute meals”. Apparently he sold a colossal 1.7million hardback copies despite a barrage of criticism from those (clearly useless people in the kitchen who don’t even know that cooking spaghetti requires water) that his 30-minute time frame was unrealistic. So, to further prove that his timings are achievable by the average family cook, he’s halved the time and is soon to be back on our TV screen with his latest TV series “Jamie’s 15 minute meals”, obviously accompanied by the recipe book. So will halving the time result him in selling his book twice as fast? If his latest advertising campaign is anything to go buy I’d predict a definite number 1 place on the chart this Christmas.

Jamie has exclusively released two recipes from his new book, Seared Asian Beef and Ricotta Frittas to his Facebook fans. Fans are encouraged simply to “cook it, snap it, share it”. So cook it – obviously means have a go at actually cooking one of the dishes in 15 minutes. Snap it, using Instragam and apply a filter (to make it look as professional as possible) and tag it with #Jamies15MM. And finally, share your masterpiece on Facebook not only for your entire social graph to see that yes you, an average cook has made a delicious Jamie Oliver meal in 15 minutes, but also for your chance to have your attempt featured in above the line advertising, such as these digital 6sheets spotted on the underground. 

This is shareability and validity from your social graph at its best and loads of people are already giving the recipes a go. Interestingly, Jamie has agreed to product placement in his new TV show. Products from Uncle Ben’s and Yeo Valley will both feature in Jamie’s 15-Minute Meals and Uncle Ben’s will also sponsor the show. This is Channel 4’s first product placement deals for a cookery programme and the added extra of celebrity endorsement of Jamie Oliver is sure to provide some interesting results, as he inspires his audience on how to use the particular branded products throughout his series. Similar to Delia and Heston’s partnership with Waitrose, Uncle Ben’s and Yeo valley will be looking to harness the commercial clout of Jamie in the kitchen.

We’ve seen many examples of social media going horribly wrong for big brands, from the likes of Dr. Pepper to McDonalds. Waitrose joined the social media fail last week with their “finish the sentence” tweet campaign, or did they?

Waitrose tweeted; “I shop at Waitrose because…” then sat back, expecting to soak up the praise. Instead the accompanying hashtag #waitrosereasons gave everyone the perfect tool to track the witty British comments as the hilarity unfolded. Some of my favourites below:

  • “I shop at Waitrose because I used Apple Maps to get to my nearest Sainsburys.” #waitrosereasons
  • “I shop at Waitrose because Clarrisa’s pony just WILL NOT eat ASDA Value straw”  #waitrosereasons
  • “I shop at Waitrose for the carrier bags. I put my food shopping from Aldi in them for the journey home.” #WaitroseReasons
  • “I shop at Waitrose because my butler is having a week off.” #WaitroseReasons
  • “I shop at Waitrose because I got a lifetime ban from M&S after doing something obscene to a Percy Pig.” #WaitroseReasons

Waitrose took the satirical replies with good humour and tweeted that they genuinely enjoyed all the tweets they received. Although this response was slightly slow to surface, it did help diffuse the situation and turn what could have been an explosion of negative abuse into a more light-hearted ‘banterous’ exchange of  the perceived brand image of Waitrose. The question is though, was this a complete social media fail or pure genius? The campaign has heightened Waitrose’s brand values of quality and excellent service as a key point of differentiation from the other grocery chains as well as reinforcing it’s upmarket brand image. I think it would be naive of us to suggest that Waitrose had not considered the potential for responses that mocked their ‘core consumer’ of a stereotypical ‘snob’.. they just probably didn’t expect the extent, variety and pure comical value of the responses that they received!

Be vigilant!