Today’s News
Bidding wars break out over multifamily homes
By Jennifer Athas
A combination of factors is creating a demand for multifamily properties in the Hub, leading to stiff competition among bidders.
Three categories of buyers are now targeting smaller multifamily properties: contractors that renovate the properties into condominiums, investors and owner-occupants.
Driving the trend are a rebounding housing market, low interest rates and resilient rents in Greater Boston.
According to data from MLS Property Information Network, there are currently 210 multifamily properties on the market in Boston and 20 percent have active offers on them.
During the past month, 61 multifamily units sold and 191 went under contract, while multifamily inventory in Boston is down 18 percent from the same time last year.
Properties with four units or less have features that can be particularly attractive to investors as well as home buyers, or owner-occupants, looking to live in the property — including the fact that they still qualify for long-term mortgages up to 30 years.
But given the low inventory of available properties, owner-occupants are having a difficult time competing against cash offers typically submitted by contractors or investors, who plan on holding the property and renting out the units.
Enda Madigan, owner of Madigan Construction, has been a builder for 20 years, but has been doing condo conversions for the past 10 years.
“An owner-occupant bidder can sometime drive up the price, when bidding on a smaller size multifamily property,” Madigan said.
Contractors who renovate and convert these smaller multifamily properties into condos have a short time-frame and tight margins for the purchase to be profitable.
“Many times the property is more valuable to the owner-occupant buyer, because they will be holding the property for a long time-frame and benefiting from cash flow as well as equity appreciation,” Madigan said.
“We started our search with the intent of buying a two-family home as owner-occupants and we were either too late with our offer, outbid on price or our offer was beat out by a cash buyer,” said second-time home buyer Benjamin Flynn. “Frustrated with the process, we turned our search to a single-family home and now have one under contract.”
Flynn and his wife have a nice down payment and a well-documented work history.
“We never thought we’d find the competition so tough, and we were also willing to do some improvements to the property,” he said.
This past weekend a three-family on 442 East 6th St. in South Boston went on the market for $799,900. Each unit had two bedrooms, a full bath and a rear deck. The building had a total of 3,336 square feet, with street parking. Forty buyers came in over the weekend, and over 10 offers were submitted. At the end of the weekend, an offer was accepted by the seller. The list price started out at $799,900, but then was raised to $849,900 due to the multiple offers.
The property was sold to a cash buyer and will close in the next two months.
Copyright doubts still pinned to Pinterest despite changes
By Marie Szaniszlo
Little more than two months after concerns about copyright infringement arose, Pinterest announced it is introducing a new feature to credit photographers, artists and creators of other content its users “pin” on the virtual scrapbook, but legal experts were divided yesterday about whether that is enough to protect the website from liability.
The new feature ensures that content from Flickr, Behance, Vimeo and YouTube receives clear attribution under the description of each pin, even if it’s taken from a third-party site, Pinterest said in a statement. The attribution cannot be edited and includes a permanent link to the work, its creator and where the content is hosted.
But Martin O’Donnell, a Boston attorney specializing in copyright law, said merely crediting the creator is not enough.
“If they are aware the work is the property of someone else, they have no right to publicly display it without the owner’s permission, regardless of whether they attribute it,” O’Donnell said.
Jack Lerner, a University of Southern California professor specializing in Internet law, said he does not believe the website, which boasts nearly 19 million unique visitors per month, should be liable if it complies with all of the requirements of the 1998 Digital Millennium Copyright Act, including expeditiously taking down content once it’s notified of an infringement.
Chinese Food Company Eats English Breakfast
By LAURIE BURKITT
BEIJING—Bright Food Group Co. of China agreed to acquire a majority stake in U.K.-based cereal maker Weetabix in a deal that shifts an iconic British breakfast brand to a state-owned Chinese business and underscores the eagerness of Chinese companies to extend their influence world-wide.
Bright Food, maker of China’s White Rabbit candy, will buy 60% of Weetabix Food Co. from London-based buyout company Lion Capital, which will hold the remaining 40%, according to a Bright Food statement. Weetabix is valued at about £1.2 billion ($1.9 billion), including debt, the statement said.
The deal, expected to close in the second half of 2012, the statement said, is among the latest transactions to mark the rise of cash-rich Chinese companies as they make bold attempts to become strong players in the global market, at a time when many Western European businesses are looking for buyers amid a weak economy.
The deal would pass to China a U.K. brand that has gained world-wide recognition since 1932, when Weetabix first appeared on breakfast tables in Britain.
Weetabix’s cereal boxes essentially contain a global market-share prize for Bright Foods. The company, which sells brands such as Crunchy Bran and Weetos, is the world’s eighth-largest by market share, according to research firm Euromonitor International.
The list of well-known U.K. companies with new Chinese stakeholders appears to be lengthening. Chinese clothing company Trinity Ltd. 0891.HK +0.15% last month acquired Gieves & Hawkes, a tailor on the famed London shopping street Savile Row. Sewage-and-water company Thames Waterin January sold a 9% stake to China Investment Corp., a sovereign-wealth fund.
In the Bright Food deal, Weetabix offers the Chinese company established retail-distribution channels in major Western markets such as the U.S., Canada, Italy and Israel and will provide bargaining power to Bright Food as it seeks retail shelf space in the West, said Marcia Mogelonsky, an analyst for London-based market-research firm Mintel.
Bright Food said in its statement Thursday that the deal would allow it to expand Weetabix’s cereal offerings, including Alpen muesli, Ready Brek porridge and the U.K. company’s namesake brand, across Asia.
Weetabix Chief Executive Giles Turrell said he expects the agreement to spur growth at the U.K. company beyond its domestic market. “I believe there are also substantial opportunities to further grow the business internationally, in North America, Asia and beyond,” he said in a written statement.
Demand for cereal is mounting in China as consumers look beyond typical rice-based porridge. Sales of cereal in China jumped to 1.2 billion yuan, or roughly $191 million, in 2011, up 70% from five years earlier, according to market-research firm Euromonitor International.
Weetabix is scarcely present in China, where the market is dominated by Cereal Partners Worldwide, a joint venture between General Mills Inc. GIS -0.57% of the U.S. and Nestlé SA NESN.VX +0.45% of Switzerland, and Seamild Group of China, according to Euromonitor.
Similarly, Bright Food is virtually unknown to the West. Its web site lists its interests in food, agriculture, real estate, taxi services and tourism. Its stated mission is to build “famous brands, advanced technology, strong competitive power, and deep influence in the world by the end of 2015.”
The Chinese company’s earnings totaled $1.2 billion in 2011 on revenues of $12.2 billion.
Bright Food has been seeking overseas acquisitions in an attempt to expand its portfolio as food demand rises from China’s burgeoning middle class.
The world’s most populous country recently became the top groceries market: Chinese consumers bought $970 billion in groceries last year, compared with the U.S. total of $913.5 billion, according to U.K.-based grocery research firm IGD.
Executives of Bright Food, which operates more than 3,300 retail stores in China, set a goal in 2010 to double revenue by 2015 to roughly $14 billion and have been searching for acquisition targets among spirits, wine, sugar and dairy companies.
If it closes, the Weetabix acquisition would mark Bright Food’s first successful deal since the company acquired a 75% stake in Australia-focused Manassen Foods Australia Pty. Ltd. from Champ Private Equity in August.
Several previous attempts at deals weren’t successful. Last year, Bright Food lost to General Mills in a bid for a 50% stake in French yogurt maker Yoplait. Plans to buy British snack maker United Biscuits (Holdings) Ltd. from Blackstone Group LP and PAI Partners SAS fell apart at the end of 2010 when Bright Food turned its focus to U.S. nutritional-supplement retailer GNC Holdings Inc. That transaction also failed to materialize.
Bright Food also twice bid for the sugar division of CSR Ltd., but it lost out to Wilmar International Ltd., which secured the deal in 2010.
Mixing Marketing With Social Games and Extreme Sports
By ELIZABETH OLSON
DEGREE MEN, the deodorant by Unilever, is starting a video marketing campaign that aims to increase the brand’s interaction with its core consumers by offering content tailored to social gaming sites.
The brand is joining companies like Coca-Cola, Disney and Pinnacle Foods’ Aunt Jemima Frozen Breakfast in trying what has become known as engagement marketing. Degree Men’s video series, “Masters of Movement,” features extreme-sports figures and allows social game players who view their two-minute videos to earn points and currency that can be used in the game they are playing.
Some 95 percent of people who choose to view brand content will watch a video in its entirety and are more likely to take an action, like commenting or downloading information afterward, according to the Jun Group, a social video distribution company in New York. Social game players who watch a complete Degree Men video can also choose to go the Theadrenalist.com Web site to see additional extreme-sports videos.
Digital distribution companies offer access to huge pools of potential customers. The Jun Group says it can reach 100 million users on 400 social games. Another company, SocialVibe, which works with Zynga and other social gaming companies, last year handled 500 opt-in engagement campaigns for more than 200 brands, including Pepsi, General Electric and Disney.
SocialVibe released a study in February that found that combining brand messages and incentives increased viewer interaction by 91 percent, and brand perception by 48 percent, and improved viewer recall and intent to purchase.
The study, done with independent research company KN Dimestore, surveyed 30,000 people in mid-2011. It found that while 48 percent of survey participants may initially engage with a brand to gain an incentive, they then stay and pay attention to the brand message.
“Brand engagement tied to value-exchange leads to powerful lifts in recall, recognition, time-spent and purchase intent for brands,” said Todd Tappin, the chief executive of SocialVibe, which is in Los Angeles.
Degree Men’s campaign for its Adrenaline deodorant line, which began last week, has adopted the engagement strategy “to evoke emotion from the consumer and create a conversation,” said Cindy Gustafson, managing director at Mindshare, a GroupM company owned by WPP. Mindshare oversaw Unilever’s online distribution and helped coordinate filming of the videos.
The Master of Movement campaign’s first week produced 9.1 million video views, of which 93 percent watched a video in its entirety — a retention rate that Ms. Gustafson described as “incredible.”
Degree Men’s videos, produced by Mindshare Entertainment, seek to tie pulse-racing adventures to the deodorant line’s new MotionSense technology that responds to wearer movement by releasing bursts of fragrance to fend off sweat and odor.
“The motion sensor works when you work,” said Aaron Callaway, senior brand manager for Degree Men, whose audience is 18- to 35-year-old males.
Like other advertisers, Degree is noticing soaring views for social videos, which are defined as ads people choose to watch. In the first three months of this year, social video ads had 1.2 billion views, according to Visible Measures, an online video measurement company. There were 2.7 billion views for all of 2011, according to the company.
A Jun Group study last year, which analyzed 7.9 million social video views for a variety of brands, found that Facebook page visits, at 62 percent, were by far the most popular postvideo view response. That was followed by brand-page visits and store location searches, which together accounted for 15 percent of postview actions.
“Social games are changing the ad industry as advertisers are paying for tangible actions, like a video ad view,” said Mitchell Reichgut, the Jun Group’s chief executive.
That was the case for Aunt Jemima’s Frozen Breakfast products, which wanted to raise its profile despite a limited marketing budget. The company last year filmed workers making pancakes at its Jackson, Tenn., plant for its first social video, which drew 10.4 million views, largely by women, of which 99 percent watched the full 55-second video.
More than 70 percent of viewers redeemed a coupon, said Brandi Unchester, Pinnacle’s senior brand manager for frozen and refrigerated breakfasts.
Ms. Gustafson of Mindshare said that, on average, 30 percent of a brand’s advertising spending is allocated to digital, which includes online, social games and mobile.
Last year, the company spent $30.6 million on overall advertising for Degree Men, down from $36 million in 2010, according to Kantar Media, part of WPP.
Degree Men’s adrenaline-pumping campaign showcases feats of adventure by extreme-sports figures like the climber Bear Grylls and Miles Daisher, a so-called BASE jumper, who parachutes from fixed objects like bridges and buildings.
“We wanted to reflect some functionality of the product, to show that it lasts and performs persistently over time,” said Greg DiNoto, chief creative officer for Deutsch N.Y., part of a division of the Interpublic Group, describing the strategy behind choosing Mr. Grylls.
The star of Discovery Channel’s “Man vs. Wild” show, Mr. Grylls was selected because “he has the physicality, humor and authenticity needed,” said Mr. DiNoto. “He instantly telegraphs our idea that the product lasts, and so do you, no matter what.”
7 Rules for Responding to Customers Online
By SAM KENINGER
Sam Keninger leads product marketing at Medallia, a customer experience management company.
By now it’s clear that negative online sentiment cannot only damage a business’ reputation but also its bottom line. You don’t get many chances to address a vocal, disgruntled customer or correct a fake, perhaps competitor-generated, social media review. And silently ignoring social feedback from customers is never an option.
That said, too many companies have fallen prey to the idea that robotic responses “cover their bases.” They believe they’re on top of their social media presence because their corporate marketing department is monitoring brand references and aggregating metrics. But those actions do not focus on improving the customer experience, which is ultimately what affects a company’s revenue.
Here are seven social media management rules to prevent your employees from becoming response robots and incite them to respond in a way that boosts customer loyalty.
1. Be Timely
The right underlying technology solutions can help a company monitor what’s being said online and immediately alert property managers to a new social post. Instilling a culture of urgency among employees is important when closing the loop on social reviews. Not only is one customer watching — so is everyone else. You don’t need to respond to every post, but it’s also important to respond to both good and bad posts because it shows future customers how involved you are. For example, scathing reviews that are tempered with rational, genuine responses are much less potent in deterring future customers.
2. Don’t Auto Respond
Every response is visible in stream, and the presence of scripted responses will quickly become apparent to followers. If your responses seem automated, they won’t seem genuine and you might as well not respond.
3. Leave it to the Frontline
The employees who are closest to your customers are the best at interacting with them, either online or face-to-face. Getting your frontline of employees on board with your social media strategy invokes a strong sense of urgency to fix underlying problems. Because of social media’s transparent nature the frontline will appreciate the importance of improving the customer experience. Best Western responds to well over a third of their TripAdvisor reviews (above the industry average) to foster customer rapport.
4. Don’t Get Personal
Remember to keep your tone professional. Picking a fight online is a great way to start a PR massacre. Google Boners Barbecue if you doubt it. It may seem unfair to businesses, but the customer is always right, at least on these forums.
5. Keep Responses Short
Social media venues are built for skimming and quick conversations. The social attention span is tiny and your responses aren’t only for the initial reviewer but for future consumers. Don’t kill the mood.
6. Thank the Customer
Give credit when an issue is uncovered. Domino’s Pizza did a good job engaging customers and employees when customer comments about product quality were left on social sites. Embracing social feedback made the company look good.
7. Fix Issues
Walking the walk is crucial to the success of your customer experience management campaign and, ultimately, your bottom line. Over time, companies that have the same issues over and over again will not only have bad social scores but will show customers they are incapable of improving. You don’t want to be written off as a lost cause.
4 Ways to Drive Engagement With Facebook Ads
By VICTORIA RANSOM
Victoria Ransom is founder and CEO of Wildfire, a global leader in social media marketing software. She is also a sought-after expert on social marketing trends and was recently named a 2012 TechFellow by the Founders Fund, NEA, and TechCrunch. For more on social advertising, register here for Wildfire’s free on-demand webinar.
In the run up to Facebook’s fast-approaching IPO, the company is making extensive and ongoing improvements to its advertising platform. The most recent updates, which are not yet live, will allow marketers to optimize their ads for any Facebook action (not just likes). These new capabilities will also give advertisers a much greater understanding of their consumers, allowing them to segment marketing messages based on certain user groups. All of this goes to support the general belief that Facebook wants to turn their ad platform into the main driver of a brand’s reach. To be successful in this space, brands will have to be very authentic. The first big move towards making ads into more organic-feeling messages came when Facebook introduced the updated Premium ad format, in which Premium ads could only be created from real content posted to a brand’s page.
It continued with the recently announced extended feature set for the ads manager, which includes the ability to set different metrics and goals for different campaigns. This capability allows you, for example, to set up one campaign and optimize it to be shown to users most likely to post comments; and set up a different campaign for users most likely to spend their Facebook credits on an in-app purchase. With this tool, marketers will be able to more efficiently use Facebook advertising to capture the attention of very different kinds of Facebook users.
This means that now, more than ever, the challenge to create organic-feeling and genuine ads is on! Here are four ways to drive more engagement with the new Facebook ad units, along with tips for how to enhance performance once the new action-driven optimization capabilities are live.
1. Create Versatile Video Content
When viewing a premium ad with video, users can watch the clip in its entirety straight from the ad, or click through to the page to learn more. The variety of options means more interactions are possible, which is great news for an ad because it can be doubly effective!
Above, McDonald’s and Tide turn video posts into premium ad units. McDonald’s adds in a second user interaction: a hyperlink to the local farmer campaign on an outside domain. In this way, users can land in one of two different places: the outside website or the fan page itself. They can also just watch the video without leaving their news feed at all.
Tip: When Facebook makes the new action-oriented optimization features ready, you’ll be able to optimize your budget by the action you value most. Those actions can include targeting users who are more likely to watch the video, targeting users who are more likely to share the video, or targeting users who are more likely to post a comment on your video.
2. Use Promotions to Track ROI and Ad Performance
Soon, Facebook advertisers will be able to segment the demographic coverage of their varied ad campaigns by propensity to buy, click, or share (or any other activity). For the time being, however, brands like Starbucks and Schick can track the ROI of their premium advertising placements by tracking mention of the $2 Petites deal in Starbucks stores, and by tracking entry rates to the XTreme3 Eco remake contest by using custom referral links for the promotion.
Tip: Once you’re able to target your ads based on action-specific metrics, ROI will become easier to track. For example, if your product can be purchased from the Facebook page either with credits or through a custom application, the Facebook ads manager should be able to optimize the reach of your ad to those users more apt to make purchases ahead of those who take longer to buy.
3. Showcase New Product Lines
Since Premium ads make use of the content a brand posts to its own page, it can be challenging to think of posts that will both organically attract user attention but also serve as compelling advertisements. Consider showcasing individual items by pointing to their trendiness, or showing off a unique set of products from a new product line. These are both good ways for users to view your ad from their fan page.
Incase and Rugby Ralph Lauren demonstrate two ways to advertise products without crossing that delicate line into inauthenticity. The photo of the new Andy Warhol iPhone case collection reveals an interesting and limited edition collection. Rugby Ralph Lauren’s post about spring-ready classic oxfords and blazers offers helpful advice, while linking directly to a ready-for-purchase catalogue item. In line with all the “typical” posts to Rugby Ralph Lauren’s Timeline, nothing about the post looks out of place, or forced.
Tip: When you endorse page posts by turning them into sponsored ads, and you optimize those ads for certain engagement activities (i.e. comments or likes), your ads will be served first to the users most likely to perform those actions. Since your page post is receiving the benefit of being served to more “engaged” users, once those users interact with the ad, your brand benefits from the boost in EdgeRank and subsequent posts enjoy an increased reach.
4. Post Interactive Content
Posting content that specifically instructs users to take action, and pairing that call-to-action with an example image, is a great way to influence engagement. Iams is a good example of this.
Tip: The Facebook ads manager will be able to optimize for photo tags, which is one of many new metrics a brand can set a campaign around. An example of how a brand might use this can be illustrated with the Iams ad. The Iams fan page administrator will be able to track the viral effect of requests in their ads if, say, a user posted a photo to the Iams page even a week after the ad ran (in response to the call to action). Before, Iams wouldn’t know if the success resulting from asking their fans to post their own photos to the page was because visitors saw the ad or the Timeline.
Which in-network actions do you anticipate optimizing most of your campaigns for? In-app purchases? Shares? Share in the comments!
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