Thursday, November 22, 2012

Top Twelve Branding Keys For 2012
















The 12th year of the 21st century is close upon us, bringing not just a new slate, but also a sense of significance: the very number 12 commands a lot of attention, in different ways. For product brands it’s a unit of trade – 12 units to a dozen, said to be cheaper than other number sets. Service brands can identify with the 12 labors of Hercules.

For readers there’s Shakespeare’s Twelfth Night, Virgil’s 12 books of the Aeneid, and the Bible’s 12 Apostles. Music? There’s the holiday’s 12 drummers drumming and 12 studio albums released by the Beatles. Once on celluloid, now digitally viewed, there are popular films: 12 Angry Men, Twelve O’clock High, and who can forget The Dirty Dozen. And whether an early or late adopter, there are 12 function keys on a computer and 12 “buttons” on telephonic key pads. Oh, and as everyone knows, there are 12 inches to a foot, 12 ribs to a chest, and 12 months to the year, with 12 associated constellations – those star configurations once thought to be portents of the things to come. But as this is the 21st century, we prefer to rely upon the validated power of predictive loyalty and engagement metrics. Those, incidentally, allow marketers to measure the direction and velocity of consumer values and expectations at least 12 months in advance of the marketplace. So we offer up 12 trends for 2012. Because success comes from acting on a trend when it’s identified – not waiting for market highs and lows. These 12 will have direct consequences to the success, or failure, of next year’s branding, engagement, and marketing efforts.

 1) Value Is the Deal Differentiated and believable brand meaning – emotional, rational, functional, and experiential – becomes a more effective and profitable surrogate for value than low-lower-lowest pricing strategies. But only the consumer gets to say how "valuable" is actually defined. Employ effective systems to listen to them and then figure out ways to tune in the consumer’s frequency.

 2) Social Network Security Friends have an even greater influence on purchase habits than before, but the trust in the community outside the brand space will only be extended to the brand if truly understood and properly incorporated into brand outreach strategies. More connected consumers won’t call, text, or email, but will use social network streams to talk about brands, create personalized content, and increase brand engagement – all necessitating a deeper understanding of what drives a brand’s category and how social network platforms play their part. But watch for more powerful peer-to-peer recommendations coming in the form of subject and feedback blogs – more targeted, more trusted, and more motivating than advertising, promotions, sponsorships, or celebrity endorsements.

 3) Inward Bound Differentiation will increasingly come from a brand’s emotional offerings and finding what will best resonate with consumers. Doing what others do signals commodity, not brand. This is one suit that needs to be custom made. Personal connection and engagement will be more and more critical especially in today’s weakened economy.

 4) Great Expectations Brands aren’t able to keep up with consumer expectations and haven’t for a while now. Every day consumers adopt and devour the latest and greatest, hungering for cutting-edge innovations and enhanced experiences. Accurate measures of real category expectations can provide both ‘roadmaps’ and significant advantages for brands that understand their value.

 5) Now Entering the Statusphere Status remains with us, but the definition continues its shift. The curtain has been pulled back on labels without meaning. Increasingly, meaning is defined far deeper than simple ownership and ubiquitous logos. Producing, selling, and shopping based on environmentally “green” production and design, and fair-trade and socially-conscious consumption is the trend for brands and consumers. To discover their best tactics here, a brand will need to investigate the components of important category drivers. Spot them. Understand them. Leverage them.

 6) Appvertising As a result of growing smartphone/tablet ubiquity, look for more and more apps and their effective use to create an interactive nexus to increase consumer engagement and brand differentiation. It’s not just about games anymore.

 7) Mobilized Money Handheld technology and smarter-and-smarter smartphones will increase opportunity for more mobile monetary transactions. Brands that do not facilitate small screen transactions will find consumers hanging up on them. Watch for increased credit card and promotional outreach, especially if the brand can customize the small screen experience.

 8) Real-Time Branding As brands (like Amazon and Zappos) taught, and consumers learned, fragmented lifestyles and increased expectations could be better serviced by the near-instantaneous availability of products (and their return). Consumers will expect brands to respond with the click of a “Send” key, no matter in which category they compete.

 9) Innovation is Sincerest Flattery Given increased consumer expectations and decreased brand differentiation, brands will need to understand what really drives their category and where to innovate against consumer pain points. Zappos sells shoes – but their brand equity lies primarily in the emotional driver of “service” and how they quickly they process both delivery and returns. Oh, and it’s free--erasing a consumer irritation with innovation in delivery, and likely increasing sales in the process as ordering more, and likely keeping them, became painless.

10) Coolsumption Creative response to consumer expectation will become de rigueur for brand leaders. But the brand party many attended before the economy called in the police has left a beauty hangover that is not going away anytime soon. Sure, Apple sells phones and mp3 players, but they leverage engagement and loyalty, not by delivering “communication” or “entertainment,” but by delivering products that are beautifully, creatively and organically designed. Look for a desire for the coolness of beauty--whether a graceful delivery system or a gorgeous product--to escalate.

11) Simplexity Increased consumer desire for simplicity is a strong trend as complexity pushes on people. Look for smaller, higher-quality products, and ease-of-service delivery methods. This will result in the convergence of complex services and products into simple, expectation-exceeding solutions. But only if brands know where to look in their own categories for the "wow" button to press.

12) You Need to Be Aware That Engagement is Not a Fad Engagement is the way empowered consumers do business today, period. Marketers can and should plan with engagement methods like the right platform, program, message, or experience, but out-dated awareness models will continue to be ineffective and there should be only one objective for these engagement methods: Brand Engagement. Accommodating these trends will require a change in the ways companies measure, manage, and market their brands. And yes. Change is often a scary proposition, but the key is focused changed. And that’s always a lot easier when you have the consumer telling you exactly where to focus. Contributed to BSI by: Robert Passikoff, President, Brand Keys

Tuesday, January 17, 2012

The Brand Payoff




How much is a brand worth?  
That’s the question that firms like Interbrand try to answer, 
by isolating the value of a brand from the sum of its vendor’s 
other assets.  Put it this way: would you rather own all the 
factories, trucks, and offices that belong to Coca-Cola – 
ranked #1 for the 12th consecutive year in Interbrand’s 
annual “Best Global Brands” report; or would you rather 
own the exclusive worldwide right to market a soda under
 the Coke trademark?
Quantifying the net worth of any particular brand 
isn’t easy, as you might imagine.  There are all kinds of 
factors to consider – from brand recognition to
target audience to first-mover advantage.  But
regardless of the factors at play, ultimately the
value of a brand is tied to its capacity to
increase profits for its owner.  In the marketplace,
a strong brand accomplishes this in three ways.
Second, a strong brand boosts margins.
The most robust brands enable their companies
to increase profits by simply increasing prices. 
If customers have a strong preference for
your brand and you decide to raise your prices,
most will stick with you and continue to
 consume a relatively undiminished quantity
 of your product.  When Warren Buffett
and Charlie Munger bought See’s Candies,
they did so knowing that customers had
such a fierce devotion to See’s that
they could move prices up without
driving sales down.  They did, and
it worked.  Since acquiring the famous
candy company, they have raised prices many times,
much faster than the rate at which candy-making
 costs have risen.  They used the strength of
the brand to improve margins and thereby
improve profits.
Third, a strong brand buffets a company from
 external circumstances.  Even at the height
 of the global recession, Appleprofits continued
 to dazzle investors and analysts alike.
(In 2009, one Forbes.com headline read simply,
 “Apple Kills Recession.”)  Consumers have
raced to purchase every new iteration of the
 iPhone, even as the economic downturn
 has squeezed profits for many other
companies, not to mention whole
industries and sectors.  Strong brands
 serve as safeguards against uncertainty
 – perhaps the most resilient kind of asset
 in these volatile times.
A strong brand protects your sales, improves
 your margins, and ensures your resilience.
It’s a valuable asset – and, for some businesses,
their most valuable asset.  That’s why we all
should want to actively build our brands: it’s
where the money is.

Tuesday, November 30, 2010

Agency Killer

Ari Emanuel: Agency Killer Focused on marketers, WME aims to replace shops
Nov 28, 2010 - by Andrew McMains. Ari Emanuel wants your lead agency status. With the launch of Lverage, WME Entertainment’s latest venture into brand marketing, Emanuel, co-CEO of WME, has set his sights on replacing, not supplementing ad agencies, said sources who’ve discussed the venture with him. To that end, he has surrounded himself with partners like former Omnicom Group vice chairman Michael Birkin who knows the ad game and is well connected with marketers.

Birkin is chief strategist for Red Peak Group, a New York-based specialist in brand consulting and experiential marketing that WME acquired for Lverage, said sources. Red Peak’s CEO is Jay Lenstrom, former CEO of Omnicom’s Radiate Group. WME also acquired the Red Interactive Agency in Santa Monica, Calif., and forged ties with Marc Byron, founder of Trivergance Business Resources, a direct marketing firm in Fort Lee, N.J., that remains a separate company.

In conversations with other potential partners, Emanuel has positioned WME as “more connected” than chief rival Creative Artists Agency and its more established marketing arm, which opened in 1998 after CAA shocked the ad industry by (briefly) overtaking McCann Erickson as lead agency on Coca-Cola. CAA Marketing today operates largely as an added resource for marketers who already have lead shops. As one source put it, “It doesn’t feel like CAA is trying to disintermediate advertising agencies. These guys (at WME), really their goal is to get some big accounts and be the AOR.”

The broader ambitions represent a break from WME’s past efforts in this space via Endeavor Marketing and its chief, Mark Dowley. While Dowley this summer helped introduce Emanuel to players in the ad world, he may not play a role in Lverage, said sources. Endeavor Marketing is now part of Lverage. Dowley could not be reached, and Emanuel, through a representative, declined to comment.

The simple reason, of course, why Emanuel’s marketing goals are bigger this time is that his agency is bigger. WME is the product of last year’s merger of the William Morris Agency and Endeavor, the shop Emanuel opened with three colleagues from ICM in 1995. Additionally, WME now has access to fresh capital via a $300 million private equity fund at The Raine Group, in which the agency has a minority stake. The fund will enable WME to make investments that, in turn, could aid efforts to link talent and brand marketers.

Marketers are particularly alluring to WME these days because their dollars represent a potentially sizeable source of revenue for the agency’s clients. As WME co-CEO Patrick Whitesell said of his clients at Google’s Zeitgeist 2010 conference in September, “We know what their value is to consumers. We know what they are to advertisers. So, the next step is for us is, how can they economically benefit from those things that are out there and happening?” At the same conference, Emanuel added: “We’re having more conversations with advertisers every day, whether it be the P&Gs, the GMs of the world. Almost on a daily basis now, you’re having those conversations.”

To move beyond transactional deals with such marketers and build brands long term, however, WME will likely need more strategic and creative firepower, said sources. That may explain why Emanuel approached former JWT North American president Rosemarie Ryan -- a strategic planner by trade -- and ex-JWT chief creative officer Ty Montague before the duo launched Co: in September, according to sources.

“There’s absolutely merit in finding a way to bring that kind of creative pool together with advertisers and marketing companies,” said a source. “What that (also) entails is really understanding brands, how they get built and all of that stuff. I think they see it solely as a creative endeavor and not necessarily a strategic endeavor as well. And I think you have to do both.”

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Monday, November 15, 2010

Facebook Credits starting to make some real money

Benny Evangelista, Chronicle Staff Writer Monday, November 15, 2010

If Facebook were a country, it would be the third largest in the world, so it figures that the social networking giant is trying to develop its own currency - Facebook Credits.

Already, those credits can buy virtual goods from more than 200 applications on the Facebook platform, like special crop seeds or enhanced tractors in the otherwise free-to-play social game FarmVille.

But credits have moved into the physical world as well. Last week, Safeway Stores joined Target, Best Buy and Walmart in selling Facebook Credit gift cards, just in time for them to become a stocking stuffer for the onrushing holiday shopping season.

"We want Facebook Credits to be the virtual currency on Facebook," said product marketing manager Deborah Liu for the Palo Alto firm.

Analysts say Facebook Credits also have the potential to become a universal online currency that crosses both applications and country borders, not to mention a multibillion-dollar revenue source for Facebook, which takes a 30 percent cut of each transaction.

Credits, for example, could be the future currency used by publishers of digital content like news and video, said analyst Atul Bagga of the investment research firm Think Equity LLC.

For now, "Facebook is only taking baby steps," Bagga said. "But you can see that Facebook Credits can go far."

Positioned to win

Indeed, online payment systems are a key component of the main theme for the Web 2.0 Summit that begins today at the Palace Hotel in San Francisco.

The convention will focus on "a battle to gain the upper hand in crucial 'points of control' across the Internet Economy," entrepreneur and tech journalist John Battelle wrote earlier this year in a blog post setting up the theme for this year's conference.

And with more than 500 million active members, Facebook is already positioned to become a winner in that battle.

"As Facebook Credits increases in usage, Facebook will begin to look and feel like its own economy," said Augie Ray, a senior analyst at Forrester Research Inc.

The privately held Facebook isn't disclosing how many of its members now use Facebook Credits, which grew out of a Gift Shop feature that closed Aug. 1.

Earlier this month, Wedbush Securities projected Facebook will generate more than $1 billion in sales from virtual goods this year, and approach $2 billion next year.

Currently, there are more than 200 games and applications from 75 developers that accept Facebook Credits for those virtual goods, including 22 of the 25 most popular social games.

On Nov. 2, Facebook signed a five-year deal with Redwood City video game giant Electronic Arts to use Facebook Credits as its exclusive payment method for its social games, such as Pet Society, Restaurant City and FIFA Superstars.

That followed a similar deal earlier this year with San Francisco's Zynga Game Network Inc., maker of popular social games like FarmVille.

But there are non-game apps, such as Family Tree and Hallmark Social Calendar, that also accept Facebook Credits for virtual gifts such as digital birthday cards. And charitable organizations like Stand Up to Cancer and the anti-malaria Nothing But Nets have accepted Facebook Credits donations.

The payment system could become especially important since Facebook is also pushing its Connect program to directly bridge the social network's members with millions of other websites.

Making it easy

The system works in a way that's similar to real-world transactions such as using a BART transit card.

Facebook members use a regular credit card, PayPal account or mobile phone account to buy a certain value of Facebook Credits, starting with 15 credits for $1.50. Facebook Credits accepts payments using 15 currencies, including dollars, euros and yen.

Like BART cards, which deduct fares based on the distance of travel on the system, a Facebook Credits account is charged for the value of a virtual item that in real currency might cost only a few cents each.

It's the basic concept used by Apple Inc. to sell 99-cent songs on iTunes at a time when downloading songs for free was all the rage, said Alex Rampell, chief executive officer of Trial Pay Inc.

"How did Apple get everybody to pay? They just made it very easy," said Rampell, whose Mountain View company offers an advertising system that entices social game players to try a real product like pizza or cosmetics in exchange for Facebook Credits.

Indeed, Facebook's Liu said the company sees a "sweet spot" for making a frictionless micro-payment system. The company is slowly expanding its list of developers who can "just plug into Facebook Credits" and not have to worry about creating their own payment system, she said.

Social gaming is just the first industry to be affected, "but we think a number of verticals will break through," Liu said.

Potential markets

Airline tickets or other big-ticket purchases may not be practical for Facebook Credits. But news site publishers, for example, could use Facebook Credits to get readers to buy access to an important story or a special video, Bagga said.

"And music is a very social phenomenon," he said. "There are so many industries that can have disruptions due to the social networking phenomenon."

Facebook, however, is based on the proposition that members make the network work by sharing their personal information, so it has also sparked numerous controversies over privacy. Facebook Credits might bring even more scrutiny.

"As Facebook becomes a bigger part of the user's shopping and purchasing activities as well as an even greater part of their communications activities, there's going to be a greater focus on the part of government as to what Facebook is doing," Ray said.
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Wednesday, November 10, 2010

Square Now Processing Millions Of Dollars In Mobile Transactions Every Week

Leena Rao Techcrunch
After ten months of a private pilot limited to only 50,000 users, Square has finally opened its doors to the public. The brainchild of Twitter co-founder Jack Dorsey,Square was unveiled last December as a small credit card reader that could turn any iPhone into a mobile cash register. The startup has since unveiled apps for the iPad, Android and iPhone. And Dorsey brought on PayPal and Slide veteran Keith Rabois as General Manager in August. As Square exits its pilot, the startup is hitting an impressive milestone: Square is now processing millions of dollars in mobile transactions every week.

So where is Square seeing the most traction? Without a doubt, small businesses, independent workers and merchants comprise most of Square’s rapidly growing user base. The technology only requires its tiny credit card scanner that fits into your audio jack and Square’s app. The device and the software are free, but Square takes a small percentage of each transaction (2.75% plus 15 cents for swiped transactions).

While merchants have to qualify for the app, Square’s qualification rules are more relaxed than those of standard credit card processors, There are no initiation fees, monthly minimums, and when merchants apply for a reader, Square doesn’t just focus on a credit check, but also takes into account the influence a company holds on Yelp, Twitter or Facebook.

Rabois tells me that that Square is the “PayPal for the real world.” He also compares Square as the “Apple for financial services,” because it is so easy to use out of the box. Indeed, when I spoke to merchants and Square users, ease of use and simplicity were ubiquitous descriptions of the device.

Nicole Westmoreland, the co-president of the Crocker Highlands Elementary PTA in Oakland, started using Square on an iPhone in mid-September to raise money through sales of swag and tickets for the organization. In a little over a month, the PTA had taken in $4500, and Westmoreland maintains that she would have only been able to raise $1000 without Square. “It was an easy way to force people to pay on the spot,” says Westmoreland.

Another interesting use case involves Dr. John Horning, a practitioner who makes house calls in the Bay Area. Because his work is completely mobile, an easy to use payments system was a must. Because of the nature of his business, payments tend to be large so credit cards are often the go to way for patients to pay. He previously used a wired credit card scanner but found it cumbersome and difficult to use. Square, on the other hand, fits into his medical bag (he uses it with his Android phone), and is an easy system for his staff to learn as well.

And for some entrepreneurs, Square is a way to both bring in revenue and save money. For San Francisco cupcake store Mission Minis, Square was a way of avoiding a costly cash register. Brandon Arnovik said that a point of sale system was the last thing on his mind when launching his bakery; and when he looked at the prices of systems he was overwhelmed. He heard of Square, and actually bought an iPad just so he could use the card scanning system on the device. One advantage he says of using the system, is that it can be used to provide detailed metrics on sales. For example, Arnovik can know how many red velvet cupcakes were sold in a given day.

Rabois says that Square now has well over 50,000 users since opening to the public but the number is impressive considering that most of Square’s growth has been organic and through word of mouth. In fact the company, only hired its first marketing staffer last week.

Of course, things have not been completely rosy for Square and the company has faced the same problems that most early-stage companies encounter in the first year of business. The startup has faced compatibility hiccups and shipments of the actual device were delayed over the summer over credit processing issues. To prevent credit fraud, Square limits transactions numbers, but customers complained that the limits are too low. And VeriFone entered the space with a deal with PayPal.

PayPay is a great product for people who sell things online, but one advantage Square has over a competitor like Verifone, says Rabois, is the magical brand attachment. “If you look at the people who are using Square,” he says, “they are enthusiastic about both the brand and the device.” And he’s not too worried about VeriFone, saying that it’s unclear if VeriFone’s pricing is competitive to Square’s model.

Plus, Square, he says is perfect for face-to-face transactions and has proven to actually help increase sales for small businesses. One his favorite use cases of Square is for a local Granola company called San Franola. The bootstrapped team started using Square to sell at farmers markets and office buildings and saw revenue go up by 20 percent.

But will Square be able to take off if its users are mainly small businesses? Probably. In May, Dorsey told us that of the roughly 30 million US merchants who make less than $100,000 per year, of this group only 6 million are currently processing credit cards. The remainder, or 24 million businesses, are all potential Square customers who are looking for a low-cost and simple way to process credit cards.

However, while Rabois says that while targeting large retailers and merchants isn’t a set strategy, we can probably expect a few larger-scale strategic partnerships the company will form in the future. Zappos is actually using Square in-house for sample sales of extra inventory, from which the proceeds go to charity. And the company used Square to raise money for LiveStrong at a recent golf tournament. Sean Kim, director of business development for Zappos, says that “people continue to be amazed by the convenience of it.” Kim says that without a doubt, the use of Square helped raise more funds for the charity initiatives.

As for the future, Rabois says one of the challenges Square faces is that mobile payments is a rapidly evolving industry. “I don’t think anyone would be able to predict what it looks like in ten years. We have to be really agile, creative and innovative at the same time,” he says.

Square is going to continue to grow in terms of employees, he says; the startup has been averaging three to six hires per month. And when we asked if here any new funding rounds in the future (Square raised $10 million From Khosla Ventures and a number of other prominent angel investors last year), Rabois didn’t really say yes or no. “We are getting an email per day from interesting investors and there are certainly lots of interesting things one could do with more capital.”
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squareup.com

Thursday, October 28, 2010

Google Insider Shares Secrets behind Building a World-Class Brand

Started out in 1996 as a research project by a couple of Stanford PHD students, a search engine has since become a world-wide phenomenon and household name.

By Cecilia Li

Started out in 1996 as a research project by a couple of Stanford PHD students, a search engine has since become a world-wide phenomenon and household name. Google, with only 14 years in existence, is today seen as the world's most powerful brand.

"Many people wonder how Google has been able to achieve the brand awareness that it has. Well, I am going to share a few strategies that Google uses that enables it to become the world- class brand that it has today." said Jim Lecinski, Managing Director of U.S. Sales at Google, among other business professionals, in a recent luncheon.

Jim Lecinski heads the Sales and Marketing division of Google. His responsibilities include leading Google's national advertising business with major world marketers and media agencies. He holds an MBA from the University of Illinois Chicago.

"At Google, we use a two-by-two matrix that helps us devise what to do more and what to minimize in terms of marketing and strategy." Jim Lecinski said.

Lecinski went on to explain that the upper right hand corner of the 2-by-2 matrix, labeled "Good and planned", is where Google focuses on to identify initiatives that fall into this category.

Google's 2 by 2 matrix, from left to right and top to bottom are labeled: Not so good but planned, good and planned, good and unplanned and not good and unplanned.

He gave examples. "Closing down a plant is a planned but not so good experience and therefore it falls in the upper left quadrant. Introducing innovative products that benefit our users falls into the upper right hand." He continued. "The key is to do more of what is considered good and something that is planned."

Lecinski shared a couple of programs that was introduced by Google to further customer loyalty and increase its brand awareness, which fall into the upper right hand quadrant of "Planned and good".

In November 2009, Google introduced the "Free WiFi for the holidays" initiative which allows travelers to gain free internet access with a WiFi-enabled laptop at 47 participating airports in the U.S. during the holiday season. The program launched with great success with both participating airports and individual travelers benefiting. Users were able to connect with their family, friends and colleagues in a carefree way and at zero cost, during the holiday season.

"The benefits are multiple-fold," said Lecinski. "Receiving a gift that provides convenience during the holiday season sends the message that Google is a generous brand that cares about its users having a good time during the holidays."

Another strategy that has continually been used by Google to make its brand highly desirable is exclusivity.

"People want things that they can't have," said Lecinski.

When Google first introduced Gmail, users needed to be sent an invitation in order to join. The notion of needing to be invited generates much buzz and adds glamour and exclusivity to a brand." This tactic was again deployed when recently Google launched Google Voice," said Lecinski.

Having been ranked consecutively as the world's most powerful brand by BrandZ, a well recognized global brand equity database, Google continues to trump such rivals as Microsoft, Coca-Cola and IBM, which have been in existence much longer than the search engine
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Sunday, September 26, 2010

Money Revolution Virtual becomes real

We are witnessing a revolutionary financial trend: Virtual money. "Fake" online currency of gold, points, etc. -- is becoming real. Differences between real and virtual currency are diminishing. Currency "exchanges" have been established. Multiplayer virtual worlds will soon host government-licensed banks.
And the sins of real money, such as bank robberies and currency laundering, are infecting virtual money as well. Government taxing agencies, including the U.S. Internal Revenue Service, are exploring laws for virtual income. At least one government is concerned that virtual money could actually devalue "legitimate" money. I predict we will eventually consider some online currency at least as useful as traditional currency.
In computer games of yore (i.e., the early 1980s), I entered commands on a text-only monochrome monitor to explore the Colossal Cave. Searching for clues, solving puzzles, becoming more powerful, and finding my way out of the Cave were the rewards. But today there's a new way to gain capabilities without using your wits: buying them.
New businesses employ freelance gamers to win weapons, capabilities, etc., which are sold for hard cash to other players to enhance their game characters. Some individual entrepreneursand business owners become wealthy selling virtual products. One of the most famous virtual worlds, Second Life, offers "Linden Dollars," which have an exchange value of about 250 LDs for US$1.00. Although much has been written about Second Life's problems, more than $100 million worth of LDs were transferred last year. A few people have made more than $1 million in real money.
At least as interesting as Linden Dollars is the multiplayer science fiction game Entropia Universe, which has been authorized by the Swedish Financial Supervisory Authority toestablish a bank within the game. Players will be able to deposit checks into interest-bearing accounts for use within the game, receive loans, and pay bills. Sweden will guarantee bank deposits for $60,000 -- just as the U.S. Federal Deposit Insurance Corp. guarantees deposits in the U.S. Currently, 10 PED (Project Entropia Dollars) are worth US$1.00. This game has a history in virtual currency: A few years ago, a Project Entropia player mortgaged his house to pay $100,000 for a virtual asteroid, but says he has made a profit by selling licenses to hunt monsters and mine resources.
All of this raises many questions: What is "legitimate" currency? After all, some real cities areprinting their own money. Would you -- or your children -- trust corrupt bank officials or countries with skyrocketing inflation rates and brutal dictators more than virtual currencies of online, profitable banks with millions of subscribers?
A bank licensed to a virtual world could be as reliable as, or perhaps more reliable than, a "regular" bank. MindArk, which owns Entropia Universe, says player-to-player transactions generated about $420 million in 2008. Perhaps your next mortgage loan will be issued by the Entropia Universe Bank, and I'm only being semi-facetious. Virtual currency is becoming more powerful.
China has been concerned that Tencent, which hosts the largest instant messaging service and Web portal in the country, could actually destabilize the yuan. Tencent offered its own currency, QQ Coins, which could even be purchased at newstands. After a government investigation, Tencent tightened its control of QQ. Billions of yuans-worth of various virtual currencies are traded in China, and the government has begun taxing it.
And the virtual economy is spawning the same ills as the real economy. Criminals are using virtual banks to launder funds, and sometimes they even prefer virtual currency. Virtual banksare being robbed and their currency turned into cashOne woman had sex with a man in exchange for World of Warcraft gold, for which there is an enormous market. Consider today's economy and speculate: Will global financial disasters spawn Snow Crash-like countries governed by a multiplicity of corporations printing "legitimate" currency, while the weak national governments’ money is so hyper-inflated that the standard "small" denomination bill is $1 quadrillion?
Virtual currency might gain more legitimacy than you'd ever imagine.


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Wonk if you love American U.

New York has financiers. Las Vegas has gamblers. And Austin has slackers.
Washington? Washington has wonks.
That's the inspiration behind a new American University effort to distinguish itself among a crowd of local colleges competing for attention by branding the campus as the home of the "American Wonk."
The school has handed out 3,500 free T-shirts imprinted with 18 slogans, including "Legal Wonk" and "Arts Wonk." Ads have begun appearing at Metro stops and in local newspapers. And during alumni weekend in October, there will be a "Wonk of Fame" exhibit.
"We looked at what the word was doing in its current use," said Teresa Flannery, executive director of university communications and marketing, "and we decided this is what we are."
"Branding" has become a popular buzzword in higher education as universities compete to attract top students and faculty members and also maximize revenue from tuition, research and donors.
Instead of selling the stereotypical college experience, with images of students studying under a tree with a laptop, schools try to capture what makes them distinctive.
Universities with dozens of programs and thousands of students often struggle to sum themselves up in just a few sentences or an image. But, as branding and advertising wonks point out, prospective students and their parents have no trouble doing it when commenting in online admissions forums or debating the merits of schools on long college trips.
"Every school in this country already has a brand - whether they like it or not," said Darryl Cilli, the chief creative officer at 160over90, a branding agency that works with clothing retailer American Eagle Outfitters and several colleges, including Michigan State University and Loyola University Maryland. "It has to be honest and genuine. You can never become something you're not."
Teenagers are savvy consumers, and a college education is one of the largest purchases they will ever make, Cilli said, so universities have to sell themselves.
George Washington University decided to capitalize on images of the first president during a 2002 re-branding campaign. Catholic University has found that its name alone is the ultimate brand, but it occasionally freshens up the tag line. The current one was written by a student who won a $1,000 prize for it: "Reason. Faith. Service."
The University of Maryland at College Park, meanwhile, has sought to spread the word about changes happening on campus. In 2003, the university started its "Fear the Turtle" campaign, featuring a roaring terrapin that touts the school's Pulitzer Prize-winning faculty members, steady climb in the rankings and increasingly accomplished freshman classes. The phrase was borrowed from fans of the school's basketball team, so the campaign felt natural to the campus, said Brian Ullmann, the executive director of marketing.
"There's a gap in the perception of the university and the reality of the university," he said. "The branding campaigns are important because they help people understand the change."
Yet some campaigns can backfire. Drake University in Des Moines unveiled an admissions campaign this semester around the idea of the "Drake Advantage." For an illustration, Drake used a giant blue D+ on its Web site. The school has since modified the image so it looks less like a near-failing grade.
The $675,000 branding effort at American began two years ago, when the university hired a marketing strategy firm to survey students, parents, faculty and alumni about their perceptions of the university.
"Students tell someone they are going to American University or they are applying to American University . . . and a lot of the time, people say, 'Where?' " Flannery said.
That initial round of research identified three potential messages: active citizenship, learning from leaders and Washington as a powerful lab for learning.
Campus staffers then had to come up with a way to creatively convey those messages. At one meeting, they discussed a cartoon that Nate Beeler, a 2002 graduate and now a Washington Examiner cartoonist, drew for the cover of the alumni magazine. It shows a row of guys in suits sitting on a D.C. telephone wire like pigeons and saying, "Wonk! Wonk! Wonk!"
"It was 'Oh!' and then 'Noooo.' But 24 hours later, we were all still talking about it," Flannery said.
The choice has sparked as much consternation as enthusiasm among American's 12,000 students, not all of whom aspire to a lifetime of wonkery. Many have questioned it - and a few have openly mocked it - in Facebook updates, tweets and the comments section of the campus newspaper.
"I don't have any positive associations with this word," said Erin Lockwood, a senior majoring in international studies and economics. "It's a silly word. It doesn't have any intellectual gravitas."
But university leaders are confident that "wonk" - which they define as "an intellectually curious person" or "a knowledgeable Washington insider" - captures something essential about American. The whiff of nerdiness perceived by some students and alumni, officials said, was less important than the word's distinctiveness.
Josh Kaplan, a "green wonk" and senior environmental studies major, said: "Initially, I thought it was a little strange. But that's kind of what I like about it now. . . . It's pretty uniquely a Washington word."

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Face Book Credits


Facebook has been working to significantly monetize itself. On the one hand, they are already on their way to becoming a force to be reckoned with when it comes to online advertising, but Facebook isn’t content to follow the same path to profit as Google: they are now rolling out a virtual currency which they hope will eventually turn into a multi-billion dollar business.
Facebook has been testing its currency, called Credits, for more than a year, but Farmville andMafia Wars creators Zynga have just given Credits a major new push: they have made Credits the exclusive payment method for most of their games.
This isn’t a small deal. Thanks to the deal with Zynga, which will push Credits into the mainstream of Facebook social interactions, analysts expect Credits to be almost a billion dollar industry in and of itself by the end of the year. Target stores now sell Credits gift cards.
And it won’t end there. Eventually, the goal for Credits seems to be to expand it past the virtual goods market and beyond Facebook to encompass other forms of online transactions throughFacebook Connect… a move that could see Facebook competing with the likes of AmazoneBay,Google and PayPal.
Watch out. In a couple of years, you might find yourself being paid through Facebook.

How businesses benefit when customers commit to brand loyalty

Brand loyalty, an odd and often unfamiliar term for many businesses, stretches your business well beyond the basic limits and reaches your market and community in ways you never imagines; the following are benefits when customers commit to brand loyalty.
* Increase the life-time value of customers *
Return on investment is often a term thrown by many marketers but what does it really mean, especially in the long-run? The ROI of a brand loyal customer is hard to gauge because the longer a customer holds onto your brand - the higher their value and investment.
A brand loyal customer that stays with your business for many years will be the ones that not only improve your bottom-line but cover the initial customer acquisition cost. The cost of obtaining a customer can be very expensive depending on the market; those customers that stay loyal to your brand pay for themselves after each additional sale - if this goes on for years, you'll operate a very successful business.
* Brand loyal customers become buzz agents *
Those customers that feel passion behind your brand are the same ones that will promote it every day and defend it to the bone. A common example of customers becoming buzz agents can be seen with Apple. Apple fanatics will go to great lengths to stay on top of current business events, tell everyone they can find and will quickly defend the brand when others attack it.
If you can create the same community with your business, you'll create a marketing message out of those that follow you. Of course when your customers become buzz agents they do completely trust you so do everything you can to keep that bond alive.
* Increase your overall sales per customer *
A customer who dedicates their business to yours is more likely to invest more money. Likewise, brand loyal customers will be the first ones to tell friends and family about their experiences which, when they join the sales funnel, are more likely to buy more frequently than those that jump on board at random.
Your most dear customers are the ones that will propel your business to new levels as your base continues to grow and allows you to expand into areas you never thought possible.
* Discover powerful market research *
Finally, businesses benefit greatly from customers that are brand loyal within their market research. Asking your customers what products and services they want may seem like a no-brainer but the ones that know best are those that are hardcore for standing behind you.
It's your duty, as a business, to never alienate your existing customer base - these are the ones that built you, these are the ones that will continue to support you as you grow. Your market research will be jam-packed with valuable information as long as you take the time to ask.