Consumers have a huge amount of control in the modern marketing environment. How can you reach them, capture their interest, stay in front of them, get them to decide on your products, and be able to prove you did all that. That’s what we will cover in this first section.
The nature of marketing, and especially the subset of marketing termed advertising, is changing at an absurd pace. Over the last 100 years the notion of advertising has matured and morphed from it’s print-dominated roots into a broad set of disciplines. But until recently all of those disciplines worked in a similar fashion–you thrust some kind of advertisement in front of a lot of people, hoping some of them would be influenced to buy your product. Change happened slowly when it happened at all–a TV ad from 1950 is not substantially different from one in 2009. Then along came technological acceleration and everything got fast and weird.
The internet and the web are important elements of that change, but really only that–just an element. What is really different is that technological rate of change has reached a breakneck pace and will not stop or slow anytime soon (absent catastrophe). A simple example is data storage. I have no problem remembering when I used to count every byte in each field of a data record hoping to trim one or two so I could do better data manipulation with my very expensive 40 megabyte hard drive. Seems like it was yesterday. Now my phone stores 16,000 megabytes of data on a card the size of my fingernail, and that’s only because it’s old. A terabyte drive (1,000,000 megabytes) is less than a hundred bucks.
Here’s a factoid that’s a bit less geezer than ruminating about data storage and the bad old days. Mark Zuckerberg founded Facebook six years ago. Today if it were a country it would be the world’s 4th largest–basically the entire population of the United States visits Facebook (340 million unique visitors) each month. China’s equivalent, Qzone, is two years younger and three times larger.
We could “gee whiz” about this all day, but the critical takeaway is this: Marketing is being dragged along by this rapid change at a rate that means we will see more changes in the next few years than the last three generations of marketers experienced over their entire careers.
Got any plans to prepare yourself for that?
I’m going to help you build that plan. We need some organizing principles to do that. When I started writing this book I just began stuffing things I’m experimenting with into chapters. Good information I think, but hard to assimilate. In casting about for an organizing principle I came across an article from the IBM Institute for Business Value titled “The End of Advertising As We Know It”.
“Oh blah”, methinks, “another death of advertising article”. But it really isn’t, and there’s some fabulous research and insight behind the humdrum title. But even better for my purposes are the four drivers for change that IBM identified in their global survey:
Attention – Consumers are in control. We marketers used to be able to interrupt them and consumers had to just take it. Now they have control over what and when they view content, how they interact, what channels they use and how much advertising they are exposed to. Attention is shifting away from linear TV to ad-skipping, sharing and rating tools. Not just Tivo and DVR’s but web TV and a whole new class of personalization. IBM’s survey suggests personal PC time now rivals TV time. Even where it doesn’t, control is shifting more in the consumer’s favor every day.
Creativity – Anyone can create compelling content that achieves an audience. The tools are cheap or free, the most important venues are free. User-generated and peer-delivered content, conversations and ideas shared for free across social networks, new models for compensation. All are driving a huge burst in creativity with a scope that is almost beyond description. What the content lacks in polish it makes up for with relevance and freshness. On the professional side, established players, like publishers and broadcasters, are taking on traditional agency functions and broadening creative roles.
Measurement – The old mass-market model relied on highly disconnected, fuzzy and time-shifted cause and effect. “We put up five billboards and our business increased by five percent last quarter”. The one-to-one world includes involvement-based measurement and reporting with undreamed of precision. Everything can be measured in realtime, and so it is. Fewer and fewer marketers are interested in buying “impressions”. Two-thirds of the advertising experts IBM polled expect 20 percent of advertising revenue to shift from impression-based to impact-based formats within three years.
Advertising inventories – Increasingly the cost of advertising is set directly by it’s value in attracting business. With an infinite number of channels and venues, exploding content, and precise measurement intersecting with technology to manage all value factors, there’s little room or reason for human interaction. Advertising is increasingly bought and sold through efficient exchanges. What will that look like five years from now? More than half of the ad professionals polled expect that open platforms will, within the next five years, take 30 percent of the revenue currently flowing to proprietary incumbents such as broadcasters.
Smells like a whole new ballgame to me. But best of all (for me anyway), that’s my set of organizing principles. A set of broad strokes capable of pigeonholing everything I have to say.
I will be writing about new concepts and modifications of traditional approaches in the context of these four elements. I believe this will be the most helpful and effective way to present this material.
We will be using a semi-fictional company as an example throughout the book. The company is called Ke Nalu (Hawaiian for The Wave). We’ll grow it from a simple Stand Up Paddle surfboard company into a multinational conglomerate to suit our purposes.
This is all quite handy since I own Ke Nalu, LLC. and the web site associated with it–an e-magazine about Stand Up Paddle Surfing, one of my hobbies. I built the magazine as an experiment, but it’s live and functional, so it makes a great sample. About 400 people visit it daily, so we can even play with marketing approaches and see what really happens.
Maybe you’ll even get into standup paddle surfing–I highly recommend it.
We’ll start off with basic theoretical principles of new marketing tools and approaches, we’ll start playing with the toys and watching results, and then we’ll integrate those new tools, venues and concepts into more traditional marketing for an overall plan. Some companies make two very visible mistakes today–they separate their marketing approaches into new and old, or they abandon traditional marketing for the bright, shiny new toys. The most successful marketing I see today marries the old and new to leverage the strength of both.
You might wonder why I don’t simply use B&J clients, and just lean over the shoulders of B&J’s people to illustrate approaches and concepts. Two reasons: First it would distract the heck out of B&J’s fine talent, and second when I have previously tried to write about work we’ve done for our clients I was perpetually stymied by the proprietary nature of most things we do. B&J is great at collecting data and turning it into strategic and tactical directions. But our clients understand how valuable and revealing this is and insist that we keep their particular flavor of it secret. And besides, to write well one needs to write fearlessly–that’s hard enough without worrying that a client might object to something you write.
The So-Called Science of Marketing: Why nobody knows anything
I’m tempted to do a spit-take when anyone says “the science of marketing”. Marketing is not now and probably never will be a science. The most fundamental aspect of science is a willingness to prove that your hypothesis is wrong. Marketers always aim to be proven right, even when they fail. We do generally learn more from failures than successes, which is a good thing, since a lot of marketing fails miserably.
Good marketers certainly test. The best marketers test as often as their company or clients will permit them. We gain a lot of data, but it’s all hopelessly skewed since it is gathered without a true control element, though direct marketers toss the term “control” around constantly. The data is also skewed by the need to be right. The aim is always to eventually sell products or induce a specific behavior. The need for success precludes science.
That doesn’t mean we proceed purely with guesswork, but it does mean that the discipline of marketing bears more resemblance to shamanism than to science. It’s more fashion than fact. For example, marketing expenditures for direct marketing using printed materials have declined sharply, buoyed only by catalogs and mass mailings. Most of that budget has been redirected to internet-based marketing. Is that because marketers have conclusive evidence that internet marketing provides a superior ROI, or that the effectiveness of direct mail has diminished for some reason? Or is it simply that it’s out of fashion?
Since very few marketers actually track response through to sales, and often more importantly, through to larger relationships and large scale adoption, the ROI figures reported by various industry surveys are highly suspect. The nature of most digital marketing today is that it proceeds either one-to-one with people you already know (at least well enough to have permission to send them email or communicate through social networks) or with people who are actively searching for your product or service.
In other words most digital marketing is absolutely analogous to the marketing strategies of either selling cookies to grandma or “Location, Location, Location”. How very far we have come.
In truth there’s still money and effort spent on the web at reaching people who are simply at a specific venue, but that’s just an artifact of traditional marketing, albeit one with the potential for direct interaction. But the web is a very poor environment for interruption. There are far to many options available. Interrupt someone a little to much and POOF, they are gone. Traditional venues like magazines, TV, radio, direct mail, have all been honed to connect with people both based on their interests and on the potential to influence them–to convince them that they should be interested in a product. To intercept and interrupt them while they are doing other things. That is a powerful capability, and it can be highly leveraged if it’s part of a general platform. But the trend is away from these traditional venues.
There is no “science” behind that trend. Certainly we can prove internet-based marketing yields a lower cost per contact. But so would a loudspeaker truck in Times Square. In terms of short and long term sales effect we really don’t know, we just pretend to. Most importantly, the people who really make the decisions often know nothing about the data–flawed though it might be.
In truth, most marketing decisions are made by people who are not hands-on marketers, and therefore are not knowledgeable about the newer tools and approaches. The executives who approve, and in many cases restructure the marketing budget often have very little supporting evidence for their decisions. They make highly arbitrary decisions about what to cut and what to support, without regard to, and even in spite of good information.
I’m not being hard on, or dismissive of CMOs or other senior marketers–certainly not based on my experience in working with them. I’ve met a great number of brilliant and talented senior marketers. I’m simply recognizing the limitations of senior positions. They don’t have time to play around with marketing tools, and that’s what it takes to be even passingly familiar with the key components of this new environment. Furthermore, any senior manager that tries to understand the tactical aspect of their marketing by getting their hands dirty will be regarded as “not strategic enough” or “incapable of delegation”. We should not expect CMOs and senior marketers to be tactical. But they do need to understand the demands of the marketing environment we now inhabit.
A recent study sponsored by the sales and marketing practice of Deloitte Consulting LLC, the Jigsaw business community, and Ad-ology makes this disconnect between what is measured and what gets done very clear. Nearly from the start the study reveals what I interpret as a major rift in reality:
- Senior management is demanding that marketing contribute more to the bottom line.
- Senior marketers express confidence that they can deliver by focusing on execution and having clearly defined goals, improving operational controls, and stepping up analytics to help guide resource allocation.
That might sound logical on it’s face, but it simply floors me. From everything I have experienced senior marketers can’t or don’t invest in initiatives on the basis of bottom line results. Overwhelmingly their budgets are for what I’d call status quo digital–email applications and standard web initiatives. They are shifting their budgets away from traditional marketing in the old sense, but they shift it towards marketing that has a relatively dodgy history of delivering actionable results.
Their budgets–at least as reported in the survey, and certainly in the general terms of my experience–have very little focus on analytics or data. I suspect many will buy a Marketing Automation system, which would require a complete refit of their marketing team to deliver the kind of results they are hoping for. And while they are learning the age-old lesson that new software is never a solution for systemic problems, implementing such a system will suck up 20 percent of their budget and 60 percent of their resources.
The failure to invest in data systems and deeper analytics is not necessarily a bad thing if they can rely on their agency to fill in the holes, but there are very few old guard agencies that have any real understanding about integrating all forms of marketing across digital platforms. In fact they are allergic to the entire idea. The lead agencies at the large advertising conglomerates break out in hives at the thought. They retain their big picture orientation on brand. The digital marketers are isolated in their niche and are viewed by the core agencies as competing for the clients budget.
Companies that really decide to focus on accountability, data-driven integration and advanced digital tools are likely to need odd geeky agencies like Babcock & Jenkins, which can be a challenging shift. Aggressive, fast moving companies don’t have a problem hiring leading edge agencies, but larger companies generally want a solid global infrastructure, and by infrastructure they mean offices in other countries. Highly technical agencies tend to deal with globalization through collaboration rather than expansion–it’s a natural solution to them, akin to outsourcing elements of a software development project.
When I was actively working at B&J I had far too many meetings with senior executives at large companies who told me that even though our marketing was working spectacularly well for them, that they needed an agency with a global infrastructure. Always a puzzling statement since invariably we were already executing successful global integrated direct mail/email/web programs, that delivered direct mail, email and supporting landing pages into dozens of countries–all tuned for cultural idiosyncrasies by freelancers in every locale.
It’s not easy for a big company to accept that an office in Hamburg does not make an agency better at confronting the grand shifts in how marketing is done. In truth, a fixed global presence stands in the way. An agile agency pulls an international team together for even a single project–that’s what web collaboration tools are for. They aren’t stuck with a low-performing staffer who has been exiled to a remote office–you can get the best and brightest and instantly replace anyone that doesn’t measure up. No inertia, no politics, no HR issues.
But that is not how big companies handle global presence, and they can’t imagine their agency doing any differently. They still tell themselves stories about Chevy calling the Nova a name that sort of means “doesn’t go” in spanish. But that was 1965, and really, no one needs to make those kind of mistakes in our world where global communications, document sharing and all forms of digital collaboration is instant and free.
It doesn’t matter that there is a demonstrably better, or at least equally good way of doing things. The challenge is that large companies carry large momentum, and the rate of change today is so great that many can’t even comprehend what is possible, let alone execute it.
For example, CMOs who were surveyed for the Deloitte study said that retraining and developing existing staff is the leading strategy for acquiring or sharpening expertise in digital marketing competencies, with 62.9% of respondents electing training over recruiting new talent (28.6%) or outsourcing (17.1%).
I don’t know of any training that will ensure digital marketing competency, in fact I can’t imagine it. This world moves too fast for a syllabus. The examples in this book will be obsolete before I finish writing it, never mind before it gets printed. I suspect that few of the CMOs surveyed have any idea, much less an actionable plan, for what it would take to get their staff trained and competent. They just like the idea. They don’t have to replace good old Wally, just get him some training.
There is always a disconnect between the notion of “competence” and “core competence”. We should think of a better term for the latter. CMOs tend to build little in-house agencies because they believe it will be more efficient and because it demonstrates their competence as a marketer. It might do that, but it also demonstrates that they aren’t paying attention to the needs of the company. Marketers working inside a company must pay attention first and foremost to all the internal issues that stymie good marketing. They need product knowledge, understanding of all the channels, political savvy, customer and prospect knowledge, and a myriad of other time-consuming elements that only they can master. That is what they need to wake up thinking about every morning. That is and should be their core competence.
Believing that they can also master all the tools, resources, venues and techniques of modern marketing is not just wrong, it’s a fatal distraction. Those issues are the core competence of an agency. If you can rent that instead of buying it then you are miles ahead. They will wake up every morning thinking of the right things. They will make at least some of their mistakes on other clients, so you gain from the experience without paying for it. An internal “shop” is a dead end–you’ll do the stuff that works and your world will get smaller and smaller. It’s how companies make the decision to go “purely digital” which is the equivalent of only selling your cookies to grandma. If you only market to the people that are looking for your product, you are operating on inertia–eating the seed corn. Looks good for awhile, and then you starve.
For those CMOs that don’t believe that, at least understand this: There is only one way to stay current: Immersion. You have to jump into the machine and start playing with all the knobs and switches. While there are many thousands of people who are highly knowledgeable about digital marketing, they are a rare breed in the marketing departments of large global companies. I’ve only met a few, and they are wonderful to work with, but they are not often in a position of influence, except as a specialist guru.
According to the survey, CMOs say that realigning operational processes and capabilities to better support sales and drive demand generation was their top accomplishment for in 2008.
Alignment with sales is a new fashion–reflected in the current crop of whitepapers by marketing consultants. I’ve read some really bizarre ones recently. Peppers and Rodgers went so far as to call Sales and Marketing a Power Couple. Yuck!
Marketing exists to drive sales, but the new fashion statement goes much too far. Sharing common goals, having an identical notion of what a customer represents, agreeing on metrics and what constitutes success, and probably giving each other bunny hugs. I’ll talk about this a bit more later, and explain why I think you should not bother with this notion, and why it could destroy the effectiveness of both departments, but suffice it to say for now that the conflict between these two departments is natural, and can be very productive.
CMOs are also investing in general marketing automation, with the top categories being email marketing (44.9%) and online surveys and research (33.2%). The analysts found it disappointing that only 10.1% are investing in master data, 12.8% in marketing operational systems, and 9.3% in marketing resource or process management solutions.
I’m heartened by those percentages, and I do not find that unwise. Most internal marketing operations are focused on product and market issues and managing the internal hurdles to effective marketing. Building and operating complex marketing automation systems that leapfrog each other with each release is a poor use of effort and resources.
Most importantly, buying a hammer doesn’t make anyone a carpenter.
Companies get bogged down in big automation solutions, and once they choose one, they are largely committed to that solution for a long time–perhaps forever, or at least forever in digital terms, which is five years or more. The lessons of CRM, Sales Force Automation, and ERP before them should not be lost–complex systems rarely get used anywhere near the capabilities of the system, and when they don’t, the return on investment may be a long time coming. In the meantime you can waste a lot of resources and time populating a system that functions at a low level, and then begging people to use it.
I don’t view investment in these tools as a good basis to determine how effectively a company is approaching digital marketing. Much more important is that senior executives have a clear understanding of what is possible, and a rational path to achieve their goals. Working with the right partners and transitioning internal skill sets over time can be far more effective than trying to build in-house capability quickly, or basing the transition on selecting a particular tool. I think it’s important that companies develop deep digital capabilities, but the company culture must figure greatly in the “own or rent” decision.
Companies need to own their platform, and invest in it’s capabilities. The mistake is in thinking that platform means a piece of software. Platform is the way you integrate all your marketing to face your prospects, customers, critics, analysts and the world in general. We’ll talk a great deal more about this. It’s pretty much what the book is about.
“This year’s survey shows increased spending in online and digital at the expense of traditional media budgets will continue in 2009,” said C. Lee Smith, president and CEO of Ad-ology, one of the study sponsors. “Digital marketing metrics such as page views and click-through rates give at least the perception of accountability, making online marketing increasingly attractive as the industry focuses on performance measurement.”
“Perception of accountability” is an excellent choice of words. It’s interesting to see that only a small percentage of marketers (less than ten percent) consider their metrics and analytics to be excellent while more than thirty five percent are questioning the value of their investment in digital marketing, struggling to show value or to demonstrate that they are converting visitors to leads or to customers.
The problem isn’t the media, it’s the method. We’ll address all these issues in this book. We’re going to get very technical, but we’ll do so only to show how these new approaches work. I don’t expect you to necessarily learn to use the tools–just to understand what can be done today, and see where you’d like to go tomorrow.
About the study: The survey was conducted among more than 650 marketing executives worldwide across a wide range of industries. Respondents were asked 28 questions. The study was sponsored by the sales and marketing practice of Deloitte Consulting LLC, the Jigsaw business community, and Ad-ology.
The Closest Thing to Science: Keywords as a Discipline
As you will soon discover, I’m enthusiastic about keywords. Keywords and keyword research are about as scientific as marketing really gets. When I say the word “Keywords” I know that everyone immediately thinks I’m going to talk about SEO (Search Engine Optimization) and Paid Search, or some related web-specific discipline.
I’m not. I don’t consider myself enough of an expert at SEO to write a book. While I do like to get my hands dirty I do try to cultivate a strategic viewpoint. SEO to me feels like spending a tremendous amount of time to memorize the part numbers of a 2009 Honda Accord. The information might be useful today, but when Google changes how they work, or web search somehow actually does what we would like it to do (find stuff we want) then all the part numbers will change. In other words the knowledge is about a temporary situation, the governing parameters of which are both arbitrary, and under the control of other people.
That isn’t to say that SEO isn’t valuable today–it clearly is. But for me the biggest value is not the SEO practice itself, but the underlying principles of the tools: They are a really fine attempt at distilling relevance and popularity. I use the tools and principles constantly so I can experiment with all elements of marketing.
I believe that Keywords are the most powerful marketing effort organizing tool that marketers have ever had (other than perhaps good databases). What keywords really are is the words and phrases that customers, prospects, pundits, critics, and anyone interested in your products and services uses to talk about them. Not only can you use them to lead people to your advertising, but you can find everything your competitors are doing online, locate every online conversation, determine the relative value of each concept, trend market growth and consumer interest, monitor customer reaction, find untapped niches and competitive weakness, gauge market size and growth, and inform every bit of marketing, PR and customer relations that your company does or considers.
And you can do it all at a remarkably low cost.
Equally important, companies today are struggling with how to use social media to boost business. Good keyword research flings that door right open and makes any effort more certain of success. Social media is completely about conversations, and Keywords are the guide to effective conversation.
Here’s the bullet version of what you can do with keywords:
Create new revenue streams:
- Find and exploit competitor weakness
- Locate niches and alternative markets
- Find markets for revised products or services
Measure market size:
- Find the total number of searches for every keyword
- Trend the market
- Track search growth for all relevant keywords
Develop advertising and content:
- Include critical keywords in online content
- make conscious choices about creative, based on the language your prospect use in all advertising
- Find popular online content to license or use for “inspiration”
Do customer/prospect research:
- Find and track the critical conversations
- Rank customer/prospect concerns
- Build FAQs
- Rank desired features
Inform SEO and paid search campaigns:
- Locate search bargains
- Develop keyword domination strategies
- Track and evaluate competitor efforts
Drive web traffic:
- Build copy that incorporates keywords
- Address issues that your market is searching for
Even if your CEO is allergic to web advertising and all you are allowed to do is free standing inserts in magazines, then Keywords will help you design, optimize and track the results while you start searching for another job.
Marketers assume they know the words that people use to talk about their products. I assure you that they do not. Many years ago one of our clients rewrote one of our ads to eliminate all sense and meaning, interjecting every buzzword and acronym available.
The revised ad read something like:
“The TDS3456 is the first TDSM in the industry to trap and track every artifact in the 20 ns regime. Any DTR development or FRG team will find the Machspec feature vital in qualifying Turbo Encabulators and FTGE testing.”
No, that’s not what it really read, I just made that up, but the client would have loved it. It was incomprehensible to me, and I had worked on the account for months. But hey, I wasn’t the target. The client said the engineers knew all the gibberish and would consider an ad that lacked them, or even one that pedantically explained them, to be not credible.
I took the ad to the engineers that designed the test equipment. They treated it like a puzzle: “I think I know what that one is…”
The point is not that the client was nuts (well, maybe) but that correct terminology may not be what the market uses to talk about the issue at hand. Here’s a more direct example that I’ve seen mentioned several times on the web: Airlines use the term “low fares” to talk about what customers call “cheap flights”.
If you use any keyword tool to look at those two terms you’ll find customers and prospects use the term “cheap flights” thousands of times more often than “low fares”. Here is the results from using the Google Adwords tool to look at “cheap flights” 45 Million searches for that term in August. You can get your own data by clicking here on the Google Keywords Tool:
Now look at the result for “low fares.
If you were going to do a TV ad for a low fare promotion, which words should you use?
That’s not really such a simple question. You might not want to connect that closely to your passengers–you might want to retain a professional distance. But you should certainly understand the difference, you should have the data, and you should make an informed and defensible choice.
And if you ever wanted to spike someone else’s plan, this kind of data is a fine tool–especially if they don’t have it.