Brazil Wave Festival

Our final day was the Wave Festival. Brazil’s national advertising festival on creativity.  Fernando of The Group Comunicacão Ltda, arranged for me to speak on the first day.  The subject (of some controversy at this conference) was how we leverage creativity and technology to fuel growth for clients.  Many creatives see technology as the enemy and have experienced marketers replacing technology for great ideas. But we posited that development and digital design was in fact a creative pursuit. The growth of social media and now mobile is the greatest thing to happen to advertising.  This digital interview outlines our position. Web Interview.

The festival was a great foundation for launching some talk about how there is a need for a social media agency like ours in Brazil. M&M magazine, “Brazil’s Ad Age” did a great full page article on us preceding the conference.

Rio was wonderful.  Just before catching my plane home I had the chance to bike around the city passing the beaches, lagoons and wonderful neighborhoods.  Everyone was exceptionally friendly.

All boded well for Engauge joining hands with the The Group Comunicacão Ltda and seeing what we can do about building a partnership there.  The country is alive with creativity and interest in social media.  The consumers are some of the most active in emerging media in the world.  And the clients  were inquisitive, creative and ambitious wanting to build there business in many creative ways.

I can’t wait to come back.  Because there is a wave in Brazil.  Indeed a tsunami of creativity.  And it will make it’s presence known through out the world.

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Brazil Day 2/3

Sorry for the delay on posts. Travel has been an impediment.

Day two in Brazil we spent the weekend in the Brazil country side, enjoying the coming autumn weather and a little golf. Saturday night, the Guntovitch’s took me to a friend’s 25th anniversary party for one of Brazil’s leading families, who owned most of the land surrounding the golf resort. When we return to Sao Paulo, I learned that Sunday was Pizza night. Everyone has Pizza in Sao Paolo. So at 10 PM (an early Brazil dinner) Fernando and I went out to the nearest Pizza restaurant. Now I love my home town Donatos Pizza and pictured the same that night. But this was a large fine restaurant, filled with families dressed well for the evening ordering gourmet items like “Carpaccio Pizza “or “Shitake Pizza”. It was like a celebration of Pizza any Italian would enjoy.

Monday we were back for business. Our first meeting was with young innovators at the agency as we began to map out the plans and philosophies of a new digital agency. We considered it a strength that both Engauge with its leadership in social and mobile marketing, working with The Group Communicao, an expert in events and promotions, can build an enterprise that will focus on driving growth for clients. And the whole group made me aware of some of the big success stories in Brazil for Viral video. Numbers unheard of elsewhere like the Itau Bank video with 24 million views, Nissan with 17 million. Brazil will indeed be a wonderful place for growth in this industry.

That afternoon we visited The Group client Santander Bank. Santander is Brazil and Spain’s largest bank……among the world’s to 10 banks. The entire marketing leadership (25 people) came to the meeting for our presentation on how to leverage creativity and technology. And the ensuing discussion was dynamic with particular interest in how banks can be effective in customer service with social media when one must be so careful with every word in financial services.

The team was as engaging, inquisitive and smart strategically as any leading bank in the world. And they were ready to take on the challenges of growing their bank through social and mobile. If Santander Bank is indicative of the client community here in Brazil then we expect great things in our endeavors here in Brazil.

As evening came, I enjoyed another wonderful dinner in the home of Fernando and Fabiana, watching the sunset from their apartment, and dining on the best Beef Stroganoff I ever had. A good day……….a foundation for the future.

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Brazil- Day One

We were sitting in a massive restaurant with a huge tree in the middle with branches reaching through the roof of the tent like structure that constituted the “building.” This is Sao Paulo of temperate climate so you can have a restaurant that was somewhat inside/ somewhat out. The tree was a Fig giving the restaurant the name Figueira Rubaiyat .

I had arrived that morning on the red eye, fairly tired but enjoying the conversation with my host and good friend Fernando Guntovitch, CEO of the successful events and promotions agency The Group Comunicacão , his wife Fabiana and their cousins Paul and Marcia Krieger. I have come to Sao Paulo, hoping to build a partnership with Fernando’s agency, creating a new digital agency , serving this fast growing economy.

The buffet consisted of every conceivable meat and fish dish, with the best rice I have ever tasted. The Kriegers talked of their adult children, one in New York and one in San Francisco. Both sounded like great young adults, creative and hard working. Paul is a marketing executive with a large spirits company in Brazil and knew the industry well. But it became apparent hat his son was now a famous marketer himself. Yes, the Krieger’s son is Michael, the co founder of Instagram, recently made famous by their agreement to sell to Facebook for $1 Billion in cash and stock. Paul mused how only recently he was concerned his son had left a secure job in graphics for a start up without assured income. And as the Guntevich’s and Kriegers spend the winter holidays together they all commented how Mike was not sure of the monetization of the product only last Christmas.

This is now the stuff of social marketing legend. Instagram reached 30 million users in only a year and is growing exponentially. Evidently, on his most recent visit, Mike was surprised to see he had become somewhat of a Brazil Mark Zuckerberg gracing the covers of many magazines. We laughed about some of the “new friends” they have heard from declaring how “we always felt so close to you. “ now that their progeny is famous.

What a perfect way to start my visit here. I had come to Brazil to bring some of our ideas for a digital agency from the States. But it was Brazil’s son Michael that is teaching the world.

Born from an engaging, confident and very enjoyable family…. sitting together under a fig tree hosting this grateful guest from the States. It looks to be a great trip.

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Groupon Valuation Needs Correction

It’s not that Groupon is a bad company. I think it is a great concept, great innovation and a great company. It’s just has the wrong valuation. As I wrote, last year Groupon is being valued with the wrong metrics . Now the Wall Street Journal writes that missteps are pushing the value of the company down .

There have not been real missteps. The subscription list is growing. Their data business is robust. The original valuation is just still too high. Even at just under $10 billion the valuation is one of the highest value marketing and media companies in the world. That just does not make sense. This valuation will not be sustained. And my fear is when the Groupon valuation is corrected the pundits will assume digital relationship marketing and promotion will be a weak sector. Nothing can be further from the truth. Marketing is a blue chip industry, with more corporate leadership looking for ways to improve top line.
Groupon is worth $3-5 Billion based a $20 per customer relationship metric. And the sooner it corrects itself, the better for the future of the company and the market.

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This Bird Intends to Fly

I first heard of Twitter from Fred Wilson at Union Square Ventures. I was golfing with him at his club in Westchester, invited by Razor and Tie’s Craig Balsam, a mutual friend. Fred had just met the founders of Twitter a few days earlier and described the then unheard of concept to me. My brilliant reply “Fred, that is the stupidest idea I’ve ever heard.” The rest of the story is venture history. Fred led his firm to a stake in the start-up with exponential returns. I’m still an ad guy from Ohio.

So, when I was fortunate enough to visit with the Twitter leadership along with 70 worldwide CEOs from YPO companies at the “Business is Social” conference in the Bay area,  I listened a lot more carefully than I did to Fred that day. Once a fool, twice an imbecile.

And, I was surprised with what I heard. You see until last week I still believed that Twitter did not know how to monetize. But Twitter COO Adam Bain and his team spelled out their plans for being the most influential social marketing platform in the world.  And the best for brand marketers to leverage.  They started by sharing the promoted Tweet, a concept introduced 6 months ago by Twitter and growing in popularitiy.  But what impressed me the most was Twitters intentions on how  to charge advertisers.  Basically, they are deploying  a bidding process on a per follower basis.  In this manner, if a marketer  can calculate the metrics for conversion from follower to customer,then they can be very effective in calculating profitable bids for followers.

The power of this medium is further enhanced by how easy it is to use on mobile hardware.  Twitter usage on the IPhone 4 is considerably easier than any Facebook mobile APP.  The ease of use in mobile with a performance based advertising model means that marketers will find Twitter to be very effective.   And the unobtrusive manner the promoted Tweet is presented will not offend users.

All in all, I intend to recommend Twitter to many clients and portfolio companies in my investments.  And I see Twitter leadership more open to try new ideas for monetization.

I may have missed Twitter as an investment. But I have no intention of missing thier flight into a marketing powerhouse.   They will not be coming in for a landing any time soon.

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Is Your Attention Worth $3?

Last March I wrote about how consumers can pick the ads they want to view online: Pick an Ad…Any Ad.  Now some enterprising companies are offering the capability to advertise on ATMs. In this article, Time magazine asks, “Would You Watch an Ad to Avoid an ATM fee?

Who doesn’t hate paying $3 to get their own money?   ATMs get such bad press for the fees they charge, so the companies who came up with this are spot on. The real draw? They’ll pick up any ATM fee if you watch an ad. More and more consumers are willing to have ads surrounding their  emails or instant messaging  in order to get the service free. Although some others find the practice creepy,  many accept it as the way to not pay for a valuable service.

I met with the CEO of a new company in Finland,  Jongla,  who is raising a second round of capital.  They provide the ability to send loads of data and instant messaging free as long as you accept the advertising.  Their first launch country is Australia. (I don’t know the strategy behind an Australian launch.)

QQ is looking at a similar model in China.

So blue, brown, green….your eyes are valuable in today’s marketing.  Nothing wrong with someone picking up the tab on the annoying ATM fees.

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Waiting for Ruslan

Last week I was fortunate enough to be at our Engague Digital Innovation Group (DIG) Day.  DIG Day is an all day event at our Atlanta office in which we invite some of the nation’s leading marketers to have a workshop with the nation’s leaders in social and digital marketing. 

Our own Nicola Smith, who leads innovation at Engauge, started the day commenting on how storytelling is the most compelling way to communicate. Nicola was followed by two smart guys from both television and film who shared some discussion about the power of content and stories. 

But then Jim Umberger  stood up for his presentation. Now it just so happens that Jim leads loyalty marketing for Walgreen. And if you have been following the news on the use of technology in retail, you know that Walgreen is a pioneer in the innovative redemption and POS systems  that drive rewards, discounts and loyalty for their customers.  So Jim could have talked about all the amazing things his company is doing and we would have been satisfied.

But, Jim took Nicola’s premise about storytelling to heart.  And he did something amazing. He……um…..well…..he told a story.  The most important story of his life.

And we were riveted. 

 Jim Umberger’s children are adopted.  And four years ago, Jim adopted a 3-year-old boy named Ruslan from Kyrgyzstan near Russia.  But there is only one complication………Ruslan does not live with them yet.  Ruslan is still in Kyrgyzstan. 

Jim explains that due to massive political and bureaucratic changes in Kyrgyzstan, Ruslan along with many other children have not completed their “already approved” placement in their new home.  

As a result, Ruslan is still in an orphanage.   And Jim knows that due to inactivity and lack of attention, a child can lose one month of development for every three months in an institution like Ruslan’s orphanage.

So why was this relevant to DIG Day?  Because Jim detailed how he has kept in touch with Ruslan with technology like Skype, when intermediaries visit the child.

And he has created a blog linking 65 other couples who are waiting for their children from Kyrgyzstan who are also stuck in the system. 

And as the blog linked this community together they began to have a voice with our state department to advocate for these children.   And then many of them traveled to Kyanstan together putting pressure on the government.  

Even as there was massive political upheaval in Kyrgyzstan, the Umbergers and the 65 kept the pressure on through their blog and other digital communications.
So much so that recently, the new President of Kyrgyzstan commented on her Facebook page, acknowledging the 65 and stating that she will work to resolve the issue. A President of State with many problems commenting on Facebook to a group of American parents?  What a tiny, tiny planet we live on.

Smaller because of this interconnected social network that gives power to a few voices in North America to move a government on the other side of the world.

Tiny enough so a couple in Chicago can hold on to their link to their adopted child on the other side of the planet.

This February Jim and his wife will travel to Kyrgyzstan with the blessing of the government to hopefully reunite with Ruslan and bring him home.  If it works out they will fly home to their new life together.  But that flight was fueled by the socialization of our planet.  Socialization driven by innovative technology that just continues to make us a tiny, tiny planet.  Thanks for the story, Jim.

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The Conference I Missed

Due to my trip to China and other conflicts I couldn’t be at ad:tech NY this year. A shame since our new board member Sarah Fay is so involved in the creation of this great event.

Any focus on the intersection of technogy and creativity is critical for our industry. Fortunately, our own Ross Capers produced a great report on the conference on the Engauge blog, and it’s spot on.

Give it a look and keep innovating to grow in this ever competitive world.

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Our Historic Moment in Hong Kong

“It is like an artificial intelligence.” That is how Lau Seng Yee, the President of online media at Tencent described the vibrancy and interrelationship of social media. Tencent is the parent company of QQ, the instant messaging service of China with 300 million members. “Imagine,” he continued, “there is a major event. . .like a tsunami. The first person who sees it uses Twitter or Weibo and informs another. Instantly, the word spreads. People react. Inform others. Millions. Hundreds of Millions. Billions. Moving. . .reacting. Communicating. Fear is spread in an instant. Defenses are raised. Loved ones protected. Then, perhaps relief, when the threat passes or grief when the worst occurs.”

This is how the eastern region of our global brain is talking about social media. I am at the Asia Pacific Conference of Worldwide Partners in Hong Kong. And, I am here to finish the details with WE Marketing to build China’s leading social media agency WE Engauge. Although the deal will not be completed with all the various international legal machinations, until the end of the year, Campaign Magazine has reported on the prospect as “Breaking News.”

And why not. This is a confirmation of China’s astounding exponential growth in social communication. A transformation in a country ambivalent about citizen lead dialogue is among the most active users of micro blogging in the world. Weibo, the micro blogging platform boasts over 300 million members. They barely existed two years ago. Our partners in China, Viveca Chan and Hugo Chan (no relation) predicted this growth, putting our fledgling new company in the position of prophet.

As for Tencent. They report 25 billion messages a day. A day!!!!! Our own Hugo Chan explains his theory on why China has embraced this movement with such vigor.
“For 30 years China has had the one child policy to control population growth. Yet, the culture in China is to have a support system from a large network of aunts, uncles and cousins. Now there are no uncles and aunts. So we reach out on QQ and Weibo.”

Signing in Hong Kong

As I embark on the long flight home, I think about this fascinating week. Just hours ago Viveca and I signed our letter of intent with the first step to creating WE Engauge. I’ve signed hundreds of documents like this in my career. Yet this time, people from the office came by to watch us sign and take pictures. “A historic moment,” said Helen Lo, WE’s head of planning. And I felt she was right. This moment in China. This moment at Engauge and WE. This moment in the collective human brain whose nerve endings are interconnected through human behavior driven by Facebook, Twitter, Weibo and QQ.

We are blessed to join together with WE to harness this energy for the growth of our clients and people.

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