Making Money on a Search Engine

Internet search engines have become indispensable tools, And while there are a lot of search engines, Google has become the de facto standard for the industry.

According to the Brand Keys Customer Loyalty Engagement Index, when it comes to search engines, here’s how they’re ranked by people who primarily use one versus another:

1.Google/Yahoo

2.Netscape.com

3.MSN.com

4.AOL.com

This matches up pretty nicely with their traffic patterns, but making money doesn’t, of course, depend on the user, unless it’s the user you’re talking about who is making the money!

A new search engine, Zot-spot, is willing to pay users for using their search engine. Rather than keep the money they make running ads, the site is willing to give users a share. Portal users can get a check or make a donation to charity. And if they convince friends and family to use the site too, they can make even more.

As a new consumer revenue stream it’s an interesting differentiator. But as lot of values drive loyalty in this category, it will be interesting to see if the tactic results in owning customers or merely renting them.

Star Power

It isn’t a new tactic to borrow “equity” from celebrities. And focusing on celebrity brands has paid off for some retailers in the past. So it was interesting to see Macy’s new, star-powered TV ad campaign.

The strategy relies on creating a destination for exclusive products where the attraction is based on the magnetism of brands backed by celebrities like Martha Stewart, Donald Trump, Diddy, Jessica Simpson, and Usher.

Tying your brand to a celebrity is not always a guarantee of immediate consumer engagement, store visits, or sales, but it’s almost a no-brainer when you combine the nation’s best-known department store with stars who have virtually become cultural icons.

Astrologers of old believed that the stars controlled the destinies of men. In this case, maybe department stores too.

Never Atrribute to Malice What Can be Adequately Explained by Stupidity

Increased levels of consumer brand and visual literacy have added to the difficulties products and services have engaging customers.

On the other hand, in an era when “co-creation” has become derigeur, brands often make it more difficult for themselves. Sometimes in the most simple way.

Take, for example, these actual label instructions:

ON A SEARS HAIRDRYER: Do not use while sleeping.

ON A BAG OF FRITOS: You could be a winner! No purchase necessary. Details inside.

ON A BAR OF DIAL SOAP: Directions: Use like regular soap.

ON A SWANSON FROZEN DINNER: Serving Suggestion: Defrost.

One final thought regarding engagement, co-creation, and loyalty: There is nothing more frightening than stupidity in action.

Customer Lifetime Value (CLV)

The phrase “customer lifetime value” has made its way into mainstream marketing lexicon and, as we specialize in loyalty, we think it’s a pretty critical metric. There are some nuances of which you need be aware, but when you’re talking about ”lifetime,” the actual life span of your customer comes into play too.


So, for those of you counting, the current average U.S. life expectancy is calculated to be 77.9 years. That’s 2.1years more than a decade ago, and 8.3 years greater than it was in 1955. Women continue to live five years longer than men. The report is strangely silent as to the precise reason for that, but there it is.


Anyway, someplace in the planning equation you are going to have to factor those numbers in. But you primarily need to understand what will engage the consumer with your brand; how the consumer views the category, and to what degree they actually participate in the co-creation of values process. Age also affects what people expect from their brands, so you need to have a fix on those as well.


Happily, appropriately configured engagement metrics can provide all that for you. So it does matter that you integrate engagement metrics into your marketing toolbox.


Age, on the other hand, is strictly a case of mind over matter. If you don't mind, it doesn't matter.

Wake Up and Smell the Profits

We track the Coffee category in our Customer Loyalty Engagement Index. Respondents self-select categories and brands for which they are, in fact, customers, and those are the brands they rate.

But brands themselves only get listed if enough respondents describe themselves as “customers.” So we haven’t been surprised to find that, for the past few years, McDonald’s hasn’t been showing up on our final list (They do show up in the Fast Food Restaurant category). They sold, of course, a lot of coffee, but in the past it wasn’t “premium” in the way customers have come to expect, and it wasn’t consumed enough on a regular AM basis.

But McDonald’s got smart and went premium and, at last count, had added coffee drinks (costing on average 26% less than those at Starbucks) at two-thirds of its nearly 14,000 stores over the past year. And in a Consumer Reports taste test, they beat out all comers.

So in looking at some of the Wave 2 Customer Loyalty Engagement Index data we weren’t surprised to find the following rankings:

1. Dunkin’ Donuts
2. McDonald’s
3. Starbucks
4. Krispy Kreme

As usual, the loyalty and engagement metrics correlate nicely with sales, and profitability, with McDonald’s posting August same-store sales of +8.1%, with analysts predicting that McDonald’s shares will rise 18% in the coming year. Shares of Starbucks are down 24% this year, and they’re down from #1 in 2006.

So we think that it’s fair to say that from a loyalty perspective the only thing more stimulating than a good cup of coffee are increasing same-store sales and bigger profits.

The Art of Engagement!

In motivating people, you've got to engage their minds and their hearts. That’s a paraphrase of Sun-Tzu, whose philosophies in the classic Art of War have been applied to many business situations.

It came to mind particularly because Brand Keys is sponsoring the Advertising Research Foundation’s ThinkShop on Engagement in New York City today, and one of the critical difficulties some companies have about “engagement” is that they seem to have a war going on between the metrics of the “mind” and the metrics of the “heart.”

Most companies have lots of competent mind-metrics, AKA “direct inquiry questions,” but nothing in place to measure “hearts” AKA “the emotional bond created between the brand and the consumer.” And you really have to because it turns out that most of the decision to engage with one brand over another is more emotional than it is rational. Generally speaking, we say the ratio is 70:30, but in some categories it more than that. For absolutely sure is, it isn’t 50:50 anymore.

But peace is at hand. There are predictive engagement measures available. Brand Keys’ version utilizes a metric that is a fusion of cognitive psychology and some really smart higher-order statistical analysis. It identifies the Ideal for the category in which you compete and shows you what people really expect from the brand with which they will engage. But only if you manage your brand so it better meets – or even exceeds – those expectations. If you do that you will see more positive behavior toward your brand, have increased sales, and higher profits.

Knowing how to engage consumers inevitably brings about the right result; Knowing that ought to bring you some peace. It’s only the transition from “mind” to “emotion” where the conflict comes in.

Who Wants Their MTV?

MTV the then-innovative cable TV network was launched 26 years ago. Their raison d’être? To show music videos. It’s celebrated ad slogan, "I want my MTV" became part of the popular culture. It was new, it was innovative, it was a brand that resonated with the values of its audience.

But that was then. The MTV brand has lost some of its luster of late. Some of the tarnish is due to the network’s slow response to changes in how music videos
are watched in the 21^st century and how invasive on-line social networking has become. In response to the current cultural-cum-media state of affairs, Amy Doyle, MTV’s SVP of music and talent was quoted as saying, “The key is being everywhere, but being everywhere in the way the audience wants.”

Well, that’s a start. You have to acknowledge the problem before you can address it. But “more” or “everywhere” is not necessarily better. To paraphrase George Orwell, “all media touch points are equal, but not all media touch points are equally effective.

No, it turns out that some touch points are far more powerful than others when it comes to engaging consumers. Or being deemed more believable in regard to the brand message. And far more efficient and effective in engendering positive behavior toward the brand. And that’s what you want, of course, but it’s all driven by how the media touch points actually reinforce your brand’s values. And real Engagement metrics can identify that for you.

On Monday, September 11^th we’ll be presenting “The Interaction Of Media Context and Brand” at the Advertising Research Foundation’s ThinkShop on Engagement.

You can find more information at http://www.thearf.org/events/upcoming/thinkshops.html

We hope to see you there.

Live From Iraq. It's Katie Couric!

Trading her anchor desk for a war zone, Katie Couric will be reporting for 12 days from Iraq this month. If you think this sounds more like a Bush version of a “surge,” you’d be right, because reporting from Iraq is a tactic CBS is putting into place to try and engage more viewers.

When she premiered a year ago 10 million viewers tuned in. Last week the audience was closer to 6 million. You do the math. (Note to CBS executives and news producers: There is a BIG difference between curiosity and real engagement.) For the year, the “CBS Evening News” has shown a 9% decline. NBC is #2, and only ABC with Charles Gibson has shown a gain. (OK, it’s only 3%, but these days the networks are willing to take what they can get!)

And if it sounds as if Couric is being made the fall-gal, well, that’s as it should be. The first most-important engagement and loyalty driver for evening news shows is ”The Host.” And since real engagement metrics should correlate highly with how viewers behave, we weren’t surprised to find that our 2007 Customer Loyalty Engagement Index revealed the following rankings for the shows we assess:

1. ABC
2. NBC
3. FOX
4. CNN
5. CBS
6. MSNBC

Given current viewer engagement levels, one is forced to wonder whether a 12-day trip will reinforce CBS Evening News brand values or will end up being regarded as just another retouched photo op.

Alexander Pope noted that “hope springs eternal,” and perhaps that’s the sentiment around the CBS newsroom these days regarding Couric’s temporary change of venue. Of course, given the ratings, the basis of their optimism may just be sheer terror!