If you still think that putting up a colourful and splashy website for your company's products, or running online ads about them, is enough to bring in boatloads of repeat customers, you'd better think again, according to Google's top IT executive.
What might have worked to pull people in a year or even months ago won't necessarily work now, Google CIO Douglas Merrill said during the opening keynote speech at the Computerworld US annual Premier 100 IT Leaders Conference in Orlando, Florida recently. He added that the key to online business success has become a constantly moving target, and that IT managers have a central role to play in making sure their companies can cope with innovative new competitors, the rise of global markets and the general disdain for traditional advertising among online consumers.
So what's a company to do to stay ahead of rivals and grow its business? The answer is not to be wedded to a technology and advertising world "that's gone", Merrill said.
"Your last million customers aren't going to tell you much about your next million customers," said Merrill, who also has direct responsibility for all of Google's internal engineering and support activities worldwide, as one of the company's vice presidents of engineering. "The world has changed, and we have to redraw all the maps, and all the assumptions that we make — and all the ways that we think about technology."
What's becoming more and more clear, he claimed, is that the most successful online companies are learning that "talking with your customers is markedly different than talking to your customers".
As a case in point, Merrill cited the experience of The Walt Disney Company with its "Pirates of the Caribbean" movie series. He said that after analysing a myriad of consumer-tracking data, Disney learned that it had so successfully marketed the first of the three films that some of the core target audience was becoming a bit "pirate-weary" before the other two films had even been produced and released.
But instead of simply putting out more ads, Disney created an interactive Pirate Island website that fans of the films could use to explore the landscape of the island at the centre of the storyline and "participate" with the characters in their ongoing adventures, Merrill said.
There's a Google connection, of course: the website is powered by the vendor's Google Earth mapping technology, which users have to download in order to utilise the site's features. Merrill said that nearly three-quarters of the visitors to the site do so, and that they spend an average of 18 minutes each wandering around the pretend online island.
"You can leave messages for Captain Jack," he said. But not a conventional one that many consumers are liable to ignore outright, he noted.
The same kind of thing happened with the infamous "lonelygirl15" videos that have been posted on YouTube, according to Merrill. Initially, they purported to be a series of videos made by a teenager named Bree in her bedroom, talking about her life and her family, which she said belonged to a religious cult.
The videos, which began appearing on YouTube in mid-2006, quickly became a web phenomenon. Merrill said that an early episode called "I'm Mad At My Parents" garnered 50,000 page views in the first two hours after it was released online. Later installments got 500,000 page views in their first day on the web, he added.
The lure of lonelygirl15 didn't end even after journalists and other online snoops revealed that Bree was a fictional character played by an actress who, according to her bio, was born in the US and raised in New Zealand. Viewership of the videos continued to skyrocket, as did participation in online chat rooms set up by fans of the series.
The people who watch the lonelygirl15 videos and take part in the chats are "your customers", Merrill told conference attendees. "Nobody cares that it's all a lie. All they care about is the engagement." As a result, he said, "you can let users write ads for you, or write the story."
That approach isn't without risks, of course. As an example of it in action, Merrill pointed to an online marketing campaign that General Motors Corp created for the Chevrolet Tahoe SUV in 2006, in partnership with The Apprentice. The auto maker posted Tahoe-related video and audio clips on a website and invited visitors to create their own ads, with text they could write themselves.
Predictably enough, some of the videos painted the Tahoe in a negative light, including oneparody ad that said the SUV's low gas mileage would contribute to global warming and concluded with a tagline describing the vehicle as "the ultimate padded cell". One marketing consultant said in a 2006 blog post that the campaign was doomed to fail from the start.
But on a GM blog that April, a Chevrolet executive insisted that the video campaign was "one of the most creative and successful promotions we have done". He wrote that an "overwhelming majority" of the 22,000 videos submitted at that point had been "earnest attempts at creating positive advertisements," and that the campaign "sure got people talking about the Tahoe." He also noted that GM knew it would get negative submissions but decided that it "would be summarily destroyed in the blogosphere if we censored the ads based on their viewpoint".
Whether the marketing campaign actually helped influence buying decisions or not, Merrill said today that Tahoe sales did rise in its aftermath — although they have since fallen to earth as part of a general decline in sales at the big US auto makers.
So why is it important for IT managers to pay attention to any of this? Because, Merrill said, IT is the key to providing the infrastructure that can support content requiring so much bandwidth and storage capacity. In the mainframe-dominated past, when lowering costs was the primary purpose of technology, "the optimal CIO job was invisible," he said. "That's not true anymore.
IT executives have to find ways to improve the scalability of systems in their datacentres, while still keeping costs from spiralling out of control, Merrill said. For example, he noted that Google relies on multiple datacentres to speed up searches for web users. But to prevent IT costs from getting out of hand, it does things such as use consumer-grade disk drives instead of higher-end models that are more expensive and power-hungry.
Building an IT infrastructure that can scale isn't easy, Merrill acknowledged. But, he added, there's no alternative. "The distinction between technology and business is antediluvian — it's gone," he said. "The good thing is it gives us more power [within companies]. The bad thing is that if we screw up, we take our companies with us."