New Stand

Have you taken a look at Fast Flip?It’s Google’s experimental newsstand, displaying articles and magazine covers in a pictorial design format that lets your eye gravitate toward front-page layouts you instantly recognize and to photos or other images that appeal subliminally to you. Read a bit at Google, then click through in a two-step process to a blowup extract in Google, with accompanying ads, then if desired click to the full story at the site of, say, Cosmopolitan or the Washington Post. (The media keep 100% of revenue from their own ads; Google further chips in most of the revenue from its ads.)

I like it. It’s fun to browse, if not quite like glancing at tabloids on Broadway. I hope it will pull old-line media like my cherished New York Times through their internet-driven financial woes to give us all the news that’s fit to print along with my Sunday morning coffee. We’ll see.

Big partners, like the Times’s digital chief Martin S. Nisenholtz, are “participating” but also “concerned.” Fast Flip could be the lifeline that fatally disintermediates. Right now, Fast Flip front-ends to forty publications, all of them major players in their content areas.

Whatever their contractual terms with Google, these first-in partners have begun with de facto exclusives, or near-exclusives. Should Google keep the newsstand small or open it to all comers? Should it offer publishers a spot along a sliding scale of exclusivity, presumably at a cost? Preferential shelf space is more than a pricing question. It’s a relationship issue. The best answer is by no means clear, yet but finding it will be crucial.

Fighting the Wrong War?

There’s a price war on among the large on-line hotel booking services, started by Orbitz and followed grudgingly by Travelocity and Expedia. Savings to the Orbitz consumer should run around $7 per night, on average.

I don’t see how Orbitz can come out ahead on this. Can you?

Of course, price-cutting typically does make sense when shoppers can see no real difference between competing alternatives.  And I’d be willing to bet that in 99 out of booking 100 occasions, they can’t - in either the price or the overall shopping experience. Why should a consumer think twice about minor disparities in rival booking fees?

 Bigger considerations will wash over all of this. Hotels vary in look and feel, amenities, location, and prestige, not to mention base price and daily deals.  Personally, I don’t think consumers can even tell if Orbitz is saving them a bit of money. I decide based on the all-in package deal. Don’t you?

More to the point for bookers, don’t on-line consumers prefer a website largely for its navigation characteristics? Personally, I hate sites that force me to reenter the airport names, number of tickets, time of departure, and so on every time I try a different destination or travel date. The aggravation and lost time cause me to write off the site entirely. Grrrrr....

More value in the customer experience is where on-line bookers should be competing head to head. Ironically, on this front Orbitz may already doing well. I know scores of Orbitz loyalists. Their repeat business has nothing to do with cuts in price, and everything to do with Orbitz’s cleverness in cutting their time spent and improving their ability to find a great destination.

Shouldn't they hold the line just like physical stores that have something better to offer? Didn't research just come out that discounts cheapen consumers' perceptions of a product long after the discounting stops?

 

 

Too Smart for Your Own Profit?

In "Marketing in the World of the Web" (op-ed, Nov. 29), Tom Hayes and Michael Malone warn of dire implications for marketers that fail to adapt to new realities they call Marketing 3.0. They suggest five calls to action: pay distracted consumers for their attention, listen to feedback from (mostly unhappy) customers, target smaller niches, pay consumers' trusted friends to evangelize for you, and use brick and mortar as showrooms for online inventory.

Their evangelism goes on to assert that "there isn't a smart company today that isn't implementing some kind of online community, wiki or blog strategy."

But the authors raise and fail to answer the important strategic question: "how to leverage this phenomenon into actual profits?" Whether their advice describes a two-generation leap forward from "classical marketing" or not, it certainly drives home the real challenge facing marketers today: consumer inertia. After years of myopic focus on efficiency and low price, most U.S. retailing -- offline or online -- today is simply boring and uninspired.

With the dot-com bubble of 2000 still fresh, however, truly smart and strategic marketers are being extremely careful to sort out the wheat from the chaff in the ever-expanding glossary of Internet lingo.

Nimble and relevant are indeed important business goals. So is the classical one of profit.

[Letters to the Editor, WSJ, 12/6/08]