Winning at the Zero Moment of Truth

Google report on the Zero Moment of Truth

Jim Lecinski, managing director of U.S. Sales and Service for Google and all around good guy, has kindly given us permission to distribute his phenomenal report entitled Winning at the Zero Moment of Truth. The 73-page e-book documents the startling changes in consumer researching and buying behavior occurring as the internet, social networks and channels, content like user reviews, ratings and other consumer-generated content,  search engines and “always on” smart phones and other mobile devices converge to create a new kind of world where your brand is not what you say it is but what the consumer says it is.

In reality, the “internet of things” arrived a bit earlier than anticipated. It came in form of the Internet of US! It came about because of our iPhones, iPads, Androids and other smart, mobile devices, perpetually connected to the internet, broadcasting our likes and dislikes…our sharing, creating, commenting, reviewing and recommending. The hard cold truth for most brands is not that the technology is ahead of their marketing efforts…their customers are ahead of their marketing efforts!

Marketing model for the first moment of truth
Legacy Marketing Model: First Moment of Truth

In order to understand the Zero Moment, you have to understand the First Moment of Truth concept popularized by Procter & Gamble. It referred to the first place a brand had to win…when the consumer, stimulated by some kind of marketing communication or advertising like a TV spot, a coupon or a magazine ad stands in front of the product at the retail shelf and decides to put the brand in their shopping cart. The marketing model that goes along with this concept is simple: run creative advertising to get the consumer to be aware, to have interest, to go to a retail location and buy your product. A tremendous amount of time, money and effort has gone into perfecting this system.

graphic depiction of the zero moment of truth concept

What’s changed is huge critical moment now occurs between stimulus and shelf. It impacts every product or service category, whether it’s a considered good like a $40,000 automobile, a $2,500 HDTV or a $3 bottle of body wash. It has implications for both business-to-business and business-to-consumer marketers.

Consumers still may watch your TV spots or see you magazine ad. But they now immediately  grab their laptop or smart phone and search for reviews to see what others are saying about your product. They go to Facebook or Twitter and ask their friends if anyone has used the product and if so, what they think. They may go to YouTube and look for a vedeo of someone demoing the product…or making fun of it. Before they’ve even been able to go to the store, they have all the information they need and they’ve already made up their mind.

The Zero Moment of Truth describes this dominant role these connections, community and content are now playing in how we research, learn, search and ultimately find and buy products and services.

Jim sites several examples of zeros moments of truth in his report:

  • A busy mom in a minivan is looking up decongestants on her mobile phone as she waits to pick up her son from school.
  • An office manager at her desk, comparing laser printer prices and toner cartridge costs to determine which office supply store has the best price
  • A student in a cafe, scanning user ratings and reviews while looking up a cheap hotel in Barcelona.
  • A winter sports fan in a ski store, pulling out a mobile phone to watch video reviews of the latest snowboards
  • A young woman in a condo, searching the web for juicy details about a guy with whom she’s been set up on a blind date

Kim Kadlec, worldwide vice president of Global Marketing at Johnson & Johnson puts it this way in the report:

We’re entering an era of reciprocity. We now have to engage people in a way that’s useful or helpful to their lives. The consumers is looking to satisfy their needs, and we have to be there to help them with that. To put it another say: How can we exchange value instead of just sending a message?

That’s the question every marketer should be exploring and using to examine every piece of traditional advertising and marketing. Is it delivering value? Is it helping to answer the consumers need for information. Is is designed to engage and amplify across this environment filled with zero moments of truth. Something to think about.

Mobile Taking Over the Internet

It’s that time of year when famed Morgan Stanley analyst Mary Meeker gives her annual state of the internet presentation. During this year’s Web 2.0 Summit in San Francisco, Mary presented some eye-popping stats, including the state of mobile (Apple and Google () are winning), the most under-monetized asset in online advertising (Facebook) and even the secret sauce of Steve Jobs (he has the mind of an engineer and the heart of an artist).

Some of Meeker’s more revealing analysis:
•    46% of Internet users live in five countries: the USA, Russia, Brazil, China and India.
•    There are 670 million 3G subscribers worldwide, 136.6 million in the U.S.
•    iOS devices reached 120 million subscribers in 13 quarters, far faster than Netscape, AOL or NTT docomo’s growth rates.
•    Nokia and Symbian used to own 62% of the smartphone market (units shipped). Now it’s only 37%, mostly due to Android () and iOS.
•    The average CPM for social networking sites is at only $0.55. Meeker thinks this will increase and normalize in the next few years. She also believes that inventory on Facebook is one of the most under-monetized assets on the web.
•    It took e-commerce 15 years to get to 5% of retail. Morgan Stanley predicts mobile should get to that same level in five years.
•    Streaming video is up to 37% of of Internet traffic during traditional “TV hours.” Netflix is the biggest contributor to this, followed by YouTube.
•    Seven of the companies that were in the top 15 publicly traded Internet companies in 2004 are not in that list in 2010.
•    Interest payments and entitlement spending is projected to exceed government revenue by 2025. In other words, the U.S. government is facing a real financial crisis soon.

A pdf of the entire presentation is below:

Internet+Trends+Presentation

Infographic: How Android Is Taking Over

Cool infographic from Gigaom, showing how Android is taking over the world. Imagine how this impacts the world of virtual goods and social gaming, a topic I posted about earlier, here.

Android is taking over

via Infographic: How Android Is Taking Over.

Mobile Virtual Goods Generate 4X More Revenue Than Ads

There’s gold in them ‘thar hills of virtual stuff. According to data from analytics firm Flurry, mobile virtual goods are hot. So hot, in fact, they’re far surpassing the revenue generated from mobile advertising.

The study, conducted using data collected from leading iOS social networking and social gaming apps, shows that in September of ’09, out of close to every $2 of mobile revenue… either advertising or virtual goods…over 2/3rds went to advertising. Just one year later, not only has the amount of revenue grown significantly, the amount going to virtual goods…swords, gold coins, respect points or plum trees for farm plots…has shifted dramatically to where virtual goods now account for $8 of every $9 in revenue. And, because Google’s Android Market does not yet support in-app purchases or micro-transactions, the data doesn’t include users from this rapidly expanding platform.

Virtual goods sales were already going gang busters on social sites like Facebook. Michael Pachter, Wedbush Morgan Securities video game analyst, reports that social gaming revenue has grown from approximately $600 million in 2008 to $1 billion in 2009. Further, he forecasts that social gaming will generate nearly $1.6 billion this year, and grow to more than $4 billion by 2013. That’s a lot of quarters for plum trees on your Farmville farm.

The convergence of social and games will continue to expand their reach into our lives. In fact, social gaming is reaching a tipping point and with Wal-Mart and Verizon now selling iPads, the size of social gaming’s audience will quickly surpass prime time television viewership.

For marketers, this sweeping technology, entertainment and behavioral change represents tremendous opportunity to create highly engaging content built around the core premise of your brand, then invite consumers into a branded experience that extends far beyond your physical product or service. In fact, maybe it’s time to start thinking beyond the five “P’s” when it comes to marketing. Maybe it’s time to add a “V”. Seems plausible doesn’t it…the brand manager of the new realities has to think about Product, Price, Place, Promotion and Virtual. Can you imagine what a virtual version of your brand or brand experience would be, could be? If not, you should start dreaming. There’s money to be made for the imaginative mind.

How a $1,000 Spend on FourSquare Netted McDonalds a 33% Increase in Traffic.


Mashable reports that a FourSquare promotion McDonalds conducted in April got the fast food monster a 33% one day traffic increase…just by giving patrons a chance to win gift certificates by checking in on FourSquare. Pretty impressive, especially considering the chains customers are pre-teens, teens and busy moms. I’d say most men abandon McDonalds when they acquire a taste for real meat. I haven’t been in a McDonalds in months and I try never to eat there. Still, impressive that such a massive mass media consumer is experimenting with cutting-edge social techniques. And, good to see the promotions are working, even with such a relatively small installed base (FourSquare has just over 3 million users, according to this Mashable post). Look for location-based marketing to increase…and with it, location based spam…just like in the movie, Minority Report, where the Tom Cruise character is bombarded with useless pitches as he strolls through a shopping mall.

11 Mind-Blowing Mobile Marketing Infographics


From HubSpot, a very impressive collection of infographics showing the rise of the mobile internet and all the implications.

59% of Adults in US Go Online via Mobile Devices

The Pew Research Center just released a report on the mobile internet and an astonishing 59% of Americans are using it. This is a 51% increase from those who said they did this at a similar point in 2009.

When you start looking at the multicultural landscape, there’s even more use of the mobile internet…64% of African-Americans and 63% of Latinos are wireless internet users.

Every activity you can do with your smart phones and laptops grew year over year as well.

Ad Industry Optimism Reaches Highest Point Yet: Improves For All Media, Especially Digital and Mobile


Advertiser Perceptions Inc tracks what marketers and media buyers say they’re going to spend on advertising and there’s some good news in their recent report, especially for digital and mobile.

Of the over 1,400 decision-makers surveyed, nearly one third (32%) now expect to increase their spending over the next 12-months, making this the largest increase since API began asking this question in the spring of 2007. While print still shows negative growth and TV is flat, digital and mobile are bright spots, with 60% of executives saying they’ll increase digital and 62% boosting mobile spending.

What are you seeing at your company?

Think Local Search, Social Networking and Mobile Gaming on Mobile Devices


Compete just released it’s Smartphone Intelligence survey (redundancy there) and there’s some interesting insight into consumer behavior trends mobile is enabling. Think Local Search, Social Connectivity and Gaming.

Search

According to the survey, 1 in 3 smartphone owners has called or stopped in a local business after finding it using a local search app. In just first quarter, over a third of Android and iPhone owners discovered at least two new businesses that they were not previously aware of thanks to using these local search apps.

Social

Thirty-three percent of smartphone Twitter users post tweets primarily via their smartphones. Of those accessing Facebook via their smartphones, they’re reading news feeds, posting status updates, replying to messages and posting photos.

Gaming

iPhone owners download and play games more than any other handset owner. ..37% play games of some kind at least daily.

Implications:

Anyone with physical locations would be wise to find ways to make their presence known to smartphone users. If you’re really smart, you might want to think about a way to combine local search, social and gaming all in one…like a Foursquare or Gowalla.

via Think Local Search, Social Networking and Mobile Gaming on Mobile Devices.

Apple May Sell 1 Million IPhones in New Model’s Debut


According to BusinessWeek this morning, Apple could sell a record 1 million iPhone 4G’s today. “Could”? They already sold 600,000 on pre-order, crashing AT&T’s servers (will those guys ever get it right? You’d think a big company like AT&T could handle network issues with 600,000 people at once…but, I digress).

Personally, I already have someone lined up to buy my 3GS iPhone for a tidy sum. They get it for much less than they could from Apple because they’re going to jail break it and run it on another carrier. Me…I get into a brand, spanking new iPhone without spending a dime (well, kinda…that’s how I position it to the wifey anyway).

Since AT&T won’t be serving walk-in customers til Tuesday, there’s no use standing in line there today. If you haven’t pre-ordered the iPhone, cue up in line with all the other maniacs at your friendly, neighborhood Apple store.

On another note, I’ve been running the new iOS since Tuesday night and it sure seems snappier. Lots of cool new features but I really like organizing my apps by category and freeing up that valuable screen real estate.

Happy shopping!