Marketing

[Just some random thoughts on traditional marketing today...]

I constantly think about the importance of getting down to either business strategy or processes when it comes to marketing or advertising (or anything happening inside a business), and it’s funny how I often think of it when the glaring examples of NOT doing so come up.  Everyone claims to focus on these things, but it seems that (much) more often than not, companies don’t.

The standard definition of distinctive capabilty/competence is:

“Excellence in broader business processes, as opposed to a firms’ core competencies, which refer to areas of special technical and production expertise.” - Kotler & Keller, 2006

One of the most important parts of this concept is the ability to build the competency fully into your product design.  The ability to integrate it into the firms’ activity systems determines how well it can be leveraged for actual competitive advantage. Often times these competencies set up the marketing opportunities perfectly.  However, I don’t need to tell you, unless you do actually incorporate the competency into product design and processes, marketing isn’t worth squat.

So, what happens when your product or company, upon which you’ve developed a solid distinctive capability and marketed equally as successfully, is bought and someone else has the reigns?

Someone else has control over your brand positioning and your production processes.

It’s one thing to continue the brand positioning and messaging that existed prior, especially if it was good, effective and unique.  But it’s another thing to carry that into the production process.

I thought about this after I was going through some old (gasp!) hard copy articles on the topic, and the example of Volvo was used to describe a successful distinctive competence (it was an older article, so it was still just Volvo).  Volvo was the “safe” and “reliable” car, and this concept, in addition to being a marketing tool, went into every aspect of product design.  It was actually a safe car (I come from a Volvo family).

When Ford bought Volvo in 1999, they continued selling it as a safe car.  But, in my opinion (and many others’ opinions) they didn’t carry this into product design.  They rode the coattails of previous marketing campaigns, but neglected to back it up with back end business processes.  My family stopped buying Volvos at the 2003 S40 because it wasn’t running as well, and there were concerns about the level safety it was really providing.  It just wasn’t the same safe and reliable car it was before Ford acquired it.

Again, I know I know, it’s all very obvious.  But why do I still keep saying “duh!” all the time when it doesn’t happen?

I’ll be conducting an hour-long session on Monday at 12pm on how to leverage corporate blogging in your business.  This is part of BrightTalk’s Conversational Marketing Summit.

To sign up, go here, scroll down to the appropriate session and go from there.  Hope to see some of you there.

We’ll post up the slides here when we’re all done for your reference, but it won’t have my commentating.

As a note, I thank Zach, as his session earlier this year on the topic was helpful in putting this together

Economic downturns always spur “marketing innovations” in terms of packaging: fewer chips in the same bag; visible “30% more product” for the same amount or money; make the mouth of the toothpaste tube smaller to compensate for consumers attempting to squeeze out less and “save.”  Basically, you want to either reduce your costs (give less) or induce buying (make consumers use more or make them think they’re getting more).

Well, this is expected from the big guys like P&G and K-C.

But I can’t lie when I say I’m a little disappointed in the egg guys for what looks like a pretty blatant attempt at this.  Witness below, four photos of “X-large” eggs currently in my fridge.  For a few weeks now, I’m pretty sure I’ve been subconsciously thinking about how the size “sure was looking small.”

So, this means I’m getting a whole lot less egg than I thought I was, or that they told me I was! According to these egg conversion rates, if I at any point wanted to have 1 full cup of egg whites, I have to use an extra egg to so.  So, by that logic, I have to use a whole 20% more product to get what I want.

If there’s anything I feel should be untouched, stable, promising and unmarketed, it’s eggs…..

I guess they’re allowed, I just didn’t want them to be.

Excuse me while put my chin in my hand and sigh at the state of the world….

We’ve been discussing (beating to death) the topic of measurement and ROI in social media for a while now.  How do you measure ROI?  What elements go into that measurement?  How do you talk about the lack of a “traditional” ROI measurement to bosses or clients who want to see it?  Can you make a convincing argument or feel good about results without it?

Well, if you’re in the industry, hopefully the answer to the last question is clear.  As Anya said this morning:

“The answer is clear: You don’t need hard numbers and a specific percentage point ROI to know if your efforts in social media and marketing are worth your time and money.”

That’s part of the point that Professor Andrew McAfee made this morning at the Boston Social Media Breakfast.  And it’s what I’ve been wanting to hear from someone of authority for a while (he’s said it before, in his blog).

A few of his points (among many others):

• Why can’t you look at the data, not have an ROI, and still feel ok with the results?
• Business leaders should be able to think about a situation and whether it’s outcome is good or bad without a bold and highlighted ROI number in front of them.
• Business leaders should also trust each other without being provided an ROI (Please note: I’m not saying trust anybody, this is in conjunction with the above point)
• Really, what has ROI ever meant?

I’d like to add one thought or expansion  that I think McAfee was hinting at.

Playing with the elements of the ROI equation has always happened.  It’s as follows:

Once you’re past your core finance or marketing class in business school, where they ever-so-conveniently but ever-so-unrealistically give you the perfect numbers, you’re usually figuring out what specific elements are the best to put into the equation and sometimes it gets pretty creative.  What’s your gain?  What are your costs?

But more importantly, what are we talking about when we say return?

ROI has really never been straight forward.  It can be different in different companies.  In some cases, the inputs have been easier to recognize.  In most cases, the ROI measurement has been used long enough in a company or industry that it takes about 30 seconds to compute and either write out bonuses or work longer hours.

I found something to think about in a really quick search I did (not the best market research, but oh well):

• Only 7% of senior-level financial executives say they are satisfied with their company’s ability to measure [traditional] marketing ROI.
• In contrast to the low level of satisfaction among financial executives, an April 2006 survey of senior-level marketers by MMA and the Association of National Advertisers (ANA) found that nearly one-fourth (23%) were satisfied with their company’s ability to measure ROI.
• Though one-third of marketers in the MMA-ANA survey agreed they could forecast the impact on sales of a 10% budget cut, only 16% of financial service executives expressed agreement with that statement.

Traditional ROI measurements have never instilled a large amount of confidence in marketers.  Yet people continue to rely very heavily and narrowly on this number.

Part of the “problem” of ROI in the social media space is that, in a sense, we’re back to square one in choosing the best inputs, figuring out what the best measurement for ROI is, for each company or campaign, without a heck of a lot of the above mentioned standards you find in traditional ROI measurements.

We’re uncomfortable because we’re stuck on the same old numbers.

As Brian Halligan of HubSpot stated in his talk at the breakfast, they do a full set of intangible measurements as well.  What’s your reach?  How many websites are linking to?  What are people saying about your brand? Etc.

The point is, people who are so strictly concerned with the numbers that go into ROI and have been looking at the same calculations for the last 10 years are missing the concept altogether.  It’s the return on your investment.  To Andrew’s point, if you can take one step back (and it’s really just one little step!) and think about the concept of ROI, you may get a little more comfortable with the input numbers that go into it.

He’s right: business people are smarter than they give themselves (and others) credit.  But any good businessman knows what it’s like to analyze something with less than perfect data, and decide whether it “looks good” or doesn’t.  If you find yourself consistently second-guessing in situations like this and looking around for numbers, frankly, I don’t think a perfect ROI calculation will make you any more comfortable….nothing probably will.

This is a bit of an extreme, but a while ago I did a post on Saul from Freshbooks.  I won’t forget what he answered when asked about ROI.  He said that he pays no attention to ROI.  He doesn’t care about it.  He works his magic and he recognizes that there are beneficial outcomes to his actions.  Now, he’s lucky and has a boss who “gets it” so he gets the go ahead for his initiatives.  But he couldn’t have gotten to that point without going with his gut a little more and thinking about the overall concept of ROI.

When the “Return” and/or “Investment” portion of this equation is different than what you’ve been measuring, don’t just say “the hell with this” and back away (in my humble opinion, I think this an absolutely horrible a pretty bad characteristic of any business person, the inability to think more broadly or creatively about these sorts of things, the answer is there with a little more work).

Rethink what returns means.  Rethink what investment means.  Then look at the results, and I’m pretty sure you’ll be able to figure out whether they’re good or bad.  That’s your ROI, right there.

Honestly, I feel the same way that Andrew and Saul feel about ROI, but kept thinking I needed to have the perfect answer for people, particularly potential clients, when they asked.  Well, maybe I’ll ask them everything I just asked you and see where that gets me instead.

For the record, Matt Cutler of Visible Measures also had a great talk this morning, but I remember that I pretty much listened and watched and said “that’s so cool!” for most of his talk, which isn’t a bad thing…. I was particularly pleased with his analysis of the DNC and RNC speeches by McCain, to which he applied a simple cloud map… I went to find it on their blog.  I didn’t find it, but in doing so I realized that the blog is really great (new information for my RSS feed!)

And one last, but not least, thank you to Bob Collins for putting SMB10 together. 

UPDATE: Please check out David Meerman Scott’s short answer from the New Marketing Summit a few weeks ago.  It’s up on his blog.  It’s a great addition to the conversation.

Below is the slideshow to a little talk Anya and I did on Tuesday.

The description for the talk is:

Have you ever wondered how you might be able to use Facebook to increase awareness levels of your company, product or service? Kate Brodock and Anya Woods of Other Side will lead a discussion on the ins and outs of the tool, examples of how other individuals and companies have used the tool for business purposes, and suggest ways you can get yourself started.

Please let us know if you have any suggestions (as we’ll be giving the talk again) or would like to learn more.

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Keynote: The New Media Rollercoaster, Cynthia Gordon, VP of New Media Marketing from Universal Orlando Resort

• The internet has completely revolutionized and transformed people’s lives.
• It’s like a giant collective brain, and we’re sending messages back and forth to each other.
• The consumer is in control.  Blogging has become mainstream.  The past couple of years has shown me that I need to pay attention that.  I also needed to find new and innovative ways to get in front of the audience.
• CNN is an adaptable channel, they partnered with YouTube to bring the debates to the masses.  They figured out the concept of citizen journalism.
• John Stewart and CNN iReporting video.
• We went from 3 channels to over 100 channels doing multiple shows a year.  It’s must more difficult to be a marketer at these companies.
• Ultimately, TV is still people’s preferred medium of watching shows, and that will drive online viewing.
• You can’t stop technology, you have to make it easier for people to get your content.
• Discussed Halloween Horror Night
• Brought up efforts for Harry Potter theme park opening.
• Both of these did happen some time before a Press Release was put out.
• To promote the opening of a new Simpson’s Theme Park, Universal leveraged the millions of avatars that were made in the wake of the Simpson’s movie and made an online world for them to play in.

[Check out Anya's post on Community Platforms]

Christopher S Penn: Study Something Old to Learn Something New

• When you’re trying to get dialogs from your company, think about old medium that it can be compared to (a blog is the same as a newspaper editorial!)
• How can you update the information you already have in your organization?
• There’s nothing magic or esoteric about this stuff.  You can all do this, you just need to learn a little about it!
• Take all the info in your organization that you want to communicate: Things to Watch, Things to Read, Things to Hear, then figure out the format.
• Think about where your customers are.  If you don’t know, go to your database.
• New media is not a new shiny object.  Don’t treat them as new, treat them as tools in the toolbox.
• They won’t save you if you don’t have a functional business model.  Get your business in shape first before you start new media.
• Someone saying that they’re an expert in a particular medium is crap [we like Christopher!]
• Think about old companies, and what made them successful when there was no internet.  What can you extract from their success to make your own business model successful?

CC Chapman: I Don’t Have Time to Play With Everything! Ten quick tips of things you can do

1. Google your brand, see what people are saying, comment on those site, keep the PR people away, let people talk.
2. Set up Google Alerts.  It’s free.  Put in your name.  Put in your company name.  Put in your competitor name.  Put in key words.
3. Twitter is useful.  You don’t have to follow a ton of people, it’s not a game.  Use it in a way that’s most useful to you.
4. Join a social network.  If you’re just starting, use LinkedIn and Facebook.
5. Use newsletters: Marketing Vox, WOMMA and MarketingProfs are three great ones.
6. Flickr is great.  It’s not just about photos, it’s about commenting and seeing what people are doing.
7. Read, Read, Read.  Read everything.  Books, newspapers.
8. Go to Events.  Nothing beats meeting people face-to-face.  Websites like meetup.com, upcoming.com etc.
9. Use Evernote, they’re great.  Evernote everything.
10. Share where you love.  Find out where other people love.

Finally, Dive in and Don’t Be Afraid!

Session: Bringing Web 2.0 Marketing to Dow Jones - Alan Scott, CMO of Dow Jones

Chris: How did you get involved in marketing

Alan: I was in the B2B side of Dow Jones and I was a wise-ass sales executive who walked around saying marketing didn’t have their act together.  Well, they put me into marketing.

Chris: What’s your marketing philosophy?

Alan: Sales teaches you that you have to sell someone in order to live, and they have to buy to be successful.  It’s a crystal clear value proposition.  You have to have it completely clear.

Chris: How did you come to some of the social media decisions you’ve made?

Alan: It’s a matter of participation.  At one point it was direct mail, then moved to blogging and then beyond.  What I look for in making decisions is that it’s well thought out.  Have they sat down and said, I’m trying to tackle a certain part of the population, and there’s a clear value proposition.  Can you convince me that it’s worth a try?  I don’t expect a concrete ROI, but a concrete business value proposition.

Chris: What criteria do use to allocate resources to a social media program and what metrics do you look for to measure it?

Alan: There are certain markets we want to attack, and it’s focused.  Within our group, we decide our business goals, and we turn that into a branded investment strategy, on terms of how we look, where we’re found, etc.  Then we figure out our messaging strategy, who and how we’re talking to people.  Then we layer across that the functional advertising and PR, and then create go-to-market plans.  It gives you the ability to have transparency in our marketing mix, and we can use both pull and push methods of reaching people.  With the new marketing, you can measure all of this stuff, and there’s significant insight into what’s working and what’s not.  I look at how I want to attack the market place, I don’t necessarily have a budget for social media.  Each marketing strategy for each segment is different and they all definitely use social media.  We budget on how we can effectively market to our target.

Chris: How do I reach a CMO to sell something?

Alan: Two things.  First, it’s not true that you have to get to the CMO to sell something.  I’ve got people in my organization that will respond to business props before I will, and often I won’t even be in the process.

Chris: Will Factiva start tracking more online and social media outlets?

Alan: Yes, we’ll add that and continue adding that over time.  It’s very important.

Chris: What don’t you want to know from vendors when you do get into these conversations?

Alan: Unless it’s real, I don’t care about the ROI. Someone told you have to have an ROI, and I don’t think you do.

Chris: How does the Dow deal with the digital divide and connecting globally?

Alan: In terms of the business, about 40% of ours is outside of the US, and there are people all over the world marketing all over the world.

Audience Question: I just want to clarify that whhat you do is really continue with your marketing strategy, whether traditional or not, and you incorporate new media aspects?

Alan: Yes, that’s exactly it.

Audience Question: Can we get a widget to track the Dow on Facebook?

Alan: Ha!  Yeah, we’re working on it.

Audience Questions: What are you doing to woo digital natives to work for you?

Alan: Oh, not enough.  We’re an old company.  We’re getting close to 50/50 revenues in terms of online and print, but in a lot of ways we’re still pretty old school.  We’ve had a lot of recent discussions about how we can attract Generation Y and Generation X.  We’re really trying to foster an environment that works with them.

Chris: How do you pitch your CMO on social media?

Alan: Where I said yes to take a chance is when someone said “I understand we’re trying to sell something to someone.  Here’s who that person is, here’s how this connects to that person, and here’s how it can be converted into a sale.”

Chris: Have you had the situation where someone internally really messed up with blogging and you’ve gotten criticized for the decision to allow it?

Alan: Luckily not, but had happened, I would have said, “Sorry I screwed up.”

Final Thought: It’s all

Check out Anya’s post on PR 2.0 - Public Relations in the New World.

[Check out Anya's write up on Freddie Laker talking about What's Next in Social Media]

Session: Community Management - What Makes a Thriving Community

Panelists: Bill Balderaz, Chief Innovation Officer and Founder of Webbed Marketing; John Kembel, CEO and Co-Founder of HiveLive; Eric Schurr, VP of Marketing and Sales of Awareness Networks; Kate Swanson, Sr Sales Executive of Leverage Software.

Chris: Why are people suddenly interested in communities?  Why make your own community?  What’s the difference?

Eric: It’s a silly brand that doesn’t participate in the discussion. There’s a sense of corporate ownership and responsibility on the part of a brand.

John: Both approaches work, your own community and someone else’s.  It’s about talking and listening.  It’s not turn-taking it’s collaborating.  Most of the discussion needs to happen on the consumer’s turf, part of the process is getting them back onto your turf and into a place to talk.

Kate: You want to have a nice balance of how people can be in the same sandbox and play nicely.  People still expect the brand to have a presence.  Keeping that social layer in perspective is very important, and you have to be careful not to turn that social layer into just another silo on your website.

Chris: Remember when you could just have a nice looking website?  Now what?

Bill: It’s about interaction now.

Chris: The human element of managing a social community is difficult.  How do you advocate the human elements?

Eric: Folks generally dismiss technology.  The assumption is that the technology can provide for a vibrant community in terms of human aspects.  If you launch a community with a clear intention of who you want to communicate with, it will be much easier.

Kate: Honesty and transparency is important, and objectivity is key.  Have product managers make the community seem honest and objective.  You’re not going to have 100% happy people, that’s ok.  Position yourselves as “we want to hear it.”  It’ll open up the conversation for some really good feedback.

Chris: What trends have you seen in the space.

John: Once you get in, you have no idea how much things can change and how perspectives shift.  Trust your gut and expect change.  The second one is just getting it set up.  People tend to underestimate the design, buildout and launch phase and think it’s done much sooner than it is.  Folks tend to lean first on what they have in place internally, as opposed to hitting external sites such as Facebook

Kate: Many companies don’t have significant buy in from senior executives.  That’s crucial.  Sit back before you think about the technology, and think about what your main goal is.

Chris: Community seems like a luxury, rather than a necessity, why is it not?

Eric: It’s a necessity now.  If you’re not involved in the discussion about your brand, you’ll fail.

John: What do you turn to when the economy goes down, when bad stuff happens?  You turn to your relationships.  It’s the same for brands.  It takes a little more patience to build, but it will benefit you substantially in the long-run.

Kate: Word-of-Mouth is free and powerful.  It’s a great thing to fall on, especially in a recession.  A lot of these don’t cost anything.  If you can do something that rewards them, they’ll talk about you.  It’s basically free PR.

Bill: Take the money that you’d spend on two ad placements and put it toward building a vibrant community and it’ll benefit you immensely down the road.