There's Nothing Like Cool OOH Spectaculars

The Martin Lindstrom report on Ad Age highlights some interesting OOH treatments in Istanbul, Turkey. Unilever is constructing full size castles on top of construction sites, while a local insurance agency is placing fake burglars on balconies.

Here's the link to the short video.

Bad Move, BK

With the success of, "The King" and the square pants video, I'm sure Burger King didn't need to put out this faux pas...but they did. To advertise its new whopper, the "Texican," Burger King made an interesting commercial featuring a cowboy and a little person luchador, or wrestler popular in Mexico. The major problem is that the little luchador has a cape with the mexican flag, and a Mexican official saw this as a violation to their strict laws banning the use of the flag in certain contexts and additionally saw this as a potential misrepresentation of the image of Mexico.

The BK guys should have seen this coming.
Here's the AdAge article

Pricing Strategies Utilized by Overstock.com

Overstock.com is a fascinating option for pricing strategy analysis because it represents all that e-commerce has to offer: competitive pricing to the hilt and an auction model. It is all about slashing prices on the traditional exchange portion of the site, while at the same time invoking an eBay model for cars, homes and other items on the other. As I mentioned before, the site can be a bit overwhelming, but the one takeaway, at least on the traditional commerce section of the site, is that this place is all about low pricing. The prices, marked in red, seem to be the one constant in the jumbled site, that is organized to an extent but pretty much is just controlled chaos. Tons of products appear on the screen and it is easy as a consumer to get lost - but the red text seems to snap the user back to reality, reminding him/her that this site will save them money.

The Internet has created a new kind of buyer, one that is price sensitive and empowered, which basically equates to a business and marketing nightmare. With a mere click, the prospective buyer has access to items priced on multiple, sometimes countless sites. Shopping around has never been easier.

With the ease of the pure play model, costs are being driven down by such phenomena as self-service ordering, JIT inventory, automated online customer service and less printing costs or basically less of any cost generally associated with a brick and mortar business. Overall, it is relatively cheap to set up shop online, which means that setup fees and exorbitant operational costs no longer have to be translated to the consumer. It's just the cost of what little infrastructure exists that gets tacked on to prices.

Pricing Strategy Identification

Fixed Pricing Strategy

The traditional product exchange section of Overstock.com uses the fixed pricing strategy because it is a typical exchange. Overstock purchases wholesale items and sells them online for dirt cheap. Therefore, the specific strategy is markup pricing, which is simply the cost of buying the product from the producer plus the amount added in for profit and expenses. They do offer, however, sales or discounts on a limited time only basis at fairly regular intervals. Normally, something somewhere on the site is on sale; sometimes it is a specific product, while other times it is a whole product category. Overstock's goal appears to be the price leader - they have an "Online Best Price Match" button next to purchases that challenges the buyer, who may have purchased the item already or not, to compare the price to other sites. If there indeed is a cheaper price offered at another outlet, then Overstock will match that price for the buyer. If the person has already purchased the item then they can absorb the savings in the form of a credit to their account.

Specific Prices

Within the products that follow the typical online wholesaler/retailer model on Overstock, pricing varies greatly from product to product. They don't sell something specific, because they are continually getting leftovers from many different places. This makes pricing difficult and more changeable. A London Fog trench coat, for example, is going for $74.99 at this moment. Next to that price is a heading that says, "Today's Price," insinuating that the prices change daily, although that has not been my experience with the site. Ultimately, there must be a set percentage of profit that Overstock wants to glean from each purchase, and therefore sets the price to achieve those. It always shows the percentage off from the retail price and calculates your savings. That percentage of savings can be anything from 7% to 56% and beyond.

Dynamic Pricing Strategy

The auction side of Overstock.com can be identified as utilizing a dynamic pricing strategy, which is the strategy of offering different prices to individual customers. Within dynamic pricing, Overstock.com more specifically typifies the negotiated strategy. This strategy sets price based on back and forth negotiation between buyer and seller, much like an eBay model. This speaks to the empowerment that now defines the shopper and the shopping experience. What is interesting about this model, while it seems so new and exciting, is that it has been a manner of doing business for centuries. Bartering and haggling have always been a part of market exchanges, but now it exists on the Internet. Additionally, customer reviews bring a great deal of value to this process because it brings credibility to the site and the seller.

Specific Prices

Just the nature of a dynamic pricing strategy makes pinning down exact prices a bit difficult. They use the "reserve" method, much like eBay, where a seller sets a secret minimum bid he/she is willing to accept. From there, the pricing is up to whatever the buyer wants to pay - it just all depends on the perceived value of the product in the eyes of the buyer. The seller gives the buyer an idea of how much something is worth by suggesting a starting price, but from there it is up in the air to be interpreted as it will be. There is a section that is "$1 No Reserve" where people can basically get rid of their junk. There is a shipping fee, usually about $5 give or take, but otherwise the bidding starts at $1.

Effectiveness of Pricing Strategies

These pricing strategies seem to be extremely viable because they reach distinctly different targets. There are the people that want to make a straight purchase of cheap merchandise, and then there are the people who find great bargains through the auction route. Of course there are people who like both, but either way, overstock is covering all the bases by targeting consumers and their buying styles.

According to the Business and Company Resource Center, Overstock.com is reporting $834.40 million in revenue, which is not bad for a site that got started in 1999 and has steadily competed with other operations out there. Amazon.com, offering a similar wholesale model but not with the “lowest of low” prices like Overstock reports revenues of $19,166 million. This is a huge difference, but it relates to its purpose. Amazon has anything you want at reasonable prices. Overstock has all the leftover “finds” of normally expensive retail items available at up to half the cost.

When it comes to the auction portion, they aren't eBay by any means, a heavy hitter with $8,541 million in annual revenue. But that's not to say Overstock was trying to be eBay. The primary model of Overstock is the simple wholesale merchandise exchange, while the auctions appear to be an experiment. Luckily for Overstock, it appears that their experiment is really catching on with a culture that is used to Internet shopping and well versed in negotiating prices in the online space.

The success of a pricing strategy is often rooted in pricing goals. Overstock is undoubtedly market-oriented due to its fierce pricing competition and guarantee to match or beat any price online. With the number of sites out there that claim to sell discounted wholesale items, Overstock has made a name for themselves that allows them to own wholesale online shopping. Wholesale translates to an image of the lowest of low prices; therefore, if Overstock is associated with the lowest of prices, then they are well on their way to meeting their goal.

Just for fun - here is the most random clip from a commercial for Overstock.com's Valentine's Day contest that never was aired. I'm speechless.

The FTC to monitor blog and social networking comments?

The FTC is looking at cases that might lead to legislation punishing untruthful statements by companies in the social networking domain of the internet. Consumers would be protected from false product testimonies on Twitter and the likes.

Read the article

How can Overstock.com measure performance?

Overstock.com is a very interesting site. I have heard about it before, but never really spent time on it and certainly never purchased anything from it. I went on it recently and it has EVERYTHING. You can buy furniture, shoes, bedding, rugs, sports equipment, and the list goes on. Even more impressive, you can sell your car or even your house through the site.

It is half shopping model, half auction model. It’s pretty wild.

Looking through the site, I came to the conclusion that this pure play business is following the brokerage model. It is basically a site that manages auctions and allows for people to sell their items. All the leftovers or “overstock” from manufacturers are bought up and sold on this site, providing reasonably priced items to people who like to buy online. Exchange seems to be the key in this model, with the site picking up a degree of profits from the sales.

Overstock’s latest TV campaign is a little strange, featuring a husband and wife country duo who came to fame on the CMT competition, “Can You Duet.” Something about it the spot appears familiar, but I can’t quite put my finger on it.

Maybe it is a bit Mastercard-esque?

There are plenty of performance metrics that Overstock might use to evaluate their success. The two major breakdowns of these metrics are web analytics and user-engagement metrics.

Web analytics study the user behavior on the web-pages, so to determine the actions of the user on the site, they can measure: site traffic, pages most frequently viewed, clicking patterns of users as they navigate through the site, how long they stay on one page, and whether the time spent on the page ends in a purchase.

Overstock looks like a site that I could spend hours on, easily. I’m sure that how consumers navigate through the site really tells a great deal about what product categories are more successful or what users like. Cookies, server logs and page tags work together to not only track but adapt to the patterns of consumers. Overstock can also measure how successful its special promotions are based on whether consumers click through or purchase.

Another set of metrics comes from the social or user engagement metrics. Overstock, considering its social element and do-it-yourself model, probably finds these engagement metrics helpful because they can measure the participation rather than the views. Users can rate products and give reviews on the site. In the auction portion, sellers and buyers are evaluated too. The more people are writing reviews, the more time they are spending on the site. How much a person engages is a good indicator of brand loyalty and future continued use. Engagement metrics also measure downloads and how often a site is bookmarked.

A metric tool that has come to be widely accepted as an effective method to measure online success is the balanced score card. Overstock could use this as well to evaluate their overall success.

The four components of the scoring are: customer perspective, internal perspective, learning growth perspective and financial perspective.

When Overstock considers any customer service awards, the number of complaints, or the number of abandoned shopping carts, for example, that is looking at the customer perspective.

How fast the company returns emails, the supply chain updates and evaluating the more basic functions of the business deals with internal perspective.

In the online world, it seems that growth has become more important than the bottom-line. The number of new services/products offered by Overstock and the sales in different sectors are good indicators of company success and describes the learning growth perspective. As far as I know, automobile sales and real estate were not initially part of the Overstock model, so I’m sure during the early stages of these sectors they really looked at growth in the numbers of houses listed and cars purchased.

What firms typically see as traditional metrics, such as market share, sales and ROI, represent the financial perspective. These numbers have always been the most powerful in our sense of economy. However, in web 2.0 when it is almost impossible to see huge market share increases, the metrics are more subtle and engagement focused.

Turnitin.com: Copyright Infringement?

The web is continuing to change the way in which we view intellectual property. Infringements of copyrights and violations of privacy are far harder to define than they once were. With so much content “out there,” lines become blurred as to what is acceptable use, and even if something is being used inappropriately, it becomes difficult to find a manner in which to stop the misuse.

Copyright infringement issues have been raised by students over Turnitin.com, an online anti-plagiarism service for educational institutions. iParadigm, the maker of the service, however, has achieved a hero’s status in the minds of many educators. To them, Turnitin is a long overdue weapon in the fight to protect the integrity of academics in our copy and paste culture. Teachers simply have their students upload completed essays and papers to the site and within moments, Turnitin will scan the document and produce an originality report that shows whether or not parts (or all parts) of a piece have been borrowed from another source. The service now allows teachers the GradeMark option to even grade the papers on the site, making the transaction paperless.

The backgrounder on the Turnitin.com website explains the system in this manner:

“At the heart of Tunitin’s easy-to-use service is iParadigms’ proprietary and complex document source analysis technology. This technology creates unique digital “fingerprints” of each text document, including those submitted through the Turnitin plagiarism prevention system; these finger prints are then compared with the fingerprints of other data in iParadigms’ databases. The system locates and catalogs information from other sources likely to be used for plagiarism, searching billions of Internet pages, millions of student papers, and commercial databases of journal articles and periodicals. Comparison of new submissions against this database ensures that papers can never be sold, recycled, or traded among students from different years, in other classes or other institutions.”

On the surface, Turnitin sounds like a handy tool for teachers to catch cheaters and discourage plagiarism. An overwhelming number of educators agree on its utility and the service has been adopted by over 6,000 institutions in 90 countries, including Harvard and Georgetown universities [1]. However, there has been an international outcry over the role of student papers in this system.

As the backgrounder alludes to, Turnitin contracts with an institution and then student papers are uploaded and archived as these “fingerprints” or copies. These works are kept indefinitely in the database and add to the effectiveness of the tool. The database boasts over 22 million student papers and claims to archive 100,000 student papers a day [1, 6].

Four students, two from McLean High School and two from Desert Vista High School in Arizona, filed suit in 2007 in Virginia against Turnitin for archiving six essays that the students had obtained copyright registrations for [1]. At these schools, students must agree to iParadigms’ terms or fail the assignment, or risk expulsion [6]. The lawsuit seeks $900,000, $150,000 for each of the six papers. One of the students even requested that Turnitin not archive a particular essay, and they did anyway.

The real question is if whether taking essays, converting them to electronic files, and then keeping them in the online database is “fair use” or not.

According to the United States Copyright Office, fair use of copyrighted material depends on:

- “the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes”

- “the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole”

- “the effect of the use upon the potential market for or value of the copyrighted work” [7].

The Purpose

Most of the time, using copyrighted works in a non-profit educational setting is considered appropriate. While Turnitin may argue that they are for educational pursuits, the company is certainly not a nonprofit. A subscription for unlimited use of Turnitin services for a mid-sized college or university runs about $5,000 [2].

Nature of Copyrighted Work

Facts cannot be copyrighted, but original and creative works can be, and that type of work constitutes a large part of what Turnitin is receiving from students. The student’s essays constitute copyrightable material and they were able to obtain a copyright already in this case.

Substantiality of Use

Typically, if only an excerpt of a piece is used, or a part substantially less than the whole, then it is considered fair use. In this case, Turnitin copies the entire work to the archives and scans new student documents with the entire copied/archived work.

Effects on the Potential Market

While it is not clear how or if the students were planning on profiting from their essays, Turnitin argues that the work is only archived for the digital fingerprint which does not threaten marketability. The work is not copied, displayed or published in its entirety from the database [4].

Ultimately, on March 2008 the district judge threw out the case, ruling that the school systems should deal with the issue, not iParadigm [4]. In a press release on the Turnitin site, it explains that the judge sees the use of the documents to be fair and that such use “provides a substantial public benefit through the network of institutions using Turnitin.”

Turnitin simply adds “a further purpose or different character” to the works and works of this “transformative” nature are not in violation.

In April 2008 the students appealed the judgment.

Beyond the McLean and Desert Vista high schools, students believe that iTurnitin taking their work without permission and profiting from it is inherently wrong.

In other countries, students don’t like that they have to upload their work to this website. Many universities are going to a “guilty-until-proven-innocent policy” where all students must have their work vetted by Turnitin first [2].

Trustworthy students worldwide seem to be the ones made to be uncomfortable – Maggie Woodley of Ryerson University in Toronto said “I’m an honest student, but I don’t like the way they’re using my paper. They’re keeping my work for their own purposes and I have no choice” [2].

Another student, Jesse Rosenfeld, from McGill University in Montreal is fighting McGill’s use of Turnitin. He received a zero when he refused to turn in an assignment via the site. “I’m supposed to hand in my paper to a private company, which is then entered into a database, which the company in turn profits from,” explained Rosenfeld. “I’m indirectly helping a private company make a profit off my paper” [2].

Students in Australia, specifically at the University of Melbourne, are demanding a form of compensation against risk of commercial gain by Turnitin [5]. The administration there is negotiating with Turnitin to have the students’ assignments purged every few years from the database, instead of holding on to them forever.

In a very different attack on Turnitin, students in London who do plagiarize have simply figured out a way to outsmart the system; they are adding symbols to their words, making them immune to scans because the copied text is no longer similar enough to the original work [3]. Students add $$**@ and accents onto words that the program cannot detect.

While iParadigm was able to escape from a copyright infringement charge this time, I wonder if they will be so lucky in the future. It sounds like institutions will need to rethink their usage of what they considered to be a benign online tool that ended up being a smoldering hot button among students for the past six years.

[1] TechNews – “McLean Students Sue Anti-Cheating Service; Plaintiffs Say Company’s Database of Term Papers, Essays Violates Copyright Laws” by Maria Glod, Washington Post Staff Writer, 3/29/07

[2] National Post – “Presumed Plagiarists: An American company is making money helping universities detect non-original assignments. Students who object to the practice want turnitint.com to bear the cost of a test case in the courts” by Sara Schmidt, 12/10/2003

[3] The Guardian – “Education: Crib sheet: Who are you calling a %*@*!* cheat?”by Jessica Shepherd, 6/3/08

[4] The Washington Post – “Virginia Briefing: Students Appealing Dismissal of Plagiarism Suit”, Associated Press, 4/24/08

[5] The Australian – “Plagiarism Risk Irks Students” by Jim Buckell, 03/17/04

[6] TechWeb – “Students Sue Turnitin Anti-Plagiarism Service for Copyright Infringement” 4/3/07

[7] United States Copyright Office – “Fair Use” http://www.copyright.gov/fls/fl102.html

The “originality” image is from turnitin.com, while the logo image is from the Cal State Fullerton web site.

Links to shoes I created

Just for fun, here are the links to the shoes!

NikeID

Puma Mongolian Shoe BBQ