Recently, I came across an article which focused on “15 reasons [why] luxury brands must be on twitter”¹. When I started reading those 15 reasons, it got me a bit worried. I was unsure as to if any of those reasons really had a merit for a luxury brand. Like most academics, when I read lists like these, I generally tend to do what academics do first. Research – to find out the scientific basis for such list.

Funny enough I came across a recent study carried out by an analytics company in the US, called Pear Analytics². The study was conducted by looking at the content of 2,000 randomly sampled twitter messages from the public stream of Twitter. The analyst then separated these messages into six buckets: (a) news; (b) spam; (c) self-promotion; (d) pointless babble; (e) conversational and (f) pass-along value.

The striking result of this study was that more than 40% of the total twitter posts were put in the category ‘pointless-babble’. Furthermore, some of the top 15 reasons mentioned above suggest the use of twitter for (a) news and (b) self-promotion. However, these two put together had not even a double-digit share of the twits (News – 3.60% and Self-promotion – 5.85%).

The study also revealed some other striking stats which have not been captured in mass-media. For example, 1 percent of the addicts contribute 35% of the total visit to twitter and 72% are just passers-by. These 1% consumers must be those extremely tech-savvy people I believe.

Another report by Gizmodo (one of the highly ranked tech-site) mapped twitter users by asking if only 100 people were on twitter how would it look like.³ It had similar results which demonstrated that there would be 5 loud-mouths in these 100, but more than 50 people would be lazy (not twitting even once a week and therefore hardly visiting) and 20 dead (with empty account). A report from TechCrunch (another highly regarded tech-site), also suggested that facebook has 12X the number of ‘addicts’ compared to twitter and stumbleupon can drive more traffic to your website than twitter.⁴

No doubt twitter is being talked about everywhere, however in light of the above evidence, is it really a place luxury brand or any brand other than technology brands should be?

I wanted to answer this question from a different perspective. This brought me back to some of my earlier posts regarding ‘what is luxury?’ and ‘importance of luxury value perceptions’. Luxury is an intricate web of emotions and can it be captured in 140 characters (and that too with a shortened link of some sort if the company is trying to drive some traffic to a specific webpage or website). Secondly, with 40% babble around the message what value will that message generate and what are the chances that it will stand out? Third, what are the chances that the real consumers will read it and take actions on the basis of these? With all due respect to the original author of the above mentioned 15 reasons, I beg to differ significantly and following are the reasons why I do so.

Looking at the 15 reasons posed by the author, I thought:

1. Will a company be able to convey that it is a dynamic, forward-thinking brand by being on twitter? Or will it be able to convey this by actually innovating and getting promoted by the people who are in the know?
2. Are luxury consumers really on twitter?
3. Have luxury companies made fun of their competitors in any sort of media? Differentiation and uniqueness is what drives luxury, isn’t it?
4. Do Gucci, Hermes, LVMH really need to be found? Hermes’ quarterly profit as announced today has risen by 55%.⁵
5. Are the patricians and parvenu really on twitter? If not, does a brand need to show its supreme desire is to serve these premium clients and customers?
6. With 40% of the twits being pointless babble does a brand need to leverage the massive momentum Twitter has garnered from offline media?
7. After decades of research behind us we are still not very close to understanding the “know, like, trust” reasons behind buying decisions? Will twitter really reveal that for us?
8. With luxury brands having strong signals associated with them, do they need to provide clients and prospects with the kinds of valuable tips and information that could come back to you in the form of more business and good will?
9. Looking at all of the above, will a brand be able to expand its value using twitter?
10. While most luxury brands are struggling to create a web-presence how relevant and manageable will special and time-sensitive offers be?
11. Will any brand really be able to offer useful information via twitter?
12. Will any brand manager be able to respond quickly to any customer care-related questions and issues that may have been aired publicly in a seemingly innocuous tweet or blog post? And doing so quickly may have its own kind of repercussions, isn’t it?
13. Can a brand really give those unfamiliar with the brand a small, delightful taste of what it is by using twitter?
14. Else than a quirky message (which most luxury brands avoid) how one can express the entangled web of o expressions on twitter?
15. Will a brand be able “to stay ahead of the curve” using twitter? Really?

Presently, I see twitter as more of a sensationalization tool, rather than a brand-building tool. It would be good for those brands which are sensation-seeking for sure. However, when your clientèle happens to be patricians and parvenus, do you really wish to focus on sensation-seeking of signalling? Probably in future this situation may change but as of now, the question remains on should luxury brands or for that matter any brand (other than tech brands) be using twitter?

While writing this post, my twitter client suggests that (with the 795 people I am following) I have already got more than 393 twits pending to be read if I refresh and instead of reading them, I have closed the client. Your message was lost if it was among them.

References:

1. The list of 15 items can be found here.

2. The full Pear analytics whitepaper can be downloaded from here.

3. The Gizmodo report is available here.

4. TechCrunch report can be found here.

5. Bloomburg on Hermes results.

Related Posts

1. What is luxury?
2. The local dimension of luxury
3. Massification of Luxury: the Chinese Invasion

In some of my earlier posts, I have stated that there are two simultaneous paradoxical needs among us consumers with regard to consumption namely, (a) to conform and (b) to demonstrate uniqueness. In sociology and psychology this has led to creation of various terms such as fitting in or standing out, in-group vs. out-group behaviour, associative vs. dissociative group behaviour. All these can be of great help in segmenting consumers.

Segmentation as an idea seems to have cropped up from political ideology of ‘divide and rule’ and it still seems to work in most contexts. In this article, I wish to focus on segmenting luxury brand consumers. Recently, I came across an article in Journal of Marketing focusing on status signalling behaviour among consumers. The article is interesting as it looks at how subtle signals can enhance and trigger consumer consumption decisions.

The authors coin four segments of consumers using the famous four P idea of marketing. They segment the luxury consumers into 4 segments namely: patricians, parvenu, poseurs and proletarians.

The definition of each segment is as follows:
1.Patricians are super-rich who pay a premium for inconspicuously branded products. They do not look for explicit signalling but largely focus on subtlety.
2.Parvenus are probably the nouveau rich who have suddenly amassed big futures and are trying show they have arrived. They love explicit signalling.
3.Poseurs are fakers. They buy fake goods to demonstrate their affinity to the above two groups. They would also use explicit signalling.
4.Proletarians are the left outs in socio-economic status. They do not buy luxury goods and do not signal either.

Attached below is the model provided by the authors in their Journal of Marketing Article.

Source: Han, Y. J., J. C. Nunes, and X. Drèze “Signaling Status with Luxury Goods: The Role of Brand Prominence,” Journal of Marketing, 74 (4), 15-30.

While the segmentation looks really interesting, the question which arises is how can managers actually use this in the marketplace?

For example, can a consumer be a patrician and parvenu at the same time? For example, what if the consumer is actually using a Hermis Berkin (discreet signalling) bag with Christian Laboutin shoes (explicit signalling)? Similarly, can a consumer be a patrician and poseur at the same time. For example, a consumer may use a Seville Row tailored suit with a fake Mont Blanc. What need to be understood is that there are no water-tight compartments when segmenting luxury consumers. Certainly, there will be consumers who will belong to only one category however, that segment may not be the largest segment for any luxury brand.

I believe that meaning luxury segmentation will incorporate situation specificity. I have found strong influence of situation on most consumers’ luxury consumption and therefore that pertinent question of “for what occasion do you wish to use this luxury brand for” can be one of the most important questions segmenting luxury consumers. What do you think?

Related Posts

1. Status (luxury) consumption in cross-national context: Managerial implications
2. What is luxury?
3. Massification of Luxury: the Chinese Invasion

A year ago, when it was launched, it was one of the most hyped products (service) from Google. It was hailed as the next generation of communication and the big G was promoting it as everyone will move away from regular email and will use Google Wave.

Today, it was announced that Google “doesn’t plan to continue developing Wave as a standalone product, but will maintain the site at least through the end of the year and extend the technology for use in other Google projects.”

Last December, after using it for a while, I wrote a blog post, ‘Will Google Wave really become successful?‘

One of the major faults I noted was that the service was “not engaging enough”.

One of the visitors on the post said “It’s like an Instant Messenger merged with email, but what’s new?” Another user stated “MSN does chat better, SKYPE calls better, GMAIL/Yahoo email better. So, where is Google Wave? Nowhere.”

What the above comments show is that the product didn’t have a clear positioning in consumer minds. I guess it was a positioning problem from Google’s end too. They were unclear as to what exactly was this service positioned in the overall package of Google’s services.

Integration is the name of the game in today’s technology marketplace. However, the integration needs a clear positioning. In one of his presentations at Google itself, Seth Godin discussed this issue in details, that it’s not engineering innovation, it’s how your consumers perceive your product to be, is what matters. I keep on saying that ‘success is the most successful recipe for failure’ and I guess the success of Gmail and Gtalk brought this for big G.

Many companies prior have also failed in their line extension and integration efforts. For example, in mid 1980s, Xerox diversified into financial services industry by buying insurance companies and investment banks with one of the logic being, insurance will be a good extension service which will integrate itself with the sale of the costly photo copier. However, in about 5 years time the realisation hit fair and square with Xerox losing billions of dollars overall. By the mid 90s Xerox left the financial services portfolio and re-positioned itself as a document company. The whole diversification idea by integrating an ill-positioned product and service mix boomeranged.

There are many other positioning examples which boomeranged, including the video phone which was launched in mid 1970s and never caught the wave or similarly dishwashers and microwave ovens in Asian and Latin American markets. The consumer reluctance was a results of poor positioning more than anything else in these cases. And big G is no exception to this!!!

Google chief executive Eric Schmidt said it was hard to say why Wave did not strike a chord with a majority of users. “It’s a very clever product. You never know why it didn’t work.” He also said “Google will take what it has learned and apply it to something new”. I guess the biggest lesson learnt here is positioning than anything else.

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1. Will Google WAVE really become successful?

While listening and later on reading Apple’s defence of the ‘Antennagate’, I felt how much strategic thinking has gone into this and how the debate was PR driven rather than having any talk of substance.

Apple won praise of customers and non-customers alike because it stayed at the upper spectrum debate previously. It looked at Windows and others from there and probably with its additional focus on pleasing design and customer friendly interface won accolades from journalists and others. It had its own few problems with mainstream products such as battery drain on iPods and laptops heating up quite a bit. However, it used its PR machine and somehow never lost ground because of the much envied brand position in the marketplace.

iPhone4

Previously, when defending itself in the marketplace Apple was a market follower in the sense of market share and value as its major rival was Microsoft. It was always number 2 behind Microsoft when the comparison was made. And we all know our love of the underdogs since the days of Avis (We try harder).

However, this time it’s different. With this latest iPhone4 scenario for the first time Apple has become market leader in terms of company valuation. Now it is bigger than Microsoft. In later part of May, Apple market value was at USD 222.1 bn, higher than Microsoft’s USD 219.2bn.

An underdog playing the PR game is always loved. However, when it comes to leader people tend to take it differently. Remember, when Microsoft gave free sample of its latest OS to some prominent bloggers, the debate moved from the good or the bad of the OS to ethical issues relating to is this good practice from Microsoft or market exploitation.

With regard to Apple’s response to iPhone4 problems, it can be summarised in following two ways:

1.    Look ma – everyone is doing it
2.    Denial –> below par acceptance –> shallow strategic solution

When Steve Jobs stated that the media over hyped this issue, he and his PR team does not seem to realise why people love Apple. They do so because it is above par, it continuously strives to be excellent, it is supremely design focused. The first response (Look ma – everyone is doing it) was in line with Apple’s original attacks on Microsoft (remember the ‘I am Mac’ advertisements). It worked because it was the underdog in that situation. However, this time being the leader in the marketplace, this made Apple more vulnerable as it dragged others prominent companies in the debate. Moreover, the issue was associated with Apple’s core defence in the marketplace, the design of the product.

The second part of response mechanism is purely PR failure. First, Apple denied the problem by saying ‘hold the phone differently’ (Denial). Then it made a grave mistake of asking consumers to pay $29 for the bumper for something which was its own mistake rather than consumers (below par acceptance). And when ‘consumer reports’ decided it is not going to provide the usual great review of the product it changed its position saying we will provide the covers for free (shallow strategic response).

Apple needs to learn how to respond to like a leader if its wishes to be a leader. Leaders are supposed to understand and care about the problem, they need to remain loyal and focused and above all they need to be honest and when required, take the blame rather than pass the buck.

Apple seems to have violated all of the above rules in the response to the ‘Antennagate’. Moreover, as I stated earlier, it has made itself extremely vulnerable by stating it happens with other phones too. Nokia and RIM have straightaway reprimanded Apple for doing so in public. This doesn’t bode well for any brand when all competitors go against it. However good Apple as a brand is, this probably is a wrong strategic move. It needs to look how other leaders like Intel, Sony and others have dealt with failures.

Related articles from other sites

• Apple’s Claims About Other Phones – There’s a Response for That (blogs.wsj.com)
• Apple’s iPhone 4 Antennagate Timeline (pcworld.com)
• RIM Responds to Steve Jobs Over Smartphone Claims: Baloney (cbsnews.com)

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Most consumers in developed and emerging markets are now facing an interesting choice making dilemma. It’s the dilemma of plenitude. This relates to most purchase decisions which includes a wide spectrum of products and services from buying corn flakes (a fairly low ticket item) to a car (a fairly big ticket item) and even the car insurance as well as accessories. The plethora of choice creates two major psychological conditions in consumer minds:

1.    Consumer confusion: I have dealt with this in some of my earlier posts focusing on antecedents and consequences of consumer confusion.
2.    Consumer compromise: This post focuses on the compromise effect in our decision making.

The compromise effect academically has been given another interesting name ‘perceived sacrifice’. Let’s take an example of how it happens. Imagine that you are planning to buy a new phone. There are several major considerations when you are thinking of buying a mobile phone:

1.    Service provider
2.    Type of contract
3.    Brand of phone
4.    Type of OS
5.    Size of Applications market
6.    Features of the phone and so on…

Let’s say you want a sleek phone which is very quick (for example, HTC LEO) however, you don’t want to be stuck with the old OS which is as such going to be replaced soon (i.e. WinMo 6.5). Then you read about the holding issue relating to iPhone 4 and now look at Symbian based phones. However, you want WinMo type of connectivity and freedom. And we are back to square 1.

As there is no perfect phone we try to compromise (or sacrifice) several benefits to the cost of the product or service. Researchers have observed that buying behaviour may change depending on how the perceived compromise balances with the cost. Perceived compromise consists of monetary aspects such as price and non- monetary aspects such as time, search costs and physical efforts. Most of the research has identified monetary aspects as the major contributor to perceived sacrifice. However, I believe with the extending features based battle in the marketplace and price points remaining fairly constant across brands, non-monetary aspects are becoming ever so prominent in consumer decision making. This increases the compromise effects.

Such compromise effect can have a direct effect on consumer choice goals (anticipated regret, evaluative costs, choice confidence and justification) and perceived value of the product or service. This is because buyers’ perception of value is based on trade- off between the product compromise they perceived in comparison to the sacrifice they perceived in monetary terms.

So, the higher the compromise:
a)     the higher the anticipated regret
b)     the higher the evaluative costs
c)    the lower the choice confidence and justification.

Therefore, compromises can have a significant impact on value and future behavioural intentions of consumers.

This is a really ripe of area for research and the compromise effect needs much further empirical attention. Experimentation as a technique can greatly help us understand the impact of consumer compromises on final decision making.

Related Posts

1. Consequences of consumer confusion
2. What is luxury?

It has been well-established in psychology literature that consumers are highly irrational in most of their decision making. Moreover, Daniel Kahneman (the Noble laureate) and Amos Tversky (who would have also won it if he didn’t die in 1996) have shown using various experiments throughout their research career that we as consumers are very poor judge of value derived from a product or service. Similarly, Dan Gibert in his fantastic book ‘Stumbling on Happiness’ demonstrates that we are very poor in developing foresight. This has been used in stock market sense successfully by Nicholas Nasim Taleb and his followers. Dan Ariely in his book ‘Predictably Irrational’ demonstrates using simple experiments how consumers are gullible through this irrationality.

An interesting example of this consumer irrationality was observed through a survey carried out by the price comparison website pricerunner in the year 2006. In a study focusing on ‘which consumer appliance is the biggest waste of money’ the results showed that the ice-cream maker topped the chart. It was found that ice-cream makers were taken out of the cupboard on an average once a month and cost £19.50 for every use and many of these were used only once in their whole life cycle. If you are not one of the ice-cream maker buyers and feeling happy about it that you don’t belong to that irrational club, think again. How many of your last 10 product purchases have been rational? The answer will surely surprise you.

While consumers are also irrational, companies are not far off from it (at last, companies are also made up of consumers in a way). For example, Ford created Mondeo in early 90s the first Mondeo which was hailed as a global car: A completely new category and gap in the marketplace. After some quick initial success the car struggled in its prime markets, EU and USA, and a new version of Mondeo was launched in 1994. When the next version MK2 was launched, it was announced that the car had become category leader and was even declared as the car of the year 1994. However, analysts reported that neither of its MK1 or MK2 models sold big in any markets as consumers in European markets thought it was big and Americans didn’t find it big enough. After the launch of several variants it still is far from that big success which was aimed for.

Companies have used this consumer irrationality greatly to their advantage and none so more than Apple inc in high-tech industry. The recent launch of iPad is the clear example of this. In the launch presentation Steve Jobs stated that iPad fulfilled a very big gap between the Netbook and PC market. He said both were very poor which I somehow failed to understand as I have been using them both for far longer period and have been able to accomplish almost all the tasks required of those gadgets. Similar claims were made by Ford when Mondeo project was launched and executed.

In the last 2 weeks, I have had a good chance to use iPad and I can say one thing for sure, it’s the ice-cream maker of the high-tech world. It’s the Ford Mondeo of the high-tech world. It is one of the biggest high-tech innovations which is seriously thriving on consumer irrationality than anything else. I do not wish to say that the device is not interesting but I completely fail to understand how it fills that gap what Jobs alluded to in his launch presentation. The only thing which got me attracted towards it was my irrationality and the media hype surrounding the product. A Ford Mondeo in re-making? Only time will tell.

Leads me to state a variant of an old Indian ad-age: “Till consumers are irrational, marketers will thrive…”

Other interesting reads:

• Tell Your Gut to Please Shut Up (blogs.hbr.org)
• Economist argues irrationality’s benefits (boston.com)

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For those of you who are researching the Asian economies, this is an interesting chance to participate in the debate. The ‘Marketing in Asia Group’ (MAG) is organizing the 2011 MAG Scholar Conference in Christchurch, New Zealand.

MAG consists of more than 400 researchers from all over the world and this conference will be a good chance for others to get in touch as well as join the network.

I am chairing the track ‘cross-cultural marketing’ and if you are working on cross-cultural issues, will be more than happy to hear from you.

The call for papers is attached herewith.

2001 MAG Scholar Conference Call for Papers

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When joining the ‘luxury society’ group, one of the interesting questions they asked was to provide your own definition of luxury.

My response to that was “luxury is a state of mind. It is about how you carry yourself and fulfil yours as well as others desires”.

My idea focused on the issue of luxury from the perspective of self and others. One does not consumer luxury for just oneself but it is very much socially oriented consumption. For example, why do wear the best suit (dress) when going for an important meeting or interview? Why do we make sure that we do not use a cheap perfume when going on a date? The aspect of self-indulgence is intertwined with the socially directed motives when it comes to luxury.

However, the questions asked at luxury society really made me think about how we define luxury.

The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes. It also meant the definition of luxury was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury.

With increasing ‘democratization’, several new product categories were created within the luxury market which were aptly called – accessible luxury OR masstige luxury. This kind of luxury specifically targeted the middle class (or what is sometimes termed as aspiring class). As luxury penetrated into the masses, defining luxury has become ever so difficult.

In contemporary marketing usage, Prof. Bernard Dubois defines ‘luxury’ as a specific (i.e. higher-priced) tier of offer in almost any product or service category. However, despite the substantial body of knowledge accumulated during the past decades, researchers still haven’t arrived on a common definition of luxury.

While the word ‘luxury’ is used in daily lives to refer to certain lifestyle, the underlying construct’s definition is consumer and situation specific. If you earn less than $ a day, an ice-cream would be a really big luxury item for you. On the other hand, if you are going to a party with some big-wigs a $100,000 car may not be a luxury. The word luxury originates from the Latin term “luxus” signifying, “soft or extravagant living, indulgence, sumptuousness or opulence”. However, luxury is quite slippery term to define because of the strong involvement of human element and value recognition from others.

Many other attempts have been made to define luxury using the price-quality dimension stating higher priced products in any category is luxury. Similarly, researchers have used the uniqueness aspects of luxury too. However, with increasing quality orientation from lower end brands and massicification of luxury, it is hard to use either of the above dimensions to define luxury.

Prof. Jean-Noel Kapferer, takes an experiential approach and defines luxury as items which provide extra pleasure by flattering all sense at ones. Several other researchers, focus on exclusivity dimension and argue that luxury evokes a sense of belonging to a certain elite group. However, having an LVMH hang bag in central districts of any big city across the world, won’t make you feel that way. Rather in one of the earlier posts when I asked the question ‘if others can have it, is it luxury?’ consumers responded clearly saying that LVMH and Gucci are losing their lustre by the day in their minds.

The discussion above highlights the extremely subjective and multidimensional nature of the luxury construct. The attempts very much define a dimension of luxury such as high price, high quality, uniqueness, exclusivity etc.

However, it is still unclear ‘What is Luxury?’

So what do you think is luxury?

Related Posts

1. The local dimension of luxury
2. Segmenting luxury brand consumers
3. Massification of Luxury: the Chinese Invasion

Recently, I was talking to one of my colleagues who was mis-sold his mobile phone contract. Interestingly enough, I stumbled across a research carried out by the Financial Services Authority (FSA) in the UK which suggested that more than 9% of all consumers were mis-sold products or services in recent past.

Mis-selling

Several questions emerged in my mind:
1. If mis-selling is so prevalent, what actions are we taking to avoid such things from happening?
2. How and what do we define as mis-selling?
3. If the salesperson (in retail setting where they are selling 100s of products) is unaware about certain attributes of the product or service, is it really mis-selling?
4. When you got aware that you were mis-sold, what actions did you take personally?
5. What factors affected your actions?
6. Was the total monetary impact important for your action (for example, if the mis-selling required you to pay a small amount to rectify the problem did you complain)?
7. What kind of complain did you do?
8. Did the supplier agree that you were mis-sold?
9. Did you think about the legal option? If so, did you take that option? If you did not take it, why not?

I would really be interested in knowing your stories of how you were mis-sold a product or service. Please share.

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In this post, I want to focus on how a completely new and highly strategic internet marketing revenue model has been created by the brains behind Indian Premier League (IPL).

Most of the readers of this website I believe are aware what is cricket? It is a game of umpteen nuances and is being followed by more than 2 billion people around the world (I being one of them). In recent years, a new format was added named Twenty20 (T20) wherein only 20 overs are bowled. Presently, there is one regional contest going on called the ‘Indian Premier League’ (IPL). India is one of the major countries where cricket is taken quite seriously and is the most popular game. The model has similarity to the Football Leagues around the world wherein local clubs recruit local and international players and compete for winnings.

Let me first pose the problem. Most sporting tournaments require funding and a substantial chunk of this funding comes from Television rights and TV advertising followed by various other tactics such as merchandising and recently online rights. The advent of new technologies including peer-to-peer networks mixed with higher broadband coverage across many countries has created parallel channels for viewing the live event broadcasting without paying the required fees. It seems that such practice is quite popular among younger generation. This has a direct impact on the revenue an organizer of sporting event can generate.

Most event organizers dread these new media of live event broadcasting on internet by an individual sitting in his o

r her own house with a broadband connection which then is being watched by many others. These individuals using their own websites charge nominal fees for the broadcast and sometimes make these events available for free. Some of these websites use elaborate email marketing, web advertising, web marketing and mobile marketing to lure consumers. This in turn means that the original broadcaster loses revenue due to an illegitimate supplier. Most times corporate event organizers try to go behind these individuals following legal route which in itself is quite resource intensive.

IPL which is in its 3rd season is also one of the quite popular cricket events watched by more than 1 billion people across the world. Such event will surely face the problem of live event broadcasting by various individual cricketing websites.

However, the organizers have created a completely new streaming model which has put all these problems to end. They have partnered with one of the most trusted brands in online viewing of various media – YouTube. The event is being broadcasted live on YouTube for free. The model has some interesting strategic implications for all involved including consumers, IPL organizers, advertisers and YouTube (Google).

1. It stops those illegitimate suppliers of streams as the event is broadcasted for free.

2. Using YouTube’s technology the event is broadcasted with quality optimal for an individual’s connection speed. This in turn, created a better user-experience.

3. It increases the reach of the event to a much wider audience. Not all viewers on YouTube will be aware of cricket but some of them will be exposed to the sport.

4. Two new sources of revenues can be observed: (a) google’s online ad revenue network which is one of the most sophisticated and (b) advertisers who wish to advertise on the live event.

5. This also provides an opportunity for advertisers to geo-target the audience to utmost finesse. The reason for this being google’s advance geo-targeting mechanism. In turn, this can reduce the overall spend and bring much more focus in terms of overall revenues.

6. This event also provides YouTube (Google) with an added weapon in their armoury, which is to go to other event organizers and get the online rights to broadcast events on this massive scale.

I believe that this strategic masterstroke delivered by IPL organizers have created a completely new revenue model for event organizers which brings about a win-all situation. The only loser being the illegitimate online broadcaster. I believe other event broadcasters should seriously look into this new way of generating revenues and utilize the opportunity to the fullest extent.

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