Case#1: Web 2.0 Company

COOKPAD Inc., founded in 1998 by Akimitsu Sano, is a Japanese company that holds the biggest recipe database in Japan, cookpad.com. The website has more than 870,000 recipes tubmitted by the users, mainly stay-home mothers, and the monthly page views are over 460 million. The estimated number of users is 10 million. With a free subscription, users can post their own recipes with pictures as well as “cooking reports” on others’ recipies. Even without a subscription, viewers can freely search for recipes by listing the ingredients in the search box. Thus, COOKPAD’s contents are almost completely customer-generated, except for some promotional recipes posted by the advertisers.

COOKPAD is using one-to-one marketing. There are two main purposes for COOKPAD to take this approach. The first reason is that personalization of the website maintains the users’ long-term interests, which strongly makes the users come back to the website as a habit. For example, the registered users create their own recipe book online and save their search results. “My Page” holds a folder of the user’s favorite recipes, a recipe album, and updated information from other users. Thus, customization of the webpage enables the company to market towards the individual users, rather than the mass users.

The other benefit of one-to-one marketing is that COOKPAD is able to enhance  the effectiveness of their clients’ advertisements on the website and mail magazines. According to the registered information, COOKPAD manages to segment the target audiences precisely, so that the advertisers feel secure to spend money on the ads. For instance, if a user searches recipes for desserts, COOKPAD would specifically show the banner advertisements that are related to ingredients or tools for baking. On the daily or weekly mail magazines, different advertisements are placed according to the readers’ interests recorded on the company’s customer database. Therefore, COOKPAD is using one-to-one marketing to improve the customers’ loyalty and the effectiveness of advertisements. 

COOKPAD employs three principles of Wikinomics: 1) openness, 2) peering, and 3) sharing. The first principle is the openness of the website contents. All the recipes are shared with viewers at free of charge. If a viewer simply wants to search recipes, they even do not need to register for an account. Although it is possible for COOKPAD to hold the valuable recipes back and charge the customers, they keep it an open source to generate large number of page views. Also, COOKPAD encourages contribution from organizations outside of the company. The advertisers never put simple display ads of their products on the website. Instead, COOKPAD collaborates with the advertisers for “recipe marketing,” in which the advertisers introduce practical use of their products along with recipes. The contributors range from food suppliers, kitchen tool providers, to consumer products, such as Procter & Gamble. This unique and successful marketing approach is also open to competitors, such as other recipe sites and publishers. This can be beneficial for the competitors, and there is great possibility for copycats to appear. However, COOKPAD bravely maintains its openness to stand as No.1 recipe website made by mass collaboration.

Procter & Gamble introducing a dish detergent on Cookpad.com

          The second principle is peering. Since all recipes are user-generated, the contents are solely the products of peering without hierarchical structures. The users are equal on the website no matter how good they are at cooking. They even cooperate with each other to make improvement and give suggestions on each other’s recipes. I think this is the most successful factor of COOKPAD, because the recipes are much easier for anyone to try compared to published books written by professionals. Peering also fosters competition among housewives who voluntarily submit their original recipes to the website. This competition is highly important because it keeps the quality of contents improving. Without financial incentive, self-selection works quite well for the housewives because their husbands bring in adequate income. The corporation’s structure is also based on peering, holding only 70 employees who exchange their marketing ideas frequently.

Detailed directions by users

   COOKPAD also employs the third principle of sharing. Obviously, COOKPAD shares the bandwidth with the Internet, cutting off the publishing fee that was necessary for traditional recipe books. Also, they publicly share all recipes with users to encourage collaboration and to possibly add values to the advertisers’ products based on the unique and creative insight of the users. For instance, according to COOKPAD’s corporate website, when Panasonic introduced electronic pressure cooker, it collaborated with the users of COOKPAD to generate word-of-mouth marketing. The selected COOKPAD users received the cookers from Panasonic, used them for cooking, and reported their recipes and reports on the website, which further generated other users’ interests in the product. As a result, the sales of the cookers were 26 times more than the previous year. COOKPAD is a place where users can share their knowledge and innovation, which adds value to advertisers’ products, establishing win-win situations for all participators. 

Valentine's Recipes posted by Philadelphia cream cheese

I think COOKPAD’s business model is very successful, but there is still an opportunity for them to expand the business. Strength of COOKPAD is that they frequently collaborate with cooking-related companies, which make the advertisements more effective. Since the ads are always related to cooking and provide helpful ideas for cooking, they never annoy the users, unlike the random ads on other websites. This strategic advertising, which they call, “recipe marketing,” is a success and made it possible for COOKPAD to be heavily dependent on advertising revenue. It is estimated that their total revenue in 2010 was over $18 million, which is quite high for a niche business. COOKPAD also keeps evolving to catch up with technological innovation, by adding different platforms, such as an iPhone application.

Although COOKPAD seems to be successful as it is now, I personally believe that there is an opportunity for them to act globally, which is the last principle of Wikinomics. Since they already have all the sources available to the world, I would suggest them to prepare translated version of the website and recipes in English, Chinese, Korean, French, Italian, German, Arabic and so on. For all the cooking lovers, it should be very appealing to have recipes from all over the world at no fee. According to Warren Edward, the recipes on COOKPAD outnumber American recipe websites, such as Allrecipes.com with 40,000 and Food Network with 25,000. As more people become connected to the Internet in the world, more users will participate in those Web 2.0 recipe sites. I strongly think that expanding the business to the globe from Japan is a key for COOKPAD to remain competitive in the age of globalization. 

Sources:
http://info.cookpad.com/marketing_case
http://ezinearticles.com/?Make-a-Website---How-One-Japanese-Infopreneur-Cooks-Up-Profits&id=4284258