In a 22-minute podcast, Diageo is testing the waters of a new technology that has yet to catch fire as a “must have” tactic in the overall marketing mix.

The podcast, Diageo’s first, pulled together segments on its top brands, from Crown Royal whisky to Smirnoff vodka to wines from Sterling Vineyard to Guinness beer. The podcast was themed around the holidays and segments offered a history of the brand, as well as some lesser-known facts (i.e., during the 1940s, BV wines were served at all White House functions).

“It’s a great opportunity for us to get our entire portfolio in front of consumers,” says Gary Galanis, Diageo’s VP-corporate relations, who played the part of a bartender in the podcast. “[We] tell a much fuller story about holiday entertaining than if we had one particular brand or one particular category.”

Last year, 4.8 million people downloaded a podcast, compared to 820,000 in 2004. By 2010, the podcast audience is expected to reach 45 million users, a conservative estimate that could go as high as 75 million, according to a study by Bridge Ratings, a provider of radio audience measurement.

But whether or not podcasting catches on as a truly successful advertising medium is yet to be decided. Brands can sponsor podcasts or make their own, and while interest is certainly growing, the challenges, as well as the benefits, abound.

Pricing can be a flat rate, incorporated into a larger buy or based on CPM or number of downloads. Metrics and benchmarks are limited, with success often based on month-to-month growth of the number of downloads. Lead generation techniques are not widely available and it can be difficult to tie podcasts to incremental sales. And the FCC is deciding whether to regulate pod casts.

One enormous benefit is the ability to reach a highly targeted audience that can download audio and video content and listen to it when and where they like, or right there online if they so choose.

“As in TV or print or other mediums, where some might want to hear your message and some might not, [podcasts] are one of the most highly targeted forms of communication in the marketplace at this time,” says Erik Sjogren, senior brand manager for Dixie, a Georgia-Pacific brand.

In March, Dixie is set to launch its first sponsorship of a podcast in a full-year deal with Mommycast.com, a weekly internet radio show created by two moms, Gretchen and Paige. The site gets about 600,000 downloads per month.

The deal includes exclusive Dixie branding on the site’s weekly podcast — that will lead in and exit with copy about Dixie products — as well as on the site itself. In addition, four 20-25 minute broadcasts will be developed around content suggested by Dixie, such as how Dixie can help with quick meal preparation and clean up.

Dixie plans to integrate the sponsorship across many platforms including TV, print and public relations.

Some brands shy away from partnering with existing podcasts because of a lack of control over content and are making their own.

“The ability to control what is said about brands is getting harder and harder,” says John Feldman, a partner at Reed Smith LLP. “People have to have a plan to help control what’s out there.”

Diageo had full control of its podcast, created in house and hosted by Susan Kelleher, an independent broadcast consultant, along with Guy Smith, Diageo’s executive VP-corporate relations. The two were filmed seated at the bar on the 7th floor in the company’s Norwalk, CT, headquarters, with Galanis tending bar in the background. The podcast is peppered with interviews and other images taken by Diageo on location at The Night Club and Bar Show, held last March in LasVegas. Other employees also appear during the podcast, including Ivan Menezes, the president and CEO of Diageo North America PLC.

Each segment includes facts and lore about the particular brand. For example, during the segment on Bailey’s Irish Cream, Kelleher says, “Irish lore has it that four out of every five cows in Ireland work for Bailey’s Irish Cream — after all, it is the world’s sixth biggest spirits brand.” Smith adds that it’s an ingredient in more than 500 drink recipes and then cuts to a segment filmed at the show where “resident expert” Peter O’Connor offers up more facts about Bailey’s. Images of the product are shown and a voice says, “For a sophisticated after dinner drink, try the Bailey’s Alpine.” A recipe appears and the directions are read on how to make the hot coffee drink, mixed with Baileys, Rumple Minze and hot coffee.

Plans called for incorporating scenes from the podcast into TV spots for cable and providing links online. The format of the podcast is fluid and Diago plans to change and update it based on upcoming holidays and seasons. Diageo is making plans to use the content across a number of marketing platforms.

The introduction of the iPod nano, which allows for the display of video content, has upped the podcast ante. The iPod nano made the Business Week “Best of 2005” best products list and podcasting made the best ideas list.

Volvo, which has been having success sponsoring an audio podcast it helped develop in a partnership with Autoblog.com, this month debuts video podcasts so images of its vehicles can be incorporated with the content.

“We view podcasting right now as a niche oriented medium, but one we think has huge potential,” says John Neu, manager of CRM and e-business for Volvo Cars North America. “It’s really neat when someone is actually knocking at your door for something, and that’s exactly what these consumers are doing.”

The site claims to “obsessively” cover the auto industry (in fact, the CEO of General Motors keeps a blog there) and its demographics are a perfect match with Volvo’s high household income and early adopters, says Anna Papadopoulos, the interactive media director at EuroRSCG 4D in New York, which handles the sponsorship.

“[Autoblog.com is] the go to place if you were going to buy a car,” she says. “It is an audience that is small, but a very important audience that we wanted to speak to.”

She says Volvo and Autoblog decided to create an Internet radio show around the site’s hundreds of blogs that would incorporate, in a somewhat loose fashion, content about Volvo vehicles. The podcasts are promoted on the home page with a link to the downloadable version. The first monthly podcast that ran in February 2005 drew 40,000 downloads and within six months 120,000 podcasts had been downloaded. Banner ads at the site support the podcasts.

“If you create something that is really good, people will stay with it,” says Dave Goodman, president of marketing for Infinity Radio.

The Pod People

No, they aren’t alien life forms from a 1950s B-movie. But they are multiplying rapidly, taking over positions of influence, perhaps even in your very own home town. You may be one of them…

Over 4.8 million people downloaded a podcast from a radio station or other source in 2005, compared to just 820,000 in 2004, according to Bridge Ratings, which measures radio audiences. By 2010, podcasts may reach 45 million users. Other findings include:

• 20% of those who download podcasts do so weekly. This group downloads an average six podcasts per week.
• Only 20% of this group currently listen on MP3 players.
• ‘Innovators’ pull the change in technology use and comprise 2.3% of the overall population.
• ‘Early adopters’ comprise another 13.5% of the population; these opinion leaders try out new ideas and technology, but carefully.
• The skeptical ‘Late majority’ are 34% of the population.
• ‘Laggards,’ at 16% of the population, are traditionalists who tend to be the last to adopt a technological innovation.
  — PO

Ed Mufson’s company is the ’90s version of the fabled DM kitchen table start-up. A year ago, Mufson, who’s been in retail for 30 years, was thinking of opening a store selling brand-name clothing at a discount. Someone he met at a party suggested he do it on the Web. At the time he didn’t even know how to turn on a computer. He spent four months researching the idea, and in February launched Deal-A-Day (www.dealaday.com). His business, a sort of Filene’s Basement of the Web, is now growing steadily and is on target to bring in $250,000 in its first year.

Mufson knows that the “build it and they will come” philosophy from a few years ago is but a fond memory. He has to work at drawing traffic to his site. But finding out what’s working and the right mix-ah, there’s the rub.

He’s not alone. Now that everyone and their mother has a Web site, the problem is getting people to come visit. Going beyond the banner has been a rallying cry for some time. A consensus seems to be building that the Internet is made for integrated marketing-in the sense that the new medium has hidden crevices unique to it. This means trying out various approaches, from so-called guerrilla marketing to partnering with other marketers to, yes, using banner ads.

“We advise people that they have to take a more holistic view of it,” says Patrick O’Flaherty, design director for eCentric Consulting (www.ecentric.com), New York, which develops transactional and e-commerce sites. “You have to think from the bottom to the high-end, from getting the right URL to doing deals with other sites to sometimes building temporary Web sites. A lot of times people think of banners but not the other stuff.”

Paul Graham, president of Viaweb Inc. (www.viaweb.com), the Cambridge, MA-based online-store hosting company that was bought last month by Yahoo Inc., says marketers should approach a plan in this order: Get indexed with search engines. Watch which words are bringing surfers to your site (assuming your software can do that). Then buy ads on the search engine sites geared to those words (for example, Viaweb has bought “shopping cart software”). Expand into affiliate programs. Use e-mail lists. Then maybe try some offline media, such as print ads or radio.

So, what’s working?

The age-old question-Banner ads: branding or direct marketing?-seems to have been answered in favor of the former. Click-through rates have dropped from a high of 4% a few years ago to less than 1% today. The Web is awash in banners now; they’ve lost their novelty. Most importantly, marketers report poor results from them.

But they can be an effective way to respond last-minute developments. Last summer, on the night Mike Tyson infamously chomped at Evander Holyfield’s ear, EyeScream Interactive (www.eyescream.com) whipped up a related banner for an online computer seller (“Cyberian Outpost takes a bite out of computer prices”) and had it on 200 sites by 8 a.m. Pacific time. The ad garnered a 14% click-through. “The best online advertising takes advantage of the time element,” O’Flaherty says. “You need the flexibility, the ability to react to opportunities.”

Another successful and related exception to the banner doldrums is their use for special occasions. Service Merchandise enjoyed great success with this year’s Mother’s Day campaign, says Larry Weissman, president of Paradigm Interactive, Atlanta, its Web advertising company (www.paradigminteractive.com). Weissman is pushing the concept one step further with banking client Crestar by creating the event, a day at the ball park centering on Baltimore Oriole Cal Ripken. The campaign began in April and included billboard and radio ads, in addition to banners.

A more targeted way of using banners is to pay to have them appear with a search result at a search engine when consumers use certain keywords. Buying a keyword is more expensive than placing ads randomly around a site (“run-of-site ads,” in the lingo)-about 5 to 7 cents per impression as opposed to 2 cents-but well worth it. Unfortunately, the more popular words (“host,” “hosting,” “apartments,” “automotive”) are selling out.

Experts advise marketers to buy words that people use when in a purchasing mood, not when they’re simply looking for information. The more specific, or obscure, the word the better. For instance, one of Viaweb’s clients, VitaNet Nutritional Products, knows that in one six-month period on Yahoo! the search term “norandrostenedione” (don’t ask) brought in $2.38 per visitor as compared to only 10 cents per visitor for “perspiration.”

Deal-A-Day bought “clothing” and some other words on Yahoo! but was disappointed in the small conversion on its 2% click-throughs. Mufson then tried opt-in e-mail lists from NetCreations Inc. (www.netcreations.com), a New York outfit. The first day he had 500 people sign up for his free “preferred customer” program, which now has about 4,000 members.

Indeed, e-mail as a marketing tool continues to grow in popularity, becoming the preferred “push” technology. A consumer who has opted-in to an e-mail list is akin to a pre-qualified lead. And even better, you can up the ante by creating a direct link to your site and embedding it in the message for instant conversion. Anders Ekman, president of Boston DM agency Berenson, Isham & Partners, says that response rates from opt-in e-mail are generally twice that of banner ads. Regina Brady, leader of Acxiom Direct Media Inc.’s Interactive Group (www.directmedia.com), says she sees click-throughs of 20% on her company’s e-mail marketing program, E-Mail Campaign Management.

There are several ways to get e-mail addresses. NetCreations has about 1.2 million unique names available. Promotional companies like CyberGold (www.cybergold.com), MyPoints (www.mypoints.com), Intellipost (www.intellipost.com) and Yoyodyne (www.yoyo.com) also gather addresses. Some content sites rent out their lists. And, of course, you can collect addresses at your own site.

The biggest trend in Web marketing, especially for large merchants, is to seal alliances, often called “distribution deals,” with portals. Portals are major sites that surfers go to when first hopping on the Internet. The top nine portals, according to Cambridge, MA-based Forrester Research Inc. (www.forrester.com), are AltaVista, America Online, Excite, Infoseek, Lycos, Microsoft, Netscape, Snap, and Yahoo!. According to Forrester’s survey of 51 content sites, 31% of their traffic comes from distribution partners. An example of a distribution deal is the $50 million Cendant Corp. paid for a chunk of real estate on AOL.

But the worth of these deals is hotly debated. Forrester has found that the top nine portals get only 15% of the traffic and well over half of that is from Yahoo! and AOL. More surprising, that share hasn’t changed from a year and a half ago. Forrester predicts that portals will go from 15% to 20% of total page views by 2002, but will drop from 59% of ad dollars to 30%.

“There’s been a belief that portals are capturing a large share of Internet traffic but that’s not the case,” says Chris Charron, an analyst in Forrester’s media and technologies group. “The Internet will be more diffuse than any other media.”

Charron says that the answer to the fractured Web problem will be affiliate marketing, also called syndicated selling: Putting points of sale all over the Web. For example, online bookseller Amazon.com has affiliate relationships with tens of thousands of sites. If a content site discusses a certain book, it places a link to Amazon so the surfer can immediately buy the tome. Acxiom/Direct Media puts banners around the Web for its CatalogLink (cataloglink.com) service and splits the 50 cents it gets for each click from its catalog partners with the referring Web site.

Companies looking to aide in these syndications (for a price) are cropping up. They include Impulse! Buy Network (www.impulsebuy.net), BeFree (www.befree.com) and LinkShare Network (www.linkshare.com). LinkShare acts as a kind of broker, where content providers (currently 6,000) announce their availability for such deals to transactional sites (currently over 140).

Most of these affiliations are done through revenue-sharing deals, and can be expensive for the merchants. But as Viaweb’s Graham points out, once you grab a customer through one of your partners, he or she will come directly to your site the next time-and (one hopes) the next time and the next time-at no cost to you. “Give a big percentage-as much as you can,” Graham advises. “At this stage you want to grow your customer base.” And, as eCentric’s O’Flaherty points out, “Affiliations aren’t just driving traffic, you’re actually making sales.”

Elaine Rubin, who started 1-800-Flowers on the Web and is now president of consultant E.K. Rubin Inc., Syosset, NY, says that such affiliations can be part of a guerrilla marketing campaign. The Web is rife with cheap or free ways of marketing, such as building communities, using Usenet groups, linking to sites with similar demographics and getting placed high on search engines. (For more on ways to effectively utilize search engines, see the Interactive section of the August issue of DIRECT.)

Finally, there are offline media, such as mail, print, radio and TV. Internet marketers used to believe it was foolish to advertise in the real world, but that thinking is changing. Internet users, they’ve discovered, are also real people who watch television and read magazines. Some think radio works better than TV because people listen to the radio while they work at their computers (BarnesAndNoble.com, for one, runs radio ads). Internet-marketing experts agree that offline media should be used only after online methods are well under way.

It appears that almost no company is doing direct mail specifically to drive Web traffic. Acxiom/Direct Media’s Brady says direct marketers are doing a “half-way decent job” of including URLs on mail pieces “but they’re not played up as big as they might be. On each page of a catalog they have the toll-free number but not the Web site address.”

As for TV, MasterCard and Excite began airing spots to promote Internet commerce and he Excite Shopping Channel, on the final Seinfield episode. NBC has just launched a commerce section of its site called GiftSeeker (www.nbc.com/giftseeker) that allows marketers to advertise both online and on TV. Amazon.com, Cyberian Outpost, Service Merchandise, iMall.com, SportSite.com and Land’s End are taking up the opportunity for the Father’s Day season.

Deal-a-Day (www.dealaday.com). His business, a sort of Filene’s Basement of the Web, is now growing steadily and is on target to earn $250,000 in its first year.

Mufson knows that the “Build it and they will come” philosophy from a few years ago is just a fond memory. He has to work at drawing traffic to his site. But finding out what’s working and the right mix-ah, there’s the rub.

He’s not alone. Now that everyone and their mother has a Web site, the problem is getting people to visit. “Going beyond the banner” has been a rallying cry for some time. A consensus seems to be building that the Internet is made for integrated marketing-in the sense that the new medium has hidden crevices unique to it. This means trying out various approaches, from so-called guerrilla marketing to partnering with other marketers to, yes, using banner ads.

“We advise people to take a more holistic view of it,” says Patrick O’Flaherty, design director for eCentric Consulting (www.ecentric.com), New York, which develops transactional and e-commerce sites. “You have to think from the bottom to the high end, from getting the right URL to doing deals with other sites to sometimes building temporary Web sites. A lot of times people think of banners but not the other stuff.”

Paul Graham, president of Viaweb Inc. (www.viaweb.com)-the Cambridge, MA-based online-store hosting company that was bought last month by Yahoo! Inc.-says marketers should approach a plan in this order: Get indexed with search engines. Watch which words are bringing surfers to the site (assuming the marketer’s software can do that). Then buy ads on the search engine sites geared to those words (for example, Viaweb has bought “shopping cart software”). Expand into affiliate programs. Use e-mail lists. Then maybe try some offline media, such as print ads or radio.

So what’s working?

The age-old question-Are banner ads branding or direct marketing?-seems to have been answered in favor of the former. Click-through rates have dropped from a high of 4% a few years ago to less than 1% today. The Web is awash in banners now; they’ve lost their novelty. Most importantly, marketers report poor results from them.

But banners can be an effective way to respond to last-minute developments. Last summer, on the night Mike Tyson infamously chomped at Evander Holyfield’s ear, EyeScream Interactive (www.eyescream.com) whipped up a related banner for an online computer seller (“Cyberian Outpost takes a bite out of computer prices”) and had it on 200 sites by 8 a.m. Pacific time. The ad garnered a 14% click-through. “The best online advertising takes advantage of the time element,” O’Flaherty says. “You need the flexibility, the ability to react to opportunities.”

Another successful and related exception to the banner doldrums is the banner’s use for special occasions. Service Merchandise enjoyed great success with this year’s Mother’s Day campaign, says Larry Weissman, president of Paradigm Interactive, Atlanta, its Web advertising company (www.paradigminteractive.com). Weissman is pushing the concept one step further with banking client Crestar by creating the event, a day at the ballpark centering on Baltimore Oriole Cal Ripken Jr. The campaign began in April and included billboard and radio ads, in addition to banners.

A more targeted way of using banners is to pay to have them appear with a search result at a search engine when consumers use certain keywords. Buying a keyword is more expensive than placing ads randomly around a site (“run-of-site ads,” in the lingo)-about 5 cents to 7 cents per impression as opposed to 2 cents-but well worth it. Unfortunately, the more popular words (“host,” “hosting,” “apartments,” “automotive”) are selling out.

Experts advise marketers to buy words that people use when in a purchasing mood, not when they’re simply looking for information. The more specific (or obscure) the word, the better. For instance, one of Viaweb’s clients, VitaNet Nutritional Products, knows that in one six-month period on Yahoo! the search term “norandrostenedione” (don’t ask) brought in $2.38 per visitor compared with only 10 cents per visitor for “perspiration.”

Deal-a-Day bought “clothing” and some other words on Yahoo! but was disappointed in the small conversion on its 2% click-throughs. Mufson then tried opt-in e-mail lists from NetCreations Inc. (www.netcreations.com), a New York outfit. The first day he had 500 people sign up for his free “preferred customer” program, which now has about 4,000 members.

Indeed, e-mail as a marketing tool continues to grow in popularity, becoming the preferred “push” technology. A consumer who has opted in to an e-mail list is akin to a pre-qualified lead. And even better, marketers can up the ante by embedding a direct link to their site in the message for instant conversion. Anders Ekman, president of Boston DM agency Berenson, Isham & Partners, says that response rates from opt-in e-mail are generally twice those of banner ads. Regina Brady, leader of Acxiom/Direct Media Inc.’s Interactive Group (www.directmedia.com), says she sees click-throughs of 20% on her company’s e-mail marketing program, E-Mail Campaign Management.

There are several ways to get e-mail addresses. NetCreations has about 1.2 million unique names available. Promotional companies like CyberGold (www.cybergold.com), MyPoints (www. mypoints.com), Intellipost (www.intellipost.com) and Yoyodyne (www.yoyo.com) also gather addresses. Some content sites rent out their lists. And, of course, marketers can collect addresses at their own site.

The biggest trend in Web marketing, especially for large merchants, is to seal alliances-often called distribution deals-with “portals.” Portals are major sites that surfers go to when first hopping on the Internet. The top nine portals, according to Cambridge, MA-based Forrester Research Inc. (www.forrester.com), are AltaVista, America Online, Excite, Infoseek, Lycos, Microsoft, Netscape, Snap and Yahoo!. Forrester’s survey of 51 content sites indicates that 31% of their traffic comes from distribution partners. An example of a distribution deal is the $50 million Cendant Corp. paid for a chunk of real estate on AOL.

But the worth of these deals is hotly debated. Forrester has found that the top nine portals get only 15% of the traffic and well over half of that is from Yahoo! and AOL. More surprising, that share hasn’t changed from a year and a half ago. Forrester predicts that portals will go from 15% to 20% of total page views by 2002, but will drop from 59% of ad dollars to 30%.

“There’s been a belief that portals are capturing a large share of Internet traffic but that’s not the case,” says Chris Charron, an analyst in Forrester’s media and technologies group. “The Internet will be more diffuse than any other media.”

Charron says the solution to the fractured Web problem will be affiliate marketing, also called syndicated selling: putting points of sale all over the Web. For example, online bookseller Amazon.com has affiliate relationships with tens of thousands of sites. If a content site discusses a certain book, it places a link to Amazon so the surfer can immediately buy that book. Acxiom/Direct Media puts banners around the Web for its CatalogLink (cataloglink.com) service and splits the 50 cents it gets for each click from its catalog partners with the referring Web site.

Companies looking to aid in these syndications (for a price) are cropping up. They include Impulse! Buy Network (www. impulsebuy.net), BeFree (www. befree.com) and LinkShare Network (www.linkshare.com). LinkShare acts as a kind of broker, where content providers (currently 6,000) announce their availability for such deals to transactional sites (now over 140).

Most of these affiliations are done through revenue-sharing deals and can be expensive for the merchants. But as Viaweb’s Graham points out, once a marketer grabs a customer through one of its partners, the customer will come directly to that marketer’s site the next time-and (one hopes) the next time and the next time-at no cost.

“Give a big percentage-as much as you can,” Graham advises. “At this stage you want to grow your customer base.” And, as eCentric’s O’Flaherty points out, “Affiliations aren’t just driving traffic, you’re actually making sales.”

Elaine Rubin, president of consultancy E.K. Rubin Inc., Syosset, NY, says that such affiliations can be part of a guerrilla marketing campaign. The Web is rife with cheap or free ways of marketing, such as building communities, using Usenet groups, linking to sites with similar demographics and getting placed high on search engines. (For more on ways to effectively utilize search engines, see the Interactive section in next month’s issue of DIRECT.)

Finally, there are offline media, such as mail, print, radio and TV. Internet marketers used to believe it was foolish to advertise in the real world, but that thinking is changing. Internet users, they’ve discovered, are also real people who watch television and read magazines. Some think radio works better than TV because people listen to the radio while they work at their computers (BarnesandNoble.com, for one, runs radio ads). Internet marketing experts agree that offline media should be used only after online efforts are well under way.

It appears that almost no company is doing direct mail specifically to drive Web traffic. Acxiom/Direct Media’s Brady says direct marketers are doing a “halfway decent job” of including URLs on mail pieces “but they’re not played up as big as they might be. On each page of a catalog they have the toll-free number but not the Web site address.”

As for TV, MasterCard and Excite began airing spots on the final “Seinfeld” episode to promote Internet commerce and the Excite Shopping Channel. NBC has launched a commerce section of its site called GiftSeeker (www.nbc.com/giftseeker) that lets marketers advertise both online and on TV. Amazon.com, Cyberian Outpost, Service Merchandise, iMall.com, SportSite.com and Lands’ End took up the opportunity for the Father’s Day season.