Brands are defined by many factors; their personalities, the personalities of their owners, the opinions of their consumers, their attributes, their positioning relative to competitors, their packaging, their price, distribution, advertising and so on. But as substantially more marketing budget moves towards online, we may be about to see another set of definitions being used to define brands. These new definitions will be built around the keywords that consumers use to meet their needs, solve their problems and locate brand solutions.
We’ve all heard about the long tail. And so far that’s been a power law / Pareto curve. But I reckon that when it comes to specific brands, and we move from generic to custom search terms and keywords, strange things may happen to the relationship between keywords and customers along that curve. For example, we know that conversion rates are more likely to increase as more refined ‘long tail’ searches are made. But other things may happen too; the value, loyalty and other characteristics of customers may also vary along that curve.
It seems to me that future ‘brand prints’ or ‘Brand DNA’ profiles may have to consider the keywords consumers use to locate them (remember, consumers rarely search for brands – they search for solutions to their problems, and then use brands to refine and /or justify their choices). A given brand may score extremely well in terms of click rates against terms 3, 8, 16, 18, 25, 60, and 85. Moreover, the same brand may score well in conversion terms against another set of keywords. These keywords will form part of that brand’s online DNA. And of course, the DNA keywords may be altogether different to the keywords against which a competitor scores well – their keywords will be their DNA.
I’d expect brands, particularly brands that are searched, sourced and purchased online to be increasingly measured by their keyword profile. Moreover, brand positioning for these types of online brand may become a contest to fight for, win, retain and recover specific keywords that reflect consumers’ behavioural and search-based view of brands and brand solutions.
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Is Facebook worth $15bn?
So Microsoft has paid $240m for 1.6% of Facebook which makes Facebook potentially worth $15bn. The question on almost everyone’s lips; is it really worth that much? Well when you look at everything Facebook potentially opens up, it may well be. Here’s why:
First, This deal potentially gives Microsoft a new advertising platform that will enable it to compete much more effectively with Google for ad revenue. Facebook merges the capability to collect individual level member data with the ability to show ads. So it’s like fully segmented direct marketing in an online display environment. Or put another way, it’s like Google Adwords with customer data as the driver of ads served rather than the keyword terms being searched. Microsoft has a 5% share of the paid for search market versus Google’s 75%. If Microsoft’s strategy is right, they may well significantly increase their share of online ad revenue.
Second, the marketers holding the ad revenue purse strings spend large chunks of their time trying to segment consumers into groups that are more or less likely to use a given product. It’s currently a rather inconclusive and imprecise science. But because Facebook is about both individual level data and shared interest groups, it opens up huge opportunities to understand much more about how consumer groups are demographically defined. The organisation that holds that type of information will hold an interesting competitive advantage.
Third, we’re not just talking about a traditional online display ad revenue model here; we’re talking about a totally new way of consuming certain types of communication. This land grab is also about the big games of web TV and telecommunication. Facebook may become the place where consumers go to access these services and that sort of portal has an almost incalculably high commercial value.
Whilst many critics have scoffed at this deal price, it may not be as high as it looks. Unless of course something new comes along and entices people away from Facebook just as quickly as they moved in.