While it had a strong Nov. 14th launch, Microsoft’s Zune has failed to maintain the momentum it created that week. Information Week reported Tuesday that Zune had 9% of unit sales and 13% of revenue during its launch week, but that it was still far behind iPod sales, which accounted for 63% of unit sales and 72.5% of revenue that same week. Zune also failed to touch the iPod on Amazon’s top sellers list - it rarely made the list at all this holiday season.

The buzz Zune created in the market has been largely around its potential to be the ‘iPod killer.’ Zune rarely earned exclusive coverage and has been evaluated, in most news articles, based on how it compares to the industry-standard iPod. This is typical for a new entrant to a market with such an entrenched leader, but it means that establishing its own identity will take time. The chart below shows only a small blip of exclusive coverage for Zune (not shared with the iPod) during its launch week.

Microsoft will have to change the public’s concept of a portable media player to beat the iPod in the long run. But, in the short term, it will first have to prove that it’s an equal substitute. This may be why Microsoft officials have said they are satisfied with initial results of Zune sales that seem to only scratch the surface of the market.

Beating the iPod also means that Microsoft will have to beat iTunes. MediaPost covered a Hitwise report today showing a 413% increase in iTunes store visits on Christmas Day. This represented a 110% percent increase over the previous year and placed iTunes fourth on the Hitwise retail index. Zune Marketplace was nowhere to be found. This is likely due to the relatively low amount of coverage it received compared to iTunes.

Does this mean that Zune and Zune Marketplace are destined to meet the fate of others who have tried to knock Apple off its digital music throne? Not necessarily. But it does suggest that if it happens, it won’t be a quick hit, but rather a slow etching away of its market share. All of the players in the space lose points in eyes of consumers for issues like digital rights management (DRM) that limit the way someone can access and share music. Until one provider develops a digital music solution that allows anytime, anywhere access to music on consumers’ terms, the playing field could still change.

For more analysis on Microsoft Zune, please click here to visit our Industry Reports section.

I attended the annual WOMMA Research Symposium
today in Washington D.C. and had the opportunity to listen to and talk with some of the leading thinkers on word of mouth marketing. What became clear over the course of the day is that there’s a lot of good research on how word of mouth (WOM) works and how to measure individual campaigns, but the industry is looking for more guidance on how to sell WOM to senior management to secure budget, how much budget to put toward WOM in an integrated campaign and how to compare WOM metrics and results to other marketing metrics.

Research from Ed Keller of the The Keller Fay Group reminded us that the majority of WOM is still happening offline (90% if I recall correctly). Still, there’s strong and growing demand to measure what’s happening online. This is partly due to how fast the channel is growing and partly because technology makes the job much easier than it’s been in the past. Forrester’s Peter Kim led a panel to discuss the reasons why. It included six of the seven vendors from his Brand Monitoring report - Maxine Friedman (Brandimensions), Max Kalehoff (BuzzMetrics), Howard Kaushansky (Umbria), Jim Nail (Cymfony), David Rabjohns (MotiveQuest) and myself.

While not everyone agreed on the importance of measuring traditional media to understand how word of mouth is generated (a position Biz360 supports), we all agreed that technology is an important enabler for making sense of social media - the millions of thoughts, ideas and creations posted to the Internet everyday. Human analysis remains an important component, however, for understanding the finer nuances of language (Biz360 uses machine-learning techniques that rely on regular human analysis and input to take technology as far as it will go). The session ended with vendor recommendations on what questions companies should ask themselves before investing in a brand monitoring solution. A few of the top questions were:

• What are my program goals?
• What resources do I have internally to support a monitoring/measurement program?
• What level of service (involvement) do I expect from the vendor?
• How confident am I in the vendor’s ability to deliver insight, not just data?
• How frequently do I need information and to what depth?

There were several great presentations over the course of the day. Jim Nail presented research on the word of mouth of cereal brands, which he confessed was not an exciting topic and didn’t generate a lot of content. What I found interesting though were the motivational categories he used to break out the WOM - health & wellness (Wheaties), parental (Cheerios), nostalgic (Count Chocula), etc. Biz360 conducted similar research on yogurt brands and also found a relatively low level of social media content (yogurt isn’t nearly as exciting as Paris Hilton or Nintendo Wii, so we weren’t surprised). What we did find was that the health-based messages appearing in social media were coming from the health & wellness publications. This is a good example of how traditional media can drive word of mouth. Companies looking for word-of-mouth influencers only among consumers are stopping short of their ultimate goal.

For the full list of today’s presentations, check out WOMMA’s Web site. I believe you can also order audio recordings of the presentations after the event.

AdWeek published an article today by Wendy Melillo and Joan Voight called World on a String that outlines the good, the bad and the ugly when it comes to consumers’ increasing power over the fate of brands. They explain that whether unprompted, such as the Mentos-Diet Coke video that gained fame on Revver and You Tube, or prompted, as in Chevrolet’s consumer ads gone awry, there’s little a marketer can or should do to push the direction of the customer’s brand experience.

In the end, more attentive listening to customers throughout a product’s lifecycle is the best way to avert unwanted negative word of mouth.

How many criminals does it take to steal McDonald’s brand? A trick question you say…

McDonald’s has built one of the world’s most durable brands around efficient, consistent and low-cost food. People save time and money going to McDonald’s - and they know what to expect from the experience. Of course, four men robbed a McDonald’s in Lauderdale Lakes, Florida, last Saturday by gunpoint providing an experience far beyond expectations. At other locations, you might have a McDrug Deal, get carjacked in the parking lot and or shot on your way home. The security at a high school in Philadelphia can monitor the McDonald’s across the street. Why? Because you might be shot at McDonald’s for showing disrespect (this one happened in London, so it’s not just us, but it may be Western culture’s own brand of extremism).

It’s not just in the news. Bloggers are talking about these things. So much, in fact, that blog posts on crime at McDonald’s outweighs conversations about its breakfast menu (there is some overlap though, like this blog post talking about someone who was run down in a McDonald’s parking lot after eating breakfast there).

Share of Key Issues and Messages for McDonald’s
3 Months of Blog Postings

And while analyzing the Blogosphere is a great way to get a sense of public discourse, there’s nothing better than good old-fashioned news media to pinpoint where the problem areas are (this may change soon, if geotagging takes off).

Top Publications Covering McDonald’s and Crime
3 Months of Media Coverage

But don’t expect local issues like crime to stay local. A local news attack at a Grand Prairie, Texas, McDonald’s was posted to You Tube where it was viewed 3,685 times in the four months between when it was posted (8/2/06) and when I checked it today. And it doesn’t stop there. Bloggers, like Dread Egos, post the You Tube video to their blog. A Google search for “McDonald’s” and “sucker punch” turns up 32,600 results. That’s not many compared to the 16,900,00 results that come up for McDonald’s, but “McDonald’s” and “crime” turns up 1,750,000 results (NOTE: the actual search results for McDonald’s, the company, would be less than a pure “McDonald’s” search and the content having to do with crime would be greater than the results from a simple “crime” keyword search).

Since McDonald’s is everywhere and crime is everywhere, you have to expect this is going to happen from time to time. But, is there any brand impact? And what could McDonald’s do about it? Knowing that it’s a topic of discussion greater than many of the products and messages being promoted is a big red flag that you might need to take action. Using local PR strategies to balance out negative perception is a good start, but in world connected by social media, that’s not enough. In the absence of a full-fledged corporate strategy to minimize crime at the stores, going beyond messaging to show some level of action is always ideal (in-store metal detector perhaps, remove shoes, toss liquids…).

I looked for some research on this topic and found a great article on the impact of corporate crimes, but not on the occurance of crimes during the brand experience. I’d like to conduct a study to find out what percentage of people who have experienced a crime at McDonald’s first hand will no longer eat there. Then ask the same question to people who heard about a crime from someone else? What’s the fall-off rate as you add more degrees of separation. You would have to take into account the number of times someone has heard about a crime, over what period of time and whether the negative impact was per location or at the brand level.

Ultimately, you could figure out the ripple effect of each crime and how many it would take to significantly impact McDonald’s brand. Then you could answer the question - how many criminals does it take to steal McDonald’s brand?

I spent the last two days at a Carson Workshops summit called The Future of Web Apps, which featured speakers from some of more promising Web 2.0 players and thought leaders. There’s a great write up on the conference at CenterNetworks, which is a good place to get a summary of all of speakers’ presentations.

One of the big takeaways for me is the buzz around translating the best consumer-focused models of Web 2.0 to the enterprise. Web 2.0 is about collaboration, sharing and communities. Enterprise marketing applications have made strides in all of these areas, but today don’t offer the same simplicity or the ability to capture (enterprise) community decision-making in real time.

Kevin Rose presented the story of how he started Digg and grew it to be the phenomenon it is today. This is one of my favorite models and a great example of real-time decisions being made by large numbers of people. He said that all of his marketing has been word of mouth, which goes to show that “listening” can sometimes pay off more than “marketing.” The best part of this session was seeing his response to a question I had been dying to ask him - have you considered posting your product roadmap and allowing users to “digg” and “bury” upcoming product features? I knew what the answer would be and he still let me ask my real question about how he translates user feedback to a product roadmap. To my surprise, it’s just reading a lot of incoming emails from users.

Another presenter who impressed me was Carl Sjogreen, who is the product manager for Google Calendar. He talked about the need to submerse yourself in your client, so you can understand them beyond the features they want in your product. In an increasingly connected world, I couldn’t agree more - we’re innundated with large amounts of information pieces and truly understanding your audience requires good old-fashioned human contact. He gave some examples of the insight that came from this approach. One assumption is that calendars are for busy people. Through discussions with college students, he learned that they’re incredibly busy, but they have regular schedules, so many of them don’t need calendars. He also talked about staying focused on the real competition for this product, the market heavyweight that remains unseated with the most competitive set of features - the paper calendar.

Jeff Veen, the project lead for Google’s Measure Map, gave an inspiring presentation on design, from visualization to information architecture. Turning data into simple images that conveys information and meaning is at the heart of what we do at Biz360. Veen talked about using design to build trust by empowering users to do what they want. We agree that giving clients more control to see information how it best suits them creates a postive user experience.

There were lots of other great presentations on building communities, finding business models that work and why passion is the number one ingredient for success. There were also a lot of other great speakers that I didn’t mention, so I encourage anyone interested to read more at Techmeme and check out the photos on Flickr.

On August 15, 2006, a media flurry began when Dell announced it was recalling 4.1 million laptop batteries manufactured by Sony, the largest safety recall in the history of the consumer electronics industry. Overheating batteries have been causing laptops to catch fire or explode. The following week Apple recalled 1.8 million laptop batteries, also made by Sony.

Seeing two of the industry’s most polar-opposite brands pulled into the same debacle made us wonder how the media treatment would play out. We looked at the tone and visibility of Dell and Apple’s battery woe media coverage and noticed Dell had far more visibility and negative tone than Apple.

Media Coverage by Tone
Dell and Apple Battery Problems, August 2006

MediaSignal^TM is calculated by adjusting the reach number for each article based on how prominently the subject (Dell/Apple) is mentioned and then adding together the adjusted reach numbers for each company’s total base of news articles. This chart is based on 6,986 online, print and broadcast news articles for Dell and 5,270 for Apple. Green corresponds to positive MediaSignal, blue/gray to neutral and red to negative.

One reason for this discrepancy in tone is that Dell was first to recall the Sony batteries and in that initial burst of coverage, Apple came forward to say that it was looking into the matter and examining its own Sony laptop batteries. Was it Dell taking a proactive lead on critical safety issues? Engadget and other blogs had been following the saga laptop by laptop, calling it to Dell’s attention. If you take a look at discussion of Dell and battery problems in the Blogosphere, the writing may have been on the wall for awhile.

Newscycle Report
Blog vs. Media Coverage for Dell Battery Problems

The chart shows the media coverage in volume (blue) over time compared to blog posts (gray) over time for discussion of Dell and battery problems.

InfoWorld reported that Dell and Sony knew about the problem as far back as 10 months ago. According to one Slashdot comment, Dell registered www.dellbatteryprogram.com on 11/10/2005, possibly anticipating a recall. One thing is certain though - with upwards of 50 millions blogs containing the personal experiences of millions of people, there’s no need to wait for customers to come to you. Public information on the Internet is often a better source of data for understanding your customer’s experience with your product.

On July 13, 2006, Unilever launched their Sunsilk hair care brand in the U.S. with a twist – it’s using three gay men to sell the idea of “Hairapy” (three hair products that act as therapy) to women in a $200 million marketing campaign. According to AdWeek, as much as 15 percent or $30 million of the ad budget is going to non-traditional media, such as mall displays with audio, a MySpace profile and 3-D displays in bars.

Unilever is no stranger to out-of-the-box thinking, its Dove brand “Real Beauty” campaign generated buzz in June 2006 with ads featuring “real” women instead of traditional models. What’s interesting is that the Real Beauty campaign is getting more media attention today, a year later, than the Sunsilk launch.

Media Coverage (% of Marketplace)
7/1/2006-8/23/2006

NOTE: This chart shows media coverage for Dove’s Real Beauty campaign (total = 48), Sunsilk (total = 42) and specific mentions of “Hairapy” (total = 10) from July 1, 2006 through August 23, 2006. The coverage is shown as a percentage of overall coverage for Dove, Pantene and Sunsilk combined and does not include mentions of the Sunsilk launch in recent Unilever earnings coverage.

Is the implication here that using real women to sell products to women gets a bigger reaction than using gay men? Not necessarily. The Dove press release is much more explicit about its approach than the Hairapy press release, which doesn’t outright say the spokesmen are gay (it uses phrases like “coming out party” to make the suggestion). In fact, words like “gay,” “queer” and “homosexual” appear in less than 20 percent of Sunsilk’s launch coverage, which suggests an equal amount of reluctance on the part of the media to state the obvious.

Sunsilk’s messaging was slightly different on its MySpace profile created for the launch – “Three gay guy girlfriends who give it to you straight.” Did Sunsilk lack the conviction to give it to the media “straight”? Maybe, but leaving the message open to interpretation for the broader media on a potentially hot-button issue, some of whom might disagree with the tactic, and delivering the overt message directly to your target audience through MySpace might just be smart marketing.

The MySpace crowd seems to agree. GetHairapy had 5,569 friends when I checked today. There’s also a higher percentage of discussion about Sunsilk among bloggers.

Blog Coverage (% of Marketplace)
7/1/2006-8/23/2006

NOTE: This chart shows blog posts for Sunsilk (total = 781), Dove’s Real Beauty campaign (total = 160) and specific mentions of “Hairapy” (total = 57) from July 1, 2006 through August 23, 2006. The posts are shown as a percentage of overall posts for Dove, Pantene and Sunsilk combined and does not include mentions of the Sunsilk launch in Unilever earnings discussions.

The branding of “Hairapy” on the other hand still needs a little work, but the message is clear - tailor your message to your audience. And then take that message directly to them.

Forrester analyst Peter Kim offered this update today on the Forrester Brand Monitoring Wave being published in September. Biz360 is one of a handful of vendors being evaluated in what will likely be the most in-depth review of our space to date. I can’t say much about this while the review is still in progress, but I’m confident the attention from Forrester will help marketers understand 1) the importance of monitoring brands across new and traditional media channels and 2) the differences between the service offerings available.

Setting the stage for this Forrester Wave, Peter recently published his views on Reinventing the Marketing Organization (July 13, 2006). One premise of his piece is that large media buys are becoming, and will continue to become, less effective for generating brand loyalty and revenue. He recommends starting to move those dollars toward technology investments that help marketers 1) understand customer preferences better and 2) create more meaningful experiences for customers.

Note the movement of money bags in the chart above from large media buys –> customer-centric technologies, including brand monitoring. Who knew corporate vaults still had Scrooge McDuck-style money bags?

Source of graphic: Forrester’s Reinventing the Marketing Organization by Peter Kim, published on July 13, 2006. To purchase the full report, click here.

We’re launching MarketIQ today to fill a gap we’ve been seeing in marketing blogs. We find plenty of surveys, stats and commentary on the changing media landscape and its impact on marketers. What we see less often are data-driven examples of the changes taking place.

We’ll contribute to the conversation primarily through market analysis on current events, work that we’ve done with our clients, and other interesting examples we run across. From these discussions, we hope that strategies for leveraging social media and new perspectives on age-old marketing issues will emerge.

That said, we won’t be able to resist sharing interesting research, our own commentary or the occasional update on our company, so expect some of those posts as well.

As our founder, You Mon Tsang, always says – we’re helping marketers balance the art with science. We’ll supply the science and our perspective. We’re hoping you’ll bring the art. After all, it’s how you interpret and use intelligence that makes all the difference (just look at the ongoing political debate over U.S. intelligence for a great example of this subjectivity).

A little bit about me… my name is Brian Glover and I’ve been with Biz360 for four years (which is at least 12 in start-up years). I’ve worn many hats, from PR to product marketing, and have been focused most recently on our blog analysis offering. Before I came to Biz360, I worked in the PR department at Documentum (now part of EMC) where I was a Biz360 client. Before that, I spent two months making pizza and cinnamon buns on Whistler Mountain in Canada while living as a victim of the dot com bust (a story for another time).

In the spirit of openness, I’d like to start off addressing a question we’re sure to get – why are we just now launching our blog? I’d like to say we’ve been too busy researching blogs, building great blog analysis technology and developing services to show our clients the impact of new and traditional media on their business (that wouldn’t be completely far-fetched), but the reality is there isn’t a good enough reason for not starting sooner. As a new participant, we look forward to your feedback along the way.