Article by Corri Byrne, dLook General Manager – Like dLook on Facebook
Are businesses ready for Cloud Computing? Are we on the verge of a major corporate overhaul of systems, drivers and methods?
Cloud Computing is as useless as a Newborn Baby
A revolutionary new way of doing business is taking place. It started as information technology within business enterprises, and has now been embraced and extended by consumers. It is making sweeping changes to every aspect of today’s economies. It is radically changing the importance and speed of information communication for enterprises, individuals and demand / supply networks.
It is a revolution in network process dynamics, their creation, combination, bifurcation, recombination and patterns of behavior.
It is not being led by Chief Financial officers or Chief Information Officers, who introduced Management Information Systems (MIS) in large enterprises or technology vendors.
Consumer Driven Systems
It is being led by consumer driven dynamic networks (Facebook, Twitter, LinkedIn), who’s implications Business Information Industry leaders have in the past tended to ignore.
It is Cloud technology which is now beginning to be adopted by business and government institutions. Like a newborn baby, it presents society with open possibilities around the way we collaborate, cooperate and compete as individuals and groups.
Historically business operations were all about analyzing the year-over-year business model within the physical constrains of individual enterprises:
- Balancing capital, resources, work activities and customer service
- maintaining in-stock levels
- effective asset management and product assortments
However, customer conversion in retail is not just about setting-up a store or even a multi branded distribution network. Consumer preferences from product research to product purchasing has become multi-dimensional, it is now combined as a digital and physical experience and is geographically global in its reach. Sustainable business models must become aligned, agile and adaptive with their demand / supply value networks.
This entails orchestration, loose integration and coordination of clustered demand / supply network partners; digitally linking their enterprises, distribution centers, and business processes, into a seamless experience for the ultimate consumer of their products and services (the use of shared assets, combined business processes, social, mobile, voice, and video networks. and multi-channel retailing.
Despite the consumer / retailer relationship changing at net speed, bricks and mortar retailers have been unable to respond to this consumer led disruptive business model. Retailers are now compelled to manage product assortments and inventory across multi-brand, multi-channel and multi-distribution strategies, (what products to range, across which channels, what inventory to keep, when, where and how much to keep and distribute).
Demand / supply network partners must rethink how their combined operations interact, react, cycle and feedback to accommodate the new physical – digital retail selling environment.
Changing Consumer Shopping Experience
As Facebook, Twitter, LinkedIn, iPhones, iPods and iPads change the customer shopping experience – Demand / supply network partners need to understand how end-to-end network value is created, transformed, exchanged and consumed in this new environment.
All of these events are network driven and yet all computer business applications to date are enterprise (department) driven.
Vertical industry networks have a compelling need for dedicated real time network support (Cloud Process utilities that coordinate and manage people-to-people and system network-to-network dynamics) that cannot be predefined or pre programmed … the way that current system-to-system interactions are.
Article by Corri Byrne, dLook General Manager – Like dLook on Facebook
This article explores the Connected Consumer and why traditional marketing struggles to attain the penetration rates it used to.
Once upon a time consumers depended on retailers to access information as to which product would best answer their needs. However the advent of the web and social networks means that access to product information has been separated from the product and retail store.
In many cases consumers no longer depend on retail outlets for anything other than price comparison and availability. Now with software applications like Red Laser, consumers can use an iPhone to scan a bar code, then search online to find the best deal.
Rising Consumer Awareness
Increasingly, consumers are now better networked and more informed than many of the staff that are trying to sell to them.
When consumers choose to buy online, products are easy to identify, procure and pay for; service responsiveness and product fulfillment is just a click away, and product delivery can be tracked from source to home.
Consumers can also feel more secure in the buying decisions they make; because their purchasing decisions are backed up by online reviews, blogs, recommendations, peer support and advice that is simultaneously available 24/7. All communication is in English – or the consumer’s language of choice.
The real time process between online business and consumer is aligned, agile and instantly adaptive to market change.
This has brought about a gap out there in the market, between retailers and buyers. Retailers are using newspapers, TV and radio broadcasting in an attempt to reach buyers, and it just doesn’t work anymore.
Broadcast Spam – Consumer Filters
Buyers have too many filters available to them. Buyers can limit the content they consume by using caller ID to filter out unwanted phone calls, record television programs and skip through the commercials, or siphon off unwanted junk mail.
Consumers awareness of spam has crossed over to all forms of marketing.
Marketers assume a 1.0% response rate to broadcast marketing campaigns, which is fast turning out to be clearly ineffective.
The Dell System
Consider the worldwide manufacturing operations of Dell Computer. When a consumer designs their computer online, Dell beams that demand signal to its 30 tier-1 and 400 tier-2 suppliers scattered across the globe, they all work asynchronously, against their own clocks, using human and system resources in non-predetermined ways.
That solves the critical challenges in synchronizing the 20% exceptions that must be dealt with in real business— which consume 80% of resources—if an enterprise is to achieve a sustainable competitive edge.
Consumers can stay in touch with their purchase product’s journey manufacture through shipment to final delivery; and the consumer can continue to have ongoing direct relationship with Dell’s support desk without any retailer providing middleman assistance.
The retailer no longer offers any value add to the equation; unless the consumer requires finance.
The question then is how long it will be before finance is tied to online purchases?
Constantly Connected Consumer
The Universal 2008 McCann Report: Power to the People, Social Media Tracker stated:
- 57% of Internet users have joined a social network
- 73% have read a blog
- 34% post opinions about products and brands on blogs / social media networks
- 36% think positively about companies that have blogs
- 83% have viewed video on multimedia channels
- 184 million people worldwide actively maintain a blog
These figures are rising with each year … so where is the future for disconnected retailers?
Improve your online presence and market awareness with dLook online business directory.
According to the International Telecommunications Union, Australia has over 15 million internet users (close to 75% of the population).
According to Nielsen online 8,987,000 Australian internet users searched Google in the month of April 2008. It’s also interesting to note that, according to the same source, visitors on average will spend just 52 seconds on a web page.
In Australia in 2007, $1.346 billion was spent on online advertising in Australia. This was an increase of 34.5% on 2006 expenditure (source IAB).
The IAB groups online advertising into 3 categories – the break-up is below:
- General Display – $367 million (27.3%)
- Classifieds – $356.75 million (26.5%)
- Search and Directories – (46.2%)
In 2007 the fastest growing sector was search and directories – growing 56%.
Search advertising is advertising that is placed on search engines like Google, Yahoo!, Ninemsn (which uses Yahoo! advertising) and Sensis. The idea is that when a user types in a search term that matches a term that an advertiser has targeted, their ad will display.
It generally consists of a very short advertisement of just four lines. The heading (around 25 characters long), two lines of text (around 35 characters long each line) and a display URL (the destination you will arrive at if you click on the ad).
Advertisers bid an amount that they are prepared to pay for each click. In the case of Google AdWords, the amount an advertiser ends up paying per click will depend on the “quality score” of the advertisement, how relevant the ad is to the search term, the relevance of the page the visitor lands on, the amount of clicks it receives (in proportion to the number of times it is displayed), and also the amount of competition.
This model of advertising is called cost per click or pay per click (CPC or PPC for short), because the advertiser only pays when someone clicks on their ad. Depending on the industry, clicks can range from a few cents to tens of dollars per click.
These types of ads take a similar, although not necessarily identical, format to search ads. These ads are typically displayed on a page because they are relevant to the content on the page, not because someone has necessarily searched for that term. These ads can be text or images. Pricing can be CPC, or CPM (which is the cost per 1,000 impressions).
Directory advertising consists of online business directories – the most popular ones being Yellow Pages, dLook, TrueLocal and Hotfrog. There are also a lot of free directories and others that have been formed for specific industries (niche directories).
While printed directories have been available for many years, the movement to online has enabled directories to offer more for consumers and also advertisers. Advantages for consumers include the ability to quickly search by keyword or business name in very defined local area, being able see business reviews and more information about the business as well as being able to click through to a website, send off a quick email enquiry or request a quote all in the same session.
For advertisers the advantages include being able to write more information about their business and the products and services they offer, the ability to link to their email and website, as well as load video commercials and pictures.
Display advertising is often served on a website by a digital media (advertising) agency, though some sites may have their own in-house ad servers. Many sites are also offering banner placements through Google as well.
Typically, banner advertising is paid on a CPM basis, though may also be offered on a CPC or CPA (cost per action). An example of CPA might be a financial institution that offers $X for each successful credit card application they receive. The CPA model is very popular with affiliate programs.
This form of advertising is popular with people (and businesses to a lesser extent) selling products. Cars and jobs are the most popular types of classifieds. This type of advertising was once popular with tradesmen.
Online Spending 2008
Expenditure on online advertising continued strong growth in the first quarter 2008 – increasing by 30.8% compared to the first quarter of 2007 (or around 1.5% on Q4 2007). This was the largest first quarter spend since reporting commenced in 2002 (source).