Who ya gonna trust?

The announcement that Bing will incorporate Facebook likes into search rankings is a big deal.  All of a sudden, the mechanistic algorithms that determine what we see when we do a search will get a helping hand from real live human beings.  Search results will be influenced by Facebook likes in general and more specifically by your friends (if you happen to be logged-in to Facebook at the time).

This is a game changer in four ways:

1. The Bing brand of search just became a lot more differentiated.  My curiosity to see what the crowd and my friends like in search results will cause me to use Bing more.
2. We all have more incentive to make Facebook an "always on" utility in our online lives.  Welcome even more Facebook ubiquity.
3. Knowing my vote really will be counted when I like a brand will cause me to like brands on more occasions while making me a little more selective in awarding my endorsement.
4. Facebook likes just became a much more important tool for businesses seeking to improve their page rank in search.  Gaming the algorithm with clever page titles and link building campaigns could take a backseat to cultivating Facebook likers if this initiative succeeds.

The trend of aggregating active human endorsement in search is bigger than this Bing announcement.  Google is making strides toward social search with it's plus-one initiative.  Social search is where things are headed because it's human nature to trust in your friends' opinions.

The implications for marketers are profound.  Delight a customer and step to the front of the line to be found by others.  Offer an average customer experience and be consigned to invisibility among the herd of the mediocre.  Disappoint or anger the customer and end-up on page 29 of search results.

Smart brands will not only improve their customer experience but will solicit likes by showcasing less tangible aspects of their brand that appeal to people on a values level.  A brand's enlightened environmental, sustainability and labor practices are all now potential marketing tools.  The issue cuts both ways.  Polluting a local stream or off-shoring jobs could have a substantial marketing cost if the Facebook community takes note and decides to get active.

This is going to be interesting.

Greed can be good. Ask Mother Earth.

I've been saving this post for Earth Day because Bloomberg's decision to carry environmental information on its financial news terminals is indeed a gift to Mother Earth.

Paul Tullis at Fast Company expertly reported this decision and the rational behind it earlier this month.  Bloomberg is catalyzing an emerging truth on Wall Street: A positive environmental track record is a good indicator that a company is well run and is more likely to offer superior financial performance over time.  Now Bloomberg is supplying the numbers financial wizards need to track and price this theorem into valuations.

This blog has focused on the consumer side of the sustainability is good business debate - suggesting that consumers more and more choose brands that act with integrity toward customers, employees and the environment.  Bloomberg's action has the effect of enlisting the almighty hammer of the capital markets in the cause.

This will get the attention of the corner office crowd.  Companies will look for ways to improve their ESG (environmental, social and governance) scores because there's money to be made doing it.  Altruism is nice but in the end, it's behavior that counts.

This is an opportunity for the smart marketing executive to bring ESG issues into the boardroom.  A significant improvement in ESG will improve not only the stock price but can provide a real and meaningful point of differentiation for consumers making purchase decisions (read; good ESG = free marketing).

I've become more and more skeptical that government will ever have the fortitude to come to the aid of the environment in meaningful way.  The challenges are too big, too immediate and big money is too entwined in the workings of Washington.

I'm heartend this Earth Day by the vision of Wall Street and engaged consumers doing what government can't by making sustainability not only a priority but profitable.  Mr. Gekko, meet Mr. Gore.  I think you two have something to talk about.

Will Facebook help you choose your groceries?

I've been preaching the Transparency Gospel for over three years - suggesting that as technology allows more people to find out how good a product really is (from objective experts or digitally aggregated peers) it will become more and more important to actually have great products.

The theory is a no-brainer in considered purchase categories. But even I wondered if this behavior would ever trickle-down to the grocery store shelf. Will people actually take the time to compare the ingredients or the carbon footprint* of two different brands of baked beans?

Apparently people will take the time and are interested in these rational issues when it comes to food purchases. As reported by Marketing Charts, Deloitte's new "2010 Consumer Food Safety Survey"spells it all out. As you might expect, most of the study relates to food safety but a few of the findings have broader marketing implications. First, people are going online to do their homework prior to shopping shopping for food items: Twenty three percent of consumers visited a food company's website to get product information while 23% of consumers made a food purchase as a result of something they read online.

More interesting was the impact of smartphone technology. As the chart below illustrates, 7% of people have used their phone in-store to learn about potential purchases (click chart to enlarge).


These data demonstrate people have an appetite for detailed and objective information regarding their food purchases. Technology is filling a need that apparently is not being met on the package.

Where is this going? According to comScore, approximately 17% of the U.S. (age 13+) had a smartphone in December of 2009. That means over 40% of those with the ability to use a smartphone while shopping for food did so. Multiple sources predict smartphone penetration to increase to 40 or 50% in the next 24 months. Assuming the rate of usage for food shopping stays flat, that would translate into 16-20% of food shoppers using their smartphones to learn about food products in the store. To be sure, we don't know frequency of use or the actual impact on what was purchased. Price comparisons and coupon hunting are a big part of this dynamic. But this behavior is more than incidental and it's bound to increase.

The quality of information available in-store will only get better. The folks at GoodGuide provide detailed information regarding the health, environmental, and social impacts of over 70,000 products in your home. Their clever iPhone app is no doubt driving some of the in-store usage unearthed by Deloitte. Walmart's sustainability index initiative will surely catalyze this transformation.

And yes, I imagine someone at Facebook has mocked-up a "Liked" product rating index calibrated to the tastes and preferences of your very own social network. Your old high school girlfriend may finally add some value by helping you pick the right can of baked beans. Seriously, every aspect of a product - good and bad - will soon be transparent. How will marketers respond when their product is naked on the shelf?

In this environment, Job One for marketing will be to make the product and usage experience extraordinary. Domino's recent moves to improve their product show that this strategy can drive significant increases in sales (see It worked! below).

Smart shopping at the shelf will also impact other elements of the marketing mix. Traditional product demonstration and affinity advertising strategies will likely have a hard time competing with hard data in the store. How many FSI drops or TV target rating points will it take to top the impact of significantly superior quality or sustainability score - not to mention a timely digital coupon? If trends continue it may well become less expensive to differentiate and gain market share by improving product quality or how that product is made, shipped or recycled. A bigger question is how many TV TRPs will it take to counter a negative product performance issue? It's going to get interesting. Fast.

* measured prior to consumption

Walkin' the talk

Fast Company today details 11 Ways That Walmart Is Changing Retail -- for Good with respect to sustainable business practices. These are the same 11 ways Walmart is differentiating itself from most other big box retailers by demonstrating extraordinary social integrity. Not surprisingly, these are also the 11 ways they will probably save significant money over the long run.

Perhaps a better title for this article might be "11 ways Walmart won't have to compete on price." It's a fun slide show worth a few minutes of your time. Last post on Walmart for a while. I promise.

Attention shoppers: Zero landfill corn chips are now available in aisle nine.

Great article by Kate Rockwood in the new Fast Company on Walmart's Sustainability Index.

What caught my eye was a quote from the Walmart SVP of Sustainability, Matt Kistler. He said of this initiative, "it is creating a new level of competition in ways that, historically manufacturers have not competed." Kistler went on to confirm that high-scoring products will earn preferential treatment -- and likely more shelf space -- in Walmart stores.

There. It's official. In addition to how well your product does what its supposed to do and how much it costs, there will soon be a third horse in the marketing race - the impact of the product (and company that makes it) on our planet and society. Shoppers won't be at the mercy of "greened-up" packaging or vague sustainability claims thanks to this quantified and verified index.

Will a killer carbon footprint rating trump a super Sunday supplement coupon offer? We'll have to wait a little longer to find out but thanks to Walmart's clout, it looks like this is really going to happen.

Read the article here.

Wal-Mart changes the game

Wal-Mart’s announcement today that they are planning to make the "social and environmental impact" of the products in their stores easily visible to customers is certainly interesting and the most visible evidence so far that I may be on to something with my Transparency Principle™.

Not only does Wal-Mart create a new way to differentiate their shopping experience on a basis other than price, they will likely save money and lower costs for customers over the long run. Their tag line, “Save money, live better.” certainly takes on a new dimension.

I think a bigger ramification is the legitimization of a new paradigm for consumer brand differentiation. Clever brands will find a way to lessen their footprint and get paid for it when consumers vote with their purchase decisions. Sure beats trying convince someone your laundry detergent is better because it contains "fluorescent whitening agents." This initiative could eventually do more for the environment than any governmental regulation.

Do you think Wal-Mart will succeed in forcing/enlisting other retailers to play ball with the same rating system?