Distributed Generation Can Fuel Local Economic Growth

December 12, 2013

“Buy Local” marketing campaigns have long been a popular – and effective – way to spur economic growth within local communities. Such programs redirect consumer spending to independent businesses closer to home. Not only does this added spending increase local sales, but it fuels greater economic activity in general as the money is more likely to be re-spent locally on other goods and services. Traditionally, such campaigns have focused on boosting sales for local farmers and artisans. They have also been used to reinvigorate downtown shopping districts, helping local merchants retain customers against encroachment by big box retailers.

Distributed Energy Generation Creates Disposable Income

Perhaps not surprisingly, there has historically been little economic incentive to promote locally-generated energy as part of these campaigns since traditionally there has not been a more local alternative to energy provided by large national companies. Today, however, distributed generation energy (DEG) has the potential to fuel greater local economic activity by putting more disposable income (or profits) in the hands of local homeowners, businesses and investors that can be spent locally.

DEG systems – fueled by solar, wind, natural gas and other energy sources – are readily available for homeowners and business to install directly. Consumers can also partner with a full service provider such as SolarCity to finance, install and maintain such systems. By deploying DEG, homeowners and businesses typically reduce their overall energy costs as well as the variability in energy pricing. Renewable DEG has the added benefit of lowering ongoing cash outlays for fossil fuels. Moreover, local DEG owners can generate incremental income by selling excess power back to the utility – or perhaps longer term to neighbors through contracts negotiated directly or brokered through the utility.

DEG Provides an Attractive Investment Opportunity

DEG systems can also provide an attractive investment opportunity for investors looking to generate moderate returns at relatively low risk. Local economies can benefit by providing a way for locals to generate an attractive return on their money – especially in this low interest rate environment – while accelerating the deployment of DEG within their communities.

Investment vehicles have emerged to facilitate this. For example, Mosaic allows qualified investors to invest smaller amounts (minimum $25) in rooftop solar energy projects. This past week, SolarCity announced that it has completed the industry’s first securitization of large scale distributed solar energy assets valued at nearly $55 million.

Market Conditions Are Increasingly Favorable

Market conditions are increasingly favorable to scaling DEG. Just this past week, the Federal Energy Regulatory Commission announced new standards that make it much easier for small scale (<20 megawatts), renewable DEG including rooftop solar and wind to connect to the grid. Furthermore, installation costs are coming down rapidly as conversion efficiency increases and manufacturing costs fall which is accelerating adoption. Small solar PV power capacity, for example, is expected to double within the next two years.

Rapid growth in DEG is, of course, disrupting the traditional utility model. Yet, many utilities and regulators are moving aggressively to adapt to the changing competitive environment. Duke Power, for example, is increasingly focused on providing grid services like battery storage needed to ensure grid stability as more wind and solar power capacity comes online. Meanwhile utilities American Electric Power, MidAmerican Energy and others are backing new transmission capacity to bring wind power from the Texas Panhandle to major cities. Finally, regulators like the Arizona Corporate Commission are making accommodation for utilities to ensure that they get cost recovery for transmission investment and maintenance.

Distributed generation is growing rapidly and can provide a big boost to a local economy. Community leaders should take advantage of this by promoting its expansion – and motivate local consumers to buy home-grown energy. A “Buy Local” marketing campaign may be the perfect way to encourage just that.


Pay-As-You-Go Pays for the Environment

December 23, 2010

Pay-as-you-go (PAYG) is emerging as a winning consumption model for the environment. It does so in two ways. First, by charging for incremental use, PAYG discourages overconsumption often associated with flat rate pricing. Second, it incentivizes shared use of resources during peak periods in order to avoid excess investments in capacity that would otherwise be underutilized for much of the time.

In recent years, several PAYG models have emerged that are having a positive impact on the environment. For example, smart grid initiatives provide consumers with tiered pricing models that incentivize them to reduce or shift energy use during peak periods. Additionally, PAYG models in cloud computing allow consumers the flexibility to add computing capacity in real-time, while avoiding the need to overinvest in server capacity utilized only during peak periods.

This month, another consumption model got a big boost when the California Insurance Commission approved the launch of PAYG car insurance in the country’s largest car market. Beginning in February, 2011, California residents will be able to purchase insurance from State Farm and the Automobile Club of Southern California and pay based on how much – and how safely – they drive. The less they drive, the less they pay.

Such a model is enabled through the tracking of personal driving data. Consumers self-report miles driven (and validate periodically through inspection) or do so automatically through an active OnStar system or small telematics device that plugs into a diagnostic port under the dashboard. Insurance companies then effectively create personalized rates based on actual car use.

Potential benefits for the environment from PAYG are significant: The State of California estimates that subscribers may reduce miles driven by 10% or more, saving consumers money while reducing accidents, congestion and air pollution.

A wide variety of companies are now in a position to consider testing PAYG models with their customers, especially those that are price sensitive, tend to use a product less than the average or demand additional services during peak periods. While consumers may focus on saving money, the real benefits may be saved for the environment.


Rise of the Peer-To-Peer Green Economy

November 21, 2010

One could argue that the green revolution really took root online with the launch of eBay. Or perhaps Craigslist. Connecting individual sellers with millions of potential buyers brought the neighborhood garage sale (or local classifieds) to the masses, and with it, the ability to extend the product lifecycle of used, yet still useful, products. As Amy Skoczlas Cole from eBay said, “The greenest product is the one that already exists.”

Such peer-to-peer ‘connective’ consumption has long existed offline. Online models like eBay connect individuals at massive scale, while overcoming transaction barriers through the use of seller reviews as well as secure payment mechanisms like PayPal.

Such models challenge the notion of permanent ownership, and with it the environmental impact that it brings. Instead, ownership is viewed as a temporary or altogether unnecessary condition required for realizing product benefits. Products such as cars, beds, clothes, lawnmowers and drills often lay idle and available for use if only those that are in need connect with those that have. Collectively, many have dubbed such transactions ‘collaborative’ consumption because they require the involvement of a community network to make them liquid.

Today, there are at least three peer-to-peer (P2P) models emerging that can facilitate greener transactions:

Rent. Today, there are many businesses that rent, instead of sell, products to consumers including Netflix, Zipcar and RentTheRunway to name a few. Shared products have a lower environmental footprint, of course, requiring fewer products overall to be produced to meet demand.

Recently, P2P models have emerged that allow consumers to rent products that they own including a spare bed (CouchSurfing), car (Spride, Getaround), even a wedding dress (Zilok). Such models leverage social networks to provide reviews and referrals for products and participants, as well as mobile apps that take advantage of location-based capabilities.

Exchange. Increasingly, consumers can facilitate the exchange of goods through trading, bartering or gifting. Such transactions reduce demand for new products by extending the lifecycle of existing ones. Such models provide a more flexible and open ended way to facilitate exchanges than with money. For example, FreeCycle users to make products available free-of-charge to those that are want to take them. In contrast, ThredUp facilitates the exchange of children’s clothes between peers but expects participants first to give clothes to a member in the community before accepting clothing in return. Similarly, Swap enables members to exchange books, CDs, movies and video games. What you can get depends on whether others want what you have to give.

Use Virtual Currency. Consumers can facilitate transactions through the use of virtual currencies that provide many of the benefits of a legal tender – the ability to accumulate, bank and borrow – without actually having to be legal tender. Such currencies work well in networked communities that rely on shared services to deliver a product or service. The Superfluid, for example, is a collaborative social network in which members conduct peer-to-peer transactions by exchanging “favors” for virtual currency. Here, a marketplace has been established where by individuals offer their services (say, web development) in exchange for Quids and then, in turn, spend Quids on services that they need (copy writing).

Certainly, there is the potential to leverage such networks in the green space. Perhaps Quids could be exchanged for environmental services such as conducting a home energy audit or preparing a social corporate responsibility report for a small business.

For consumers, such peer-to-peer transactions are a natural evolution of social networks. Such transactions will continue to grow as mechanisms for transacting become more seamless and consumers become accustomed to more unconventional methods of exchange.

Marketers will be challenged to participate in a meaningful way in such peer-to-peer transactions. Some like eBay and Zilok make it easy by allowing both individuals and businesses to facilitate exchanges. Alternatively, advertising on the largest exchange sites is certainly an option. This is particularly opportunistic for brands naturally aligned with such models including shipping companies, for example. Additionally, businesses should take advantage of such exchanges to launch new offerings such as pay-by-the-day insurance for those that seek to rent a peer’s car, for example. New models that reduce consumption are not necessarily bad for business – they are simply unleashing new opportunities for companies that can play a role in their facilitation.


Driving Adoption of Renewable Energy: Part II – An Energy Marketer’s Perspective

September 1, 2008

Interview with Adam Capage, Director, Utility Partnerships, 3Degrees

 

With the #1 renewable energy program in the US, the City of Palo Alto Utilities (CPAU) must be doing something right.  In fact, despite a formidable price hurdle, CPAU has managed to sign up over 20% of Palo Alto residents for clean energy, and is not finished yet.

 

Notably, when CPAU decided to aggressively market renewable energy to its customers, it decided to reach beyond traditional utility circles to engage the right marketing partner.  For that, CPAU turned to 3Degrees to educate consumers and convert them to clean energy.

 

Recently, I had the opportunity to talk with Adam Capage, Director of Utility Partnerships at 3Degrees.  We spoke of the challenges that marketers face when trying to shift consumers to renewable energy, the approach that 3Degrees takes and reasons why it has been so successful.  Here are his words:

 

MG: How do you partner with utilities?

 

AC: Essentially, we partner with utilities by leveraging their brand and their customer connections [and combine it] with our knowledge of how to talk to people about why they’d want to support renewable energy. 

 

The Palo Alto partnership was [our] first utility partnership [formed] in 2003.  When we partnered with Palo Alto, they had already had a green program operating for three years and it had not yet reached 1% participation. 

 

In many ways Palo Alto had the ideal demographics for marketing this product.  And so it’s very tempting to just think “Well hey, its Palo Alto, of course they’re at 20%”.  But, the product did exist for three years [before involvement by 3Degrees] without hitting 1%.  So, it’s a combination.  Yes, demographics are key.  But, you do have to talk to [consumers] repeatedly and get the messages out there and that’s what we’ve been focusing on. 

 

Since 2003, the participation rate has basically sloped upward the whole time.  Today, we’re actually over 20% now and we haven’t seen any slowing.  We keep kind of wondering if and when it will slow, but it hasn’t. 

 

Traditional thought was that there was low hanging fruit [to acquire] and then it would get harder to acquire people over time.  Instead, it seems that you can create new low hanging fruit.  As you talk to people, you make [renewable] an accessible, appealing product to new groups.  Another possibility is just that Palo Alto has such a huge percentage of their population with [the] perfect demographics [for purchasing renewable energy] that you can get an incredibly high penetration rate.

 

MG: Do you tailor your message to particular subgroups within the city?

 

AC:  No.  The real challenge is that renewable energy requires people to pay a premium and they have absolutely nothing [tangible] to show for it.  People for a long time tried to compare this to organic food or bottled water or other premium product.  And, you just can’t do that because with bottled water people think they’re getting [a personal benefit like] cleaner water.  With organic food they might be stopping themselves from having pesticides.  [Unlike with renewable energy], it’s not just about the public good.

 

[Marketing clean energy] is like a request for people to make a private contribution to a public good.  And that’s just damn hard. 

 

I think that the best parallel is public radio and TV knowing that people understand that the programs are very likely to continue whether or not they pay up, but they do it anyway.  With renewable energy we need to put a line item on the bill that says you pay more.  It’s very hard to make people get connected to what they’ve done.  So we try but you know we can’t be in the home everyday like public radio or TV. 

 

We focus on a message that you can make a difference and there are specific environmental benefits to purchasing renewable energy.  We link [environmental benefits] to specific energy usage and [provide] examples of benefits that are local.  And then we repeatedly try to get that message out there.

 

MG: Do you focus your message on awareness or consideration for purchase?

 

AC: When we start each [partnership], it is like going back to 2003 in Palo Alto; you start from ground zero.  It’s a cluttered market and it’s hard to break through so awareness is definitely our first battle.  

 

With Palo Alto I think that awareness has come a very long way.  I don’t think they’ve done research recently, but I bet it’s pretty high  so now we’ve got messages that simply say “just do it”.

 

MG:  What is average price premium for renewable energy?

 

AC:  It varies quite a bit around the country based on the premium for clean energy, current electricity rates and the amount of energy that is consumed.

 

In California the average household uses something like 500 or 600 kilowatt hours a month, where as we have a partner, Amerin, that is based in St. Louis.  Its Missouri customers use on average 1,000 kilowatt hours a month.

 

The premium for Palo Alto [residents] that convert [to renewable energy] is going to be between $5 and $7 per month I think.  For our partnership in Amerin, it’s closer to $15 per month on average. 

 

MG:  Aren’t renewable energy prices independent of oil price shifts?

 

AC:  The programs aren’t designed that way.  A few [utility tariffs] in the country are actually designed where the renewable energy price is essentially substituted on people’s bills for their traditional fuel.  Those programs have seen great success.   Everyone understands why they’ve seen [success] as they have a whole new message to talk about: price stability because [the price of] renewables never change.

 

Most programs are designed where the renewable energy premium is on top of what they already pay.  So the thinking [by consumers] is renewable energy is more expensive.  You aren’t actually getting the electricity from [specific] wind turbines anyway.  What your dollars are doing is allowing the utility make more investments in putting renewable energy into the overall mix.

 

Hence the public good part: your electricity comes on just like everybody else’s except you pay more.

 

MG: Are you actually paying for 100% equivalent renewable energy?

 

AC:  Yes.  Not every program in the country is designed the same. But, our five partnerships are all 100% usage.

 

MG: What are the key customer insights for purchase of renewable energy?

 

AC:  A few people talk about new technology and want to support it.  A few people talk about fuel prices going through the roof and we are beholden to the Middle East, so they want to support another source. But the majority just says “I want to make a difference”.  It seems like one small step, one small opportunity for [consumers] to do that.

 

MG:  Can the success of Palo Alto be replicated across the country or is this an anomaly?

 

AC:  20% might be an anomaly but I know that, in general, these [renewable energy] programs are underperforming.  We have five like I said.  One of them just started and so it only has a couple tenths of a percent participation.  But all together our five average 7.8% participation.  The industry average is 1.8%.  You can do this better.

 

MG:  What’s the secret?

 

AC:  I think that the partnership model is a really good one.  The utility has the customer’s eyes and contacts and, in most cases, the customer’s trust.  That is certainly true in Palo Alto.

 

3Degrees brings the messaging and dedication to execution.  The single best thing we’ve found is that you collect information about what channels and messages are working well and you just execute again and again and again and again. 

 

That’s not what utilities do; they are not marketing organizations.  We do the marketing behind their brand and no one ever knows our name.  We want it that way.

 

MG:  Do you think that the social narrative has changed given Al Gore’s movie a few years ago and just the growing reality and awareness of global warming?  Has that context enabled you to move the needle further?

 

AC:  It definitely helps.  We were out in front of movie theaters when Al Gore’s movie was released.  We set up tables outside to intercept people came out of the movie.

 

MG:  When you target utility customers, what kind of marketing campaign do you implement?

 

AC:  The campaign is continuous.  Email, bill insert, direct mail, events.  We’re spending money and testing different channels all the time except TV.

 

Yard signs are also used to bring to peoples’ attention that their neighbors have done this.  We get requests [for signs] saying I want to show people that I did this.

 

MG: Were there other ways that you tapped viral marketing or activated influencers?

 

AC:  We did holiday card campaign where we sent all Palo Alto participants a card that they could send to their friends saying “I participated in Palo Alto Green and you can too”.

 

We offer wind tours where we let participants come and then, hopefully, tell other people about going to a wind farm and seeing what their money is supporting. 


Driving Adoption of Renewable Energy: Part I – A Utility’s Perspective

August 31, 2008

Interview with Tom Auzenne, Assistant Director, City of Palo Alto Utilities

 

Electrical power generation accounts for 40% of total annual greenhouse gas emissions (GHG) in the US.  Such a high concentration of GHGs is due to our reliance on highly polluting fossil fuels, especially domestic coal.  Yet, while the popular press focuses on the recent growth in renewable energy, it still provides only 2% of our total electrical needs today. 

 

Until recently, many arguments have been made for why adoption of clean energy remains slow.  Certainty, price ranks as the #1 barrier to broader adoption.  Other factors include reliability concerns and lack of education about the technologies.

 

Interestingly, Palo Alto, California has bucked this trend.  Over the course of several years, the municipal utility has partnered with 3Degrees, a utility marketing company, to encourage residents to sign up for its PaloAltoGreen program which provides 100% renewable energy from wind and solar power sources.  The results of this program have been astounding, with over 20% of all residents switching to clean energy.  Indeed, PaloAltoGreen is now ranked as the #1 green energy program nationwide based on participation.  

  

What does this mean for GHG reduction?  Well, it is quite simple: the purchase of 41.5M kWh of renewable energy translates into a reduction of 350,000 tons of carbon dioxide annually.

 

Recently, I had the opportunity to speak independently with both Tom Auzenne from the City of Palo Alto Utilities. We spoke about consumer interest in renewable energy, barriers for greater adoption by consumers and key reasons for this program’s success.  Here is what Tom Auzenne had to say:

MG: Who purchases renewable energy in Palo Alto?  What is the mix between residential, commercial and governmental entities?

 

TA: PaloAltoGreen (PAG) is the City of Palo Alto’s 100% renewable energy optional program open to all residential and commercial customers with an active electric service provide by the City of Palo Alto Utilities. The program has about 20% of the customers involved, with residential customers making up on average 95% of the mix and the commercial customers at 5%. Our residential sales account for roughly 60% of the program sales with commercial and governmental making up the rest. 

 

However, starting with July 2008, both the City of Palo Alto (CPA) and the Regional Water Quality Plant (RWQCP) are increasing their commitment to buy renewable energy equal to 30% of their total usage, a ten-fold leap from the previous 3% of total usage purchases.  This will increase the percentage of nonresidential customers in the program.

 

MG: Describe the demographics of your average residential customer that signs up for renewable energy?  How do they differ from the average utility customer in Palo Alto?  Across the US?

 

TA: As a general rule, the residential PAG customer is well educated, in a high income household and is environmentally progressive.  Most are thinking about their environmental impact and want to do something about it.

 

One of the primary differences from other green pricing program around the country is that PAG customers generally use less energy per month than our average customer.  PAG customers use 400-600 kilowatt hours (kWh) per month compared to the national average of about 888 kWh (according to the DOE).  This indicates that our customers may also be trying to reduce their electricity usage through energy efficiency or other measures.

 

MG: What motivates residents of Palo Alto to switch to renewable energy (e.g., attitude toward the environment, concern for their kids, financial incentives, community empowerment, etc.)?  Are their attitudes substantially different than the rest of Americas?  If so, in what ways?

 

TA: There are many motivations leading to program participation. These include being role models for the next generation, “doing the right thing” for the environment, and buying renewables as a logical next step after energy efficiency.

 

CPAU strives to communicate the environmental benefits of renewable energy to Palo Altans in as many ways as possible. Combine this near constant communication with high community awareness of the issues surrounding climate change, and you have the combination that brought PAG such success.
 
  
We also work closely with the Palo Alto Unified School District on energy and curriculum.  Many customers not participating in PAG have taken a more direct approach, and have installed their own photovoltaic (PV) systems rather than buy renewable energy from the market. Between January 2007 and March 2008, 92 PV systems were installed in Palo Alto, representing 250 kW of generation.

 

MG: What, if any, is the premium charged for purchasing renewable energy (vs. non-renewable) today?  What factors do you attribute to a customer’s willingness to pay such a premium (e.g., level of affluence, attitude regarding the environment, etc)?  Do you think renewable energy will be adopted by a majority of customers without eliminating the premium altogether?

 

TA: Residential and small commercial customers can enroll in PAG for 100% of their monthly electric usage at a premium of 1.5 cents/kWh. Large commercial and industrial customers can buy renewable energy in blocks of 1,000 kWh for $15 per block. This allows them to support renewable energy at a level that makes business sense.

 

One of the nice things about PAG is that the price doesn’t fluctuate. CPAU hasn’t changed the price for 100% renewable energy in five years and has no plans to do so. The demographics of Palo Alto are also great for marketing renewable energy, as our customers tend to be interested in the environment and can have a level of disposable income that allows a lower barrier to participation.  

 

MG: A 20% adoption rate for renewable energy is impressive.  Can this success be replicated across the country?  If so, what will it take to do so?  If not, what are the obstacles (e.g., low awareness, lack of urgency, difficult process to switch, price premium, etc.)?   

 

TA: With the continuous support of our local elected officials on the City Council, the staff of the City government, the employees of the Utilities Department, and, of course, our great customers, nearly everyone is behind this program. This type of support is vital to the success of a green pricing program in Palo Alto and elsewhere in the country.

 

Other factors that need to be in-place, or created, include customer awareness of the environment, a history of energy efficiency, an active partnership with the schools and students, and a willingness to lead.

 

It should be noted that not all the program participants have vast disposable incomes. Participants are both young and old, in the prime of their earning years or on fixed incomes, have children or are childless. All share, however, the same vision of, and desire for, a sustainable future.

 

MG: What are your primary marketing objectives in the residential and commercial markets?  Do you find the need to spend significant time building awareness of either the category or the technology?

 

TA: CPAU has found that targeted messaging, repetition, clear information about the product and a call to action (“closing the sale”) bring results. If the job is done correctly, then customers are aware.

 

For those customers that have more questions, we have many ways for them to find answers to any question that they might have.

 

MG: Is there any skepticism on the part of consumers regarding the (reduced) impact that renewable energy has on the environment? 

 

TA: There are always skeptics, but we focus on educating consumers on the positive aspects of the renewable energy we provide.  With the melting of the North Pole ice and the retreating of the Swiss glaciers, featured on the Evening News, skepticism has been reduced or eliminated.

 

MG: Please describe how you partner with 3Degrees in terms of your marketing efforts.  What are the core components of these marketing efforts?  What made them so successful?

 

TA: 3Degrees specializes in marketing renewable energy. They have partnerships with utilities in California and around the country. They are able draw on their experience and accumulated data to provide targeted marketing and program management support.

 

CPAU brings its knowledge, reputation and trust of the community to this partnership to help sharpen the marketing even more. With their experience and our community awareness, we have created one of the most effective, and successfully marketed, green power programs in the country.


Eco-labels Impact Consumer Behavior

May 24, 2008

Eco-labels influence consumer behavior in two ways.  First, they introduce green as a considered attribute at the point of sale.  Second, they enable consumers to comparison shop based on green.  Over the past few years, there have been many new eco-labels launched by governments, manufacturers and retailers.  Many of these labels are listed on Consumer Reports’ Greener Choices site.

Interestingly, the Natural Marketing Institute’s 2007 LOHAS Consumer Trends Database report determined that not all eco-labels have the same impact.  In fact, consumers indicate that they are more likely to make eco-friendly purchase decisions if the eco-labels are also widely recognized and trusted brands in of themselves.  Familiar labels for programs like the EPA’s Energy Star have a more significant influence on consumer behavior than others. 

While such a finding reinforces the value of eco-labels, it does challenge the notion that CPG companies and retailers should necessarily launch proprietary labels to differentiate themselves on green.

Like all brands, eco-labels take significant time and resources to build.  Moreover, given the sensitivities regarding greenwashing, for-profit entities may have to overcome a higher hurdle than government or a non-profit organization given the appearance of conflict if proprietary labels adorn their own products.

 

As such, Marketing Green recommends that product companies and retailers focus on disclosing product information about environmental impact to differentiate themselves in the market rather than trying to define new green labels.  Disclosures provide consumers with information that can inform purchase decisions rather than certify a product’s greenness.  This is what HP has done with its launch of Eco Highlights labels on its products.   

Marketing Green also recommends that retailers simultaneously push for industry-wide labels.  While some retailers may consider proprietary labels as a competitive differentiator, it is likely that broadly recognized labels will accelerate consumer adoption while reduce the cost to support them. 

 

Moreover, retailers should differentiate themselves by sourcing more green products.  Arguably, this is one of Wal-Mart’s strategic priorities today.  Greater variety combined with recognized eco-labels will likely drive more sales as well as consumer loyalty.  In the end, this approach is likely to have more impact for both business and the environment.


Shifting from Product Placement to Engagement in Green

April 13, 2008

For decades, marketers have leveraged product placement to influence consumers.  The idea is quite simple: leverage media to showcase a product or service being used as part of everyday life in order to shape consumer brand perception and impact purchase behavior.  Put a product in the hands of a celebrity and consumers will interpret this as a de facto endorsement.  Such placements have been embedded across all types of media including television, film, video games, books and music videos.

 

The digital channel has upended this traditional approach by enabling marketers to go well beyond simple product placements to create meaningful experiences for engagement.  Not only does such an approach promise to yield greater brand impact, but it may also drive significant sales as well.  Here are a few examples:

 

Digital Video Recorders (DVRs): Early last year, GE launched its latest ecomagination campaign.  To counter growing consumer use of DVRs to bypass commercials, GE provided an added incentive for consumers to watch: embedded content in the commercial itself that required a DVR to access it. 

 

Called One Second Theater, this “commercial within a commercial” provided a duel advantage for an advertiser: not only did consumers view commercials that they would have otherwise skipped, but they also engaged with added brand content as well.  Moreover, as one of the first to use this tactic, GE benefited from the novelty factor as for many consumers this was likely their first experience with embedded content in a TV commercial.

 

Screenshot from GE’s One Second Theater

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Mobile Phones:  Mobile applications are emerging to enable consumers to access web content via their phones through scannable bar codes associated with hyperlinks to the web.

 

Scannable 2D Bar Code with Hyperlink to Website

thinkmobi2.gif

Source: thinkmobi

Semapedia 2D Bar Code Hyperlink to Green Maps, an Open Source Location-based Search Engine
greenmaps.gif

 

Such applications enable consumers to use their mobile phones to access content on-demand from anywhere a bar code is posted.  This capability is just emerging in the US; it is likely to take another year or so until all mobile phones are enabled to scan and interpret these bar codes.  Nonetheless, there are many applications emerging for green marketers using 2D bar code technology:

 

For example, tags can be embedded at the point of sale to provide links to additional product information including its environmental footprint.  Moreover, they could also be embedded directly on products.  With such bar codes, friends that ask “where did you get that?” can easily link to a site to make a purchase or locate the nearest retailer to do so.  Alternatively, such tags can provide additional information specific to a location. 

 

Video: Video applications are emerging that enable embedded objects clickable and associated with added content or a call to action. 

 

Screenshots from Videos Posted on VideoClix

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videoclix_yosemite.gif

Such product-linking, or plinking, provide significant opportunities for both advertisers and consumers:  not only does it provide a more compelling content experience, but it also provides a more relevant experience as the embedded advertisements directly relate to the video content itself.  Moreover, it eliminates the need for consumers to view pre-roll commercials, a barrier for many users to watch the video in the first place. 

 

 


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