When Marketing Hooks Up With BizDev

Businesses are trying to figure out how to make money online every which way they can. That means product development, business development, and marketing executives must work together, identifying projects for funding, hammering out success metrics, and eking out resources (internal staff or external partners) to act on action plans.

Some companies are taking a long view, investing in projects today in hopes that they’ll pay off when the economy turns around tomorrow.

During an Internet Strategy Forum networking event in New York City last week, executives representing brands spelled out opportunities, risks, and some surprises they’ve encountered while building out their digital businesses. In some instances, it sounded as if the job of marketing executive has morphed into business development — and vice versa.

NBC Universal: Always Learning

Sometimes revenue can come from unexpected places. Consider NBC Learn, an online educational initiative launched three years ago, that’s designed to tap the multibillion-dollar educational marketplace. It builds on NBC News’ nearly 80 years of video archives.

NBC Learn has two components: iCue, designed as an online community that incorporates games, online discussions, and video resources; and NBC News Archives on Demand, a collection of archived video, text, and radio clips organized for classroom instruction that incorporates the HotChalk learning management software system. The on-demand archive service is sold as a subscription at $2,000 per school building.

Then came the quidget. Late last year, NBC developed video-quiz widgets, “What’s Your iCue?,” that launched on Facebook. The media company teamed up with appssavvy, which secured advertising sponsorships from Lexus and the University of Phoenix.

These so-called quidgets brought in more than $500,000 in gross revenue from sponsorships since November, according to Michael Levin, director of product development at NBC. At the forum, he said the widget sponsorship brought in more revenue than the online subscription did last year.

“The quidget, which originally started as a promotional vehicle for Facebook, has turned into a product of its own…and completely unintentional,” Levin wrote in a follow-up e-mail to me. “We’ve had terrific success with them in terms of promoting the NBC Learn brand and as interactive elements for other NBC digital brands. They add stickiness, video content, and a fun and contextual game element to any page.” NBC-branded video-quiz widgets include the U.S. Open Quiz and Access Hollywood Quiz.

EMusic: The Song Doesn’t Remain the Same

Not all initiatives have a direct ROI (define). Take eMusic’s message board.

“If you took it away, what would happen to revenue? It’s would be hard to [come up with a financial] model,” said Kip Morgan, CMO for the online music service. “Anecdotally, we have absolutely seen that a favorable message board thread can lead to increased sales. But we have never measured the impact,” he wrote in a follow-up e-mail.

In addition to its message board, its staff blog, 17 dots, is an online water cooler where editors and subscribers swap notes about new offerings and trade entertaining tumblrs about Stevie Nicks and other artists. More striking is that the blog was a lightning rod for two major business changes: eMusic, beloved for its indie music labels, is adding titles from Sony’s catalog and it’s increasing its monthly subscription fee. It said the price change was made to increase payments to all of its label partners.

CEO Danny Stein discussed the changes in a May 31 post, “More of the Good Stuff,” followed a day later by eMusic Editor in Chief Yancy Strickler’s post, “How We Approach Sony.”

More than 1,600 people commented on Stein’s post, while another 200 people commented on Strickler’s note. Most protested the changes. “Ouch. This is like my favorite motorcycle dealer deciding to add tractors to its product line and then raising prices to pay for new inventory that’s of no interest to me,” wrote Miles. Still, some sympathized with eMusic.

The eMusic team also turned to Twitter to reach out to customers. “We monitored the #emusicfail tag and tracked the authority of those tweeting. We responded selectively to users posting comments, depending on the substance of their tweet,” Morgan said in his e-mail to me.

In an interview with “Billboard” magazine, Stein said a big selling point for Sony was the way that eMusic interacts with its customers. What’s more, he expects the Sony catalog will draw new customers. “Because we operate as a revenue share, labels might see more money. A rising tide lifts all boats,” he said.

Customer engagement cuts two ways. Did eMusic get more than it bargained for?

Hearst Mags: Courting New Bedfellows

Even with racy features like “30 Things to Do with a Naked Guy” on Cosmopolitan.com or well-researched features like “10 Lessons Learned From Past Rail Accidents,” Hearst Magazines — like most other publishers — can’t afford to stand still.

Unofficially adopting the mantra that “hope is not a strategy,” Hearst is looking for new business opportunities and, in some cases, partners to help it make them happen. In doing so, it’s striving for agility.

“We’re looking at projects that take 30 days or less…the days of nine-month projects are gone for us,” Chris Johnson, VP of content and biz development, Hearst Magazines Digital Media, told attendees at the Internet Strategy Forum panel. Still, there’s a silver lining. “It means we can do a lot more, a lot faster, fix it if it’s failing,” he said.

When Cosmpolitan.com relaunched two weeks ago, Hearst was among the first publishers to run super-sized ad units, including one known as a pushdown because when the expandable ad is open, it pushes editorial content lower down on the page. A spokesman said it’s too early to share results, but several other campaigns are in the works that use the ad unit.

Another woman’s mag at Hearst, “Marie Claire,” is preparing to launch the Fragrance Finder in July. “It’s our first effort to crack into the high-end luxury experience,” Johnson said. Additional details, including advertisers, were not available.

Last year, Hearst teamed up with MSN to launch delish.com, a site that features recipes, chef profiles, kitchen gadget reviews, and other food-related information. The site is owned, built, and edited by Hearst; MSN sells ads and distributes the site’s content on its network.

“It’s a totally different brand,” Johnson said, describing delish.com. “We repackaged [content] in a new way.” The result? The site paid for itself within eight months after launch, and it’s now among the top food sites.

In another example of its flexibility, Hearst was about to scrap online initiative “Ultimate Prom” because it couldn’t come up with $30,000 for the limo, hair stylists, and other costs to throw a prom concert with Universal Motown Records for a New York City high school class. Hancock Fabrics, a specialty retailer, came forward as a sponsor, advancing the idea of promoting a make-your-own prom dress competition that was captured in an eight-series Webisode on YouTube and Hearst’s online teen sites. “We were able to revive a program we had shelved because a nontraditional sponsor came [forward],” Johnson said.

Lesson learned? “We have to think differently about who is going to market their products on our site,” Johnson said.

Disclosure: The author’s husband works for a Hearst newspaper.

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