Showing posts with label study. Show all posts
Showing posts with label study. Show all posts

Saturday, October 9, 2010

CNN Says Shared News Leads to Advertising Engagement

CNN has a nifty new study they call POWNAR which stands for “power of news and recommendation.” For the study they tracked the sharing of news through social networks and they also used eye-tracking and biometrics to study engagement. Told you it was nifty.

First, they took a look at the kinds of news stories that were being shared by the 2300 participants in the study. What they found was that people shared stories in order to “impart knowledge,” which is kind of a given, isn’t it? Only 19% of shared stories were considered breaking news. The 65% majority was ongoing stories with what CNN called “quirky” stories making up the rest. But it’s not crime or politics that is lighting up the virtual airwaves. It’s science, technology, human interest and money-related new stories. Technology is a given seeing as that’s the vehicle we’re using to drive this herd in the first place but I was a little surprised by the others. They also mention “visually spectacular” news, which I take to mean things like fires, floods, snowstorms and UFO’s in the skies around China.

Not so surprising is the fact that 27% of all sharers account for 87% of stories shared. 13 stories a week was the global average for sharing and 26 stories on the receiving end.

Here’s the important part for advertisers. CNN used biometrics and eye-tracking to measure engagement and they found that shared news stories resulted in higher engagement with not only the content but the advertising embedded on the same page. They did this by comparing the results of participants looking at random content. 19% of those surveyed were more likely to recommend a brand that was advertised along with a news story sent to them by a friend. 27% said that they were more likely to find favor with that brand.

This is all well and good but how useful is it really? No matter how much we study it, there is no way to predict what people will share on the internet. One day it’s a serious story about unemployment and then it’s cats wearing tutus dancing on a piano. We’re a fickle lot. And the study talks about the types of stories but what about the types of ads. Does an insurance ad do better than a GAP ad if it’s placed next to a story about a house fire?

The Guardian quoted CNN’s senior vice president of research, Didier Mormesse on this point.

“Though recommended news seems highly unpredictable, we’ve have identified a number of key drivers and key motivations, so we do have some ways of understanding what people share and why they share.”

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Monday, October 4, 2010

Forty Percent of Groupon Merchants Say Never Again

Last month, we reported on a story of a Portland Cafe owner who claims she lost thousands of dollars doing business with popular deal site Groupon. Some people sided with her, others said she mishandled the situation and Groupon said her story wasn’t typical. But is it?

The folks at the Jesse H. Jones Graduate School of Business at Rice University wanted to find out, so they did a small study to see if merchants were generally happy with their Groupon experience. The study, which was reported on by The Wall Street Journal and other sources polled 150 merchants who had placed deals with Groupon.

66% of the respondents said that they did make a profit on the deal but 40% said they wouldn’t do it again. Groupon’s CEO says that number is a tad high. In a recent blog post, CEO Mason said that 97% merchants are interested in being featured again.

Sound like folks are just telling him what he wants to hear or he’s really not in touch with reality, let alone his client base. What the study found was that it was employee satisfaction, not customer satisfaction that shifted the tide from success to “never again.”

Poor tips, too many customers, angry customers (due to lack of product or wait time) are all potential side effects of a Groupon deal. The author of the study, Utpal Dholakia said it was almost a given:

“Because the Groupon customer base is made up of deal-seekers and bargain shoppers, they might not tip as well as an average customer or be willing to purchase beyond the deal.”

This led to the finding that restaurants had the hardest time with Groupon deals, where service business such as spas and salons fared better. The 32% that said they didn’t make a profit from the program reported that customers rarely bought more than the coupon deal and few returned to the business at a later date.

Despite dismal numbers on the merchant end, group deal sites keep popping up and businesses keep making deals. It smacks of a desperate attempt to jump on the trend-wagon and less of a well-thought out marketing move and that is the real crux of the problem.

What do you think of these numbers? Do you think Groupon’s satisfaction and return rate is closer to Mason’s 97% or 60% as the survey says?

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