Sunday, March 21, 2010

Marketing Green Technology - PR Gets Caught In The Religious War Over Climate Change

A funny thing happened on the way to my Solar Power industry news release. On the plus side, a number of sources picked up the release and I got a lot of coverage. On the minus side, some of the initial buzz was centered around hysteria spurred by the "there-is-no-such-thing-as-global-warming" constituency.

Background:
Here in Silicon Valley, we understand that manufacturing photovoltaic material, the stuff that makes solar power cells work, is a technology market. It's basically the same process used to make silicon wafers for those integrated circuits that drive all of your favorite electronic devices -- but making a sandwich with cheese instead of meat. In recent years, this has been THE growth market in the semiconductor industry, pushing the industry for material efficiency improvements, increased capacity, and lower cost.

So, imagine our surprise at the emergence of an anti-innovation constituency. Simply put, there are people out there who have adopted an ideological dogma that there is no such thing as global warming or climate change. For these people, the idea of spending money on solar power is a slippery slope to admitting that some of their fundamental beliefs are wrong. While that might not seem like a big deal, many of the polarizing aspects of our modern society seem to drive people to an ideological need to cling to some of these tiny concepts like they are essential to identity and existence -- instead of cogito ergo sum, it's I don't believe in global warming, therefore I am.

Here in the technology space, you see this kind of behavior play out sometimes in challenges to innovation. Think about those meetings that you've been in where that one guy grabs onto one tiny snippet of data and uses it as justification to tear down an entire development framework.

Here's an example of how that might play out
Back in the 1990's, there was a consortium formed to help drive flat panel LCD research here in the valley with the objective of keeping the US competitive in the design and manufacture of LCD panels. Imagine conversations with our technology opponent back then:
opp: Why do we need to invest in LCD panels, my current CRT works perfectly.
pro: Well, LCD panels use less electricity than CRTs. They will reduce power consumption, lower your electricity bill, and help reduce global warming.
opp: There is no such thing as global warming. This is a waste of money. We should not invest in this.
Of course, that same guy probably has an LCD monitor on his desk now. If the purpose of innovation was "run-away desk clutter caused by overly large CRTs" or "strained backs caused by lifting heavy CRTs", he would probably argue against it with equal abandon. But the simple fact of the matter is that while all of these are benefits of innovation in LCD flat panels, none of these benefits were the driver for innovation.

Technology is Apolitical
Here's what these people miss -- technology is essentially apolitical. The same guy who doesn't want to believe in global warming probably doesn't think twice when he doesn't have to replace a battery in his calculator because it uses a photovoltaic cell for power. Photovoltaic cells didn't get designed into calculators because of some vast climate change conspiracy, they were designed in because way back when, some product marketing guy said, "if we add it to our product, consumers won't have to do anything with batteries -- engineering, can you do this?" They could. It sold. Now the design is ubiquitous.

At the same time, nobody sat around attempting to calculate a comprehensive global environmental cost comparison between manufacturing tiny batteries and solar cells -- nor ask the question, what if we could make biodegradable batteries out of the drippings from Costco rotisserie chicken ovens. We may wake up tomorrow and need to solve a problem like that.

This is how technology evolves. The photovoltaic manufacturing industry isn't ramping up because of some vast global warming conspiracy, it's ramping up because existing manufacturers are selling products at capacity and there is a market for more. They will make more hybrid cars for the same reason.

Addressing The PR Challenge
When faced with a PR challenge like this, the question that you always ask is what's the best way to handle it. Overall, what you don't want is the story to grow legs with your client as the focal point of a political controversy. At the same time, with many of the communication channels that play to the "controversy audiences", particularly those that communicate with a veneer of "news", they typically have more interest in whipping up excitement than in exploring factual aspects of the story.

So what's the best answer to deal with this type of issue? Depending on your audience and your situation, there are a number of ways to approach the situation and there probably isn't a single communications solution. My goal here isn't to provide a recipe, it's more about the thinking process. While you may be used to handling a mild-mannered PR program that just plays to the trades, you might run through a few exercises in your imagination exploring about how you might handle the situation if your apolitical technology suddenly became political.

Saturday, March 13, 2010

Is the US Government Finally Getting It Right On Broadband Internet Access?

It was either yesterday or the day before when an article on the front page of the San Jose Mercury News caught my eye, Google dangles super-fast Internet; cities leap to compete for network. What struck me as funny about this article -- here in Silicon Valley, you might think that you are the only region in the country that is desperately seeking more bandwidth. Suddenly, you look around behind you and there are thousands of communities, millions of people who are just as desperate as you are.

If you look at it from the consumer side of the equation, the desire is for faster network speeds and more bandwidth is ubiquitous. The problem with broadband network access and bandwidth isn't a technology problem, it's a revenue problem. Specifically, it's a "why should we spend anything on expanding our capacity until we have maximized our return on our existing infrastructure investments" problem, and it's being managed by your friendly neighborhood network providers like AT&T, Verizon, and Comcast. Imagine if your Internet access was limited by the local news paper -- and they tried to maximize the amount of money they made on both Internet and paper sales. Or imagine if your Internet access was limited by the record companies attempting to maintain and maximize revenues on CD and DVD sales (oh wait...).

So, when I came across this article this morning from the New York Times, Effort to Widen U.S. Internet Access Sets Up Battle, I felt compelled to say a couple of silent words of thanks and write this post. Don't get me wrong, while I'm optimistic, I'm not expecting success. Over the past decade and a half, the push to see a universal high-speed network infrastructure has been matched by the glacial resistance of the Bells. Perhaps with this initiative, there is finally some light at the end of the fiber.

Thursday, November 12, 2009

More News in Battles Over Internet Marketing Scams

Techcrunch has another post news from the social network gaming scams this evening. It sounds like there's been a class action lawsuit filed against a number of the game companies who provide the infrastructure for the scammers. The ScamVille Lawsuit: Facebook, MySpace, Zynga And More Face Possible Class Action Suit gives you the story and some interesting related links.

After two weeks, you might think that this story would have run it's course, but I think we're just getting started.

Wednesday, November 11, 2009

More from the Dark Side of Internet Marketing

Techcrunch has a post up about congressional hearings next week into the marketing practices of a number of companies with linked to some questionable ecommerce practices. Similar to the social network gaming scams, the practice in question here involves getting consumers locked into a monthly subscribed charge that is very difficult to cancel. Here's how Michael Arrington describes the scam:
Immediately after an ecommerce transaction takes place, buyers are presented with an offer to take a survey and/or get a partial rebate on their purchase. If they click yes, their credit card information is transferred to the ecommerce company and the user begins a difficult-to-terminate subscription to a worthless service.
It's worth noting that the companies that have received letters about testifying are not fly-by-night scam businesses. Most are actually names that you will immediately recognize.
The companies that received letters: 1-800-FLOWERS.com, AirTran Holdings Inc. (AAI), Classmates Online Inc., Continental Airlines Inc. ( CAL), FTD, Fandango Inc., Hotwire Inc., Intelius Inc., MovieTickets.com Inc., Orbitz, Pizza Hut, priceline.com, Redcats USA, Shutterfly Inc. (SFLY), US Airways Group Inc. (LCC) and Vistaprint USA Inc.
So why would they participate in this type of business? Arrington notes that,
Ecommerce sites that use these types of offers can get CPMs for the ads ranging from $2,000 – $2,500, say experts we’ve spoken with, and they make up a material percentage of revenue.
The full post, Next Week: U.S. Senate Committee Hearing On Aggressive Internet Sales Tactics, has more links and example of what the offer looks like. Check it out.

Sunday, November 8, 2009

Updated: Marketing the Social Gaming Ecosystem - A Series of TechCrunch Posts

Over the weekend, I was following a series of posts on Techcrunch that I wanted to share with you. As I've mentioned before, in following the job boards, there are a couple of types of jobs in the marketing category that I see popping up a lot recently. One of those revolves around marketing and lead gen for an assortment of social network start-ups. While there are trade-offs with any opportunity and any work environment, this is an interesting look at one market where the demand for marketing people is active. Hopefully, you'll find it educational. Caveat Emptor.

Here are the links presented in the order that they were posted:
Social Games: How The Big Three Make Millions
Scamville: The Social Gaming Ecosystem Of Hell
Two Companies That Said No To Social Media Scams
How To Spam Facebook Like A Pro: An Insider’s Confession
Scamville: Zynga Says 1/3 Of Revenue Comes From Lead Gen And Other Offers
Zynga Takes Steps To Remove Scams From Games

UPDATE:
Techcrunch has continued to follow this story. Here are three more links on the topic.
Offerpal Tries Out A New CEO. Shukla, Queen Of Scams, Is Out.
ScamVille: New Offerpal CEO Admits Mistakes, Makes Bold Promises
Zynga CEO Mark Pincus: “I Did Every Horrible Thing In The Book Just To Get Revenues”

UPDATE 2:
More news. After Zynga's CEO vowed to remove this type of advertising, they started running again. An interesting aspect is that they actually tweaked Michael Arrington's account so that it wouldn't display any of the offers. Here are more links:
“Horrible Things” Slink Back Into Zynga
Zynga’s FishVille Sleeps With The Fishes For Ad Violations
Zynga To Remove All In Game Offers

Saturday, October 31, 2009

Failures in Product Marketing: VMWare Fusion 3.0 Upgrade

For the past ten months or so that I've been using VMWare Fusion, I've been pretty impressed with it. To date, the biggest hassles that I've had with it revolved around the Windows installation and registration process. But for the most part, the software has run seamlessly and performed extremely well. So yesterday-ish, I fired up the software and was alerted to an available update -- Fusion 3.0. Normally, this means I go to the site, log in, download, install, and everything is good. This time, my fun began during the install process when I noticed the serial number field didn't pre-populate with the serial number.

Product Launch for Upgrades Goes Horribly Wrong
Instead of simply alerting me to an update, they were also alerting me to a case study in Product Launch gone wrong. Let's start with the positive stuff -- it looks like the demand for upgrade was so overwhelmingly strong that it blew out the new serial number registration system that they decided to implement. I say new because it may have been running for some time, but before yesterday I never encountered it. As a result, I spent half an hour struggling with their site interface, trying to understand why it couldn't find my serial number nor remember that I was a registered Fusion user. Based on comments from other users, I wasn't the only one -- from serial number recognition to activation codes, it looks like the number of people struggling was substantial. On the VMWare Blog, they even posted a 30-day trial serial number so that people could essentially bypass the system, giving VMWare and any of their customers that found their way to the blog a 30-day time-out to resolve the serial number issue.

How Version Upgrade Offers Should Not Work
Searching around the site, I also eventually found some other important data -- the upgrade to 3.0 was going to be a for-pay upgrade. VMWare wanted my wallet, but I was only able to discover that after searching their site. Now it's possible that I missed this information, hidden in the endless stream of conferences and roadshow notifications that they send to me, but regardless of the notifications that I received, when I went through the normal upgrade process, I didn't discover that things were different until I was halfway through the install process.

Pricing on the paid upgrade was surprisingly confusing:
  • For $39, you could download the 3.0 update
  • For $99 $59, you could get the download and a 12-month subscription that entitled you to software updates.
You'll note the strikethrough because apparently the original price was $99, but then they discovered that Amazon was selling a new package for about $65. Yes, for a time it was actually cheaper to order a new copy of the software than to upgrade. As a sidebar for you international site managers, comments posted on the VMWare forums indicate that while they changed the US$ amount, they didn't change the UK£ amount.

Now if you're like me (and a lot of others out there), the terms of this upgrade are quite confusing. Specifically, did getting the 'no updates' version entitle you to updates? On the VMWare message boards, debate on what the difference was between the two went on for a while. Finally, VMWare's Director of Personal Desktop Products weighed in with this clarification.
VMware Fusion 3 comes with free UPDATES to fix bugs and the like. So, VMware Fusion 3.0.1, 3.0.2, etc are ALL free UPDATES with any VMware Fusion 3 full purchase or upgrade. If we were to come out with a VMware Fusion 3.1, that is an UPDATE that would be free to all VMware Fusion 3 customers.

The Subscription offering provides MAJOR UPGRADE protection for 12 months. UPGRADES are major new releases with significant features. So, it will protect you in the event that VMware Fusion 4 is released in the next 12 months you will get that MAJOR UPGRADE for free with valid subscription. So, $20 gives you protection that if VMware Fusion 4 comes out in the next 12 months, you will get it for FREE as part of your valid subscription.

To summarize:
All VMware Fusion 3 customers will get UPDATES and bug fixes for free. If you buy the Subscription add-on, you will get MAJOR UPGRADE protection in the next 12 months.
While that may clear up the difference in the two price options, it doesn't really address the strategy behind the 'upgrade' offer. Specifically, what benefit or loyalty does VMWare provide to existing customers? While I picked up my copy of Fusion 2.0 with my system purchase and a $50 rebate, the list price for the software was about $60-70 list -- and there were a number of discounts and rebates that brought the price down to $40-50. In that way, the base upgrade price is equal to or greater than the initial price that I paid for the software. If this were a mind-blowing update or VMWare had done an exceptional job of building loyalty, an 'upgrade' that cost more than the original might seem like it makes sense, but neither of those are true. Instead, as a 'loyal customer', you start thinking about putting off your purchase until you can just buy new with a discount. Overall, their pricing strategy seems to fall a bit short.

It Gets Worse: Upgrade Insurance
The Upgrade pricing option is even worse. Essentially, what you are doing is paying $20 to VMWare as insurance against them making a major upgrade in the next year. The problem with this strategy is that in this case, the guy your betting with also has control of the results. VMWare controls their roadmap and they decide when they are going to release their next version. And if their next upgrade happens to take more than a year, you just gave them $20 for nothing. In fact, here's something that another poster in their community pointed out:
  • VMware Fusion 1.0 was released on: Aug 6, 2007
  • VMware Fusion 2.0 was released on: September 15, 2008
  • VMware Fusion 3.0 was released on: October 27, 2009
  • So if version 4 follows the same it too will be over a year before it will be released and therefore everyone who buys in this release frenzy will in all likelihood not get the next version and wasted $20!
It looks like the biggest reward from VMWare for being a loyal, early adopter is that the company gets more of your money.

In discussing this issue with one of my colleagues, he noted that many enterprise-grade software packages include a maintenance subscription charge, and that if you aren't current on that ongoing charge, you need to pay to become current before you're entitled to the lower cost upgrade. Since upgrade costs are typically significantly lower than the high initial purchase price, these maintenance subscription prices are just accepted. It makes me wonder whether this aspect of their pricing strategy isn't something that has carried over from their server products. Is this a case of server-room marketing not understanding a desktop consumer audience?

The Bottom Line
The long and short of the VMWare Fusion 3.0 upgrade is that I'm going to wait. While I'm certain that there are benefits to the upgrade, the pricing issues make upgrading anything but a slam-dunk. Meanwhile, in all of my searching through the VMWare forums, the 'sales collateral' that I received the most exposure to was different users posting issues that they were having with the upgrade. Essentially, the process of trying to upgrade let me straight into a word of mouth lion's den -- and one that sold me on delaying instead of purchasing. It's an interesting lesson.

Tuesday, October 20, 2009

Comcast and Twitter: Social Networking and Customer Service Converge, but is it better?

Here's an interesting post over on TechCrunch this evening. It's a look at Comcast, and how they are approaching customer service and Twitter. Comcast is promoting this concept that "Twitter has changed the culture of their company." Now, instead of just providing sucky service and having a public network of problems, they engage customers when they complain (using Twitter). Apparently they now have ten people working, actively monitoring Twitter for complaints, then engaging them.

On the surface, this is becoming an increasingly popular strategy for businesses, particularly consumer-facing businesses with poor service reputations. But if you look at the comments in the Techcrunch post, there's an implied question -- does responding to a disgruntled customer (if you can't do anything to change some of the core problems that are making the customer unhappy) really equate to better customer service?

While the basic question may seem silly or irrelevant, keep in mind that Salesforce.com is now offering a Twitter-to-Case extension on their App Exchange platform. What this means is that, in a matter of clicks, you too can start monitoring Twitter, listening to for customers who are complaining about your business. And while that may seem like amazing, enabling technology, if you don't have a real strategy for solving the issues raised by those unhappy customers, your new technology may not be a solution.

Anyway, I just wanted to call your attention to the link -- it may get some thoughts rolling in your head, kind of like it did mine.