Loyalty Defined, But Underappreciated

“I find that the harder I work the more luck I seem to have.” Thomas Jefferson

This past week, Mashable informed us that Foursquare is adding 15,000 new users a day. What is more surprising is the fact that Foursquare is marketing its application to local merchants, potentially allowing them to leverage the Foursquare Business Center dashboard. What’s even more incredible is Foursquare’s integration with Google Analytics. Who wouldn’t love seeing who is repeatedly checking in to their establishment and then guiding their customers’ purchases?

What we’re seeing is a shift toward even more transparency. Business owners now have the ability to see real-time acquisition (new customers, new orders, and existing patrons referring new ones) from their computers or their smartphones; it is this transparency which will lead to increasingly relevant messaging to their customers. This in turn enables the marketer to identify your brand evangelists (customers who refer and rave to their friends on social networks or forward your company’s marketing message), which will allow you to send them exclusive offers and discounts, enticing them to frequent your establishment more and more while subliminally asking them to return the favor by inviting their friends or colleagues to “like” your company’s Facebook page or follow you on Twitter.

From a loyalty standpoint, social media has leveled the playing field. The barriers to entry for a social media campaign are low, very low. Brands that once ‘controlled’ their customer database through conventional CRM tactics are now vying for customer attention with other customers. Social media has democratized the dissemination of information. Every Facebook friend or Twitter follower I gain leads to increased social media influence. People trust those whom they are closest.

Yes, there is empirical evidence showing brand followers on social media are more inclined to engage and spend money with that brand. What can’t be ignored are the individuals with a large and defined social media presence. I’m hard bent to think Ashton Kutcher-  with almost 5 million Twitter followers - holds less influence than a big brand company with a fraction of that number. Ashton is a new kind of brand evangelist - the customer who frequents a certain brand, posts your message to his Facebook page, tweets about your brand, forwards your company e-mails to his friends, and compels his followers to do the same.

Social media offers marketers a way to think outside the box. What it has done is made the process of segmentation a bit more sexy. As a marketer, you want to be profile centric, constantly vying for more ‘attributes’ to add to a customer profile to send him or her something so relevant, that it seamlessly renders a call-to-action. At the same time, brands have to be cognizant of the fact that their customers can gather and mobilize a considerable audience instantaneous and sway their loyal minions, and ignore your message if you commit a misstep.

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Putting a Price on Customer Loyalty

The proliferation of social media has enabled the customer to now interact with their beloved brands, turning traditional CRM on its head. The ability for a customer to rave about a brand, air concerns or even provide genuine insight on how a brand can improve on their product or service is now a given. Traditional CRM (customer relationship management) has lent to the convention that businesses had tools to engage and converse with their customers after a customer has initially engaged with the brand. The tables have been turned, where a back and forth conversation is now in play.

Twitter, Facebook, and Foursquare are the social media applications businesses have gravitated to in order to establish a more defined presence and promote conversations with their customer base.

Twitter will soon roll out a business center to allow brands to have multiple users contribute to one account, among other features. Facebook’s Pages (similar to a profile page) allow businesses to engage their customers by posting content, providing offers, allowing customers to post their own content and more importantly allow businesses to create custom pages to make no two fan pages alike. Foursquare is beta-testing a business dashboard which allows business owners to know where people are checked in, simultaneously allowing them to advertise offers if a patron is in close proximity as a way to entice them to come to their establishment, create custom badges, and to also allow business owners to engage the macro-foursquare community.

What we are seeing is a massive paradigm shift. First we saw legacy print mail take a backseat to e-mail and now what we are seeing is e-mail’s resonance deepen as social media networks have allowed marketers to glean valuable information from customer engagement within these channels. “Liking” a brand on Facebook, “following” a brand on Twitter and checking in to an establishment on Foursquare is providing crucial intelligence to these e-mail marketing managers whose job is to constantly tweak and improve the segmentation of their lists, thus providing increasingly relevant messaging to their customers. How that is done is by adding more attributes to a customer’s profile within a company’s backend preference center.

The confluence of social media and email marketing is here. What brands need to do moving forward is to not only embrace this change but localize their appeal. As paid search a few years ago was being used by local business to gain market share by directing traffic right to conversion, social media networks need to adopt a similar mindset. If a national hotel chain has a Twitter handle, for instance, it makes sense to instruct customers to include a local hashtag (e.g. #hotelnyc) on the end of their tweet, so their response is localized rather than being relegated to their national headquarters. Foursquare, since its inception, has provided regional access to users but it should follow the same principle with businesses leveraging its platform by creating local accounts to immerse the brand within a user’s locale. Facebook has created ‘community pages’ for groups of people who share an affinity for a business, cause, or brand. What Facebook needs to do is provide businesses with tools for their pages which will give the page a more local look and feel as way to galvanize their local customer base.

What might we  see in the near future? Based on what I’ve seen, social media applications, such as the ones mentioned here, will be licensed to businesses, allowing them to integrate seamlessly with their existing loyalty programs.

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The End of Web 2.0

The times, they are a changing…It seems that every day another Web 2.0 site alters its business model to ramp up stagnant or non-existent revenue growth. Just two days ago Ning, the customizable social nNetwork platform, announced that they are rolling out three new paid models after they ended their free ad-supported model a few weeks back. And Facebook, for all their success, has become the poster child for of Web 2.0 businesses, stemming from the mantra: “Aggregate an audience and then figure out a revenue plan”.

While that may work for the likes of Facebook and Twitter due to their sheer scale, it is proving increasingly difficult for other web properties as everyone battles for the same slice of ad dollars. Even Facebook, who currently has more than 400 million users, has alienated and angered many of them by continuing to dish out more and more of their information, so that advertisers can target you more effectively. As internet consumption continues to rise, people on the web are becoming increasingly savvy. Which means that if you promise them a certain user experience up front…be prepared for people to get upset when you alter how they interact with your site, in the name of revenue. Jessi Hempel of Fortune Magazine saw this and predicted the demise of Web 2.0 all the way back in January of 2009.

Web 3.0 will be marked by sites that do the exact opposite: those that create a revenue plan from inception and provide value to their users who are sharing their personal information. Two of the best examples of this are Mint.com and Offermatic.com, which both leverage members” credit card and financial information to provide offers from relevant advertisers. These web properties bank on the fact that consumers will provide  advertisers with their personal information if the advertisers can provide them value and relevance in return.

Mint and Offermatic are just two examples of a new breed of web based businesses that have well-thought-out revenue plans and provide their users with exceptional value and relevant offers.

You don’t have to be a new web 3.0 business to provide your customers with value; you just need to be relevant. The common theme here is and has always been relevance! If you provide your customers value but not relevance, then you are only halfway there. If you can provide both value and relevance, that is a winning combination.

The world is changing, the internet is evolving, and to find your place in the new world it’s clear that value and relevance need to be a major part of any marketing strategy. The day that I stop writing about relevance is the day that every single email in my inbox is custom tailored to me. Right now, looks like we have a long way to go…

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A Noble Pursuit

“It is not the critic who counts; not the person who points out how the strong one stumbles, or where the doer of deeds could have done them better. “

Over the past decade since I’ve left the publishing business, having learned much from my lifetime mentor, William Ziff, I have used whatever forum I could find to encourage the media business to transform itself. I had witnessed firsthand the dramatic impact that the rise of the interactive medium played upon the industry as publisher of Computer Shopper, arguably the largest monthly publication ever published in terms of folio and ad pages. Selling more newsstand copies each month than Forbes, Fortune and BusinessWeek combined, this magazine carried nearly 8000 annually pages at its height. Today, all that survives of this epic franchise is the interactive shopping service sold to the CNET organization and several print copies that I keep to remind nonbelievers.

Bill Ziff passed on several years ago, a tremendous loss for our industry. Bill was not a romantic; he was an incredible visionary and business person. He dared when others chose to sit on the sidelines. He cared very little of critics and would invest real money in ideas that he believed were leading edge; realizing the analysts and spreadsheet jockeys would labor incessantly over the pros and cons to the point where any potential of leadership would be marginalized. Bill was a bold thinker, and so many times, he was dead on. I am proud to be his disciple.

Anyone who has read past articles of mine knows that I have often talked about the dire need for the media business to shake itself from the legacy world and transform. Hundreds of magazines have been closed down over the past few years, circulation declines continue within the newspaper business. The continuing shift of consumers to digital forms of content is irreversible. Only the foolish believe that we will one day return to pre -digital media consumption patterns.

I have believed always that media companies have an incredible opportunity to shape a new business model in the face of this reality. At their core, publishers have always known a tremendous amount about the power of relevant content to attract and retain audiences. We should all be reminded of the days when we willingly paid for this content. The publisher and its team would spend countless hours with marketers and their agencies providing insight on how their advertising and marketing dollars could be optimized within these environments to drive acquisition, retention and greater sales and prospects. I remember the passion that we had in making our case directly to the marketer. While there were frequently battles between the selling organization and the customer agency around who “owned” the client relationship, the bold among us never let this perceived barrier prevent us from carrying the message. We felt an obligation to our customers to provide this level of insight and direction.

Within the DNA of the publishing giants in our industry is a legacy of leading, informing and educating not only consumer audiences but the marketing community. I have lobbied long and hard for the opportunity available to media companies to build integrated operations that leverage this foundational insight and provide new solutions, platforms and services to their customers in the digital age. I never believed that the legacy agency world; despite appending their core business models with “digital divisions” would really embrace a business model that reduced their production and media fees in such a dramatic way.

This would be a time where bold action would require passionate vision and investment to remake a industry. Heck, I did more than talk and write about this idea, I actually rode the elevators up to corporate offices of more than one publishing empire to plead this case. Many scoffed at the idea of building an integrated digital marketing services agency within their company. They questioned the plausibility of the concept, that they could extend their knowledge and insight as trusted advisor into optimizing the new tools of the trade–email , search, social media, web development etc. I remember several instances of gently being shown the door.

It is why I treat recent news and developments around organizations the likes of Hearst and Meredith with great enthusiasm. Rumors around such acquisitions provide some level of vindication. Of course the critics, pundits, industry analysts are quick to over analyze and nay say much of this activity. Some question whether media companies will get “cold feet,” many being quoted coming from the private equity and business broker business. Some wonder aloud about the relative merits of these transactions. Some point to the fact that “agency holding” companies have looked at various targets and walked away when the bidding got more strategic in nature. Proof positive, they argue, of the poor judgment in these moves.

I greet these developments with childlike enthusiasm. I must admit that at times I felt a bit like that madman camped on the grassy median on Park Avenue vociferously proclaiming to all that would listen about impending doom. “Repent!” he shouts. “There is still time!” he declares. Many pass him and laugh, still others criticize, while some actually stand there and listen for a moment. It appears that within the executive offices at some publishing companies that there are those who are not only listening, but acting. They have mustered the courage, conviction and passion to take bold action.

This is just the beginning. What lies ahead is perhaps the greatest challenge. It is as if we have acquired a collection of puzzle pieces, a Rubik’s cube of sorts. Success will be measured not solely on the financial ability to acquire the tools, what is required is the intuitiveness and insight of integrating and building this new definition as integral to the very fiber of the media company. There is much work to be done from a marketing, positioning and selling standpoint. The cultural issues and interpersonal dynamics are substantial in getting this done. The need to recreate a sales organization that can truly adopt a consultative approach that leverages a new and exciting array of interactive platforms and technologies will be a tremendous hurdle. Conflicts may arise between client agencies concerned with media company invading their turf. (We know times have changed when Meredith is names “Agency of the Year.”) Building a culture that continues to push the envelope from a technology and platform development standpoint will be a new initiative for these organizations.

However, there is no choice. The Brooklyn in me is smiling these days. Amidst the stagnant air of the last 10 years, a gentle breeze is blowing. I for one am excited. There should be no cold feet. FINALLY there is bold movement in the right direction. Let’s hope that it continues and that it gains momentum.

Congratulations to all those who have the guts to remake themselves.

“Who at the best knows in the end the triumph of high achievement and who at the worst, if one fails, at least one fails while daring greatly. So that your place shall never be with those cold and timid souls who know neither victory nor defeat.”

Just do it.

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Hi, My Name is Scott and I’m your Customer

Dear Marketer,

I felt compelled to take a moment to write you a letter introducing myself. My name is Scott Krauss and I am your customer. It is my hope that by writing you this letter I can provide you with a bit of insight into exactly who I am and what makes me tick. You can then take these insights and apply them to your marketing communication strategies.  Let me begin with the basics.

I am married, live in the suburbs outside of NYC, have a child on the way and am the proud owner of the world’s greatest black lab, Maya. I work for an interactive advertising agency in NYC, Zeta Interactive, where I am Director of Business Development. I am an avid sports fan, I love the New York Giants and I’m a LONG suffering Mets fan…I won’t even get started with the Knicks. I played football and lacrosse in high school and played lacrosse in college. I love to cook, especially barbeque, smoking anything and everything (particularly a nice pork shoulder)!  I think for now this is more than enough personal information about me. Time to segue into my current lifestyle/habits/interests etc…

Like most of my friends, I grew up on the internet…in middle school it was AOL chat rooms and now it’s Trillian, where I can manage all three of my IM accounts. The internet is at the very core of my everyday life and influences what I do, how I buy, where I go, everything. I have not purchased a CD in over 10 years. I use Netflix to rent and find new movies. I also stream movies to my computer lying in bed, while my wife watches anything and everything on Bravo I use Kayak.com to research every single trip that I take, always ensuring that I am on the lowest priced non-stop flight. I use email, Facebook, and Twitter daily to communicate with my friends and colleagues. I spend countless hours researching cars on Autobytel, Edmunds etc.before even stepping foot in a car showroom and I know the going rate for a 36 month lease before I even say “Hello” to the car dealer. I got my Kindle on Christmas and have not purchased a single book or newspaper since; it simply does not make any sense to. I also own an iPod Touch and a Motorola Droid Smartphone, I buy and use Apps from both app stores and to top it all off, I will most definitely be in the market for a Tablet Computer….iPad, Slate, Courier you name it, I’m all over it. I LOVE the internet and I LOVE technology.

So that’s basically who I am, what I do and how I do it. Hopefully you paid attention because to be honest…I’m trying to give YOU some direction here. Growing up I was always told that I was special and unique….Am I? Does my profile above sound so different than anyone else my age? From my experience…the answer is a resounding no. The internet and technology plays a huge role in the everyday lives of my Generation, the so called Millennial Generation and an even larger role in younger generations. The internet and today’s social networking technologies are deeply ingrained into our daily lives and have become part of the very fabric that is America. So what is written above is a nice snap shot of your current and future customers. Customers that will almost exclusively prefer to interact with your brand in digital manner, certainly not in the old media world of television, print and broadcast radio.

This news seems to be to be both good and bad….let’s start with the bad. The bad news is that you are going to need to shift MORE marketing dollars online. I know this is a scary thing….heck the internet compared to old media is still pretty brand new. And in many ways is still like the wild west, so many channels, so many fads, trends etc…Hard to know where to put your dollars because everything online changes at an extremely rapid rate. Topping it all off, traditional  advertising vehicles still work to some degree. Catalogs still sell products; Direct Mail still gets people to sign up for credit cards and of course people still watch television and it is still a tremendous medium for reaching a large audience. It’s a very tough thing to take dollars away from what has been working for the past 30-40+ years and put them somewhere completely new and rather unknown to you. But the times they are a changing, and if you want to continue to be where your customers are and engage with them in a relevant dialog, you’re going to need to make some aggressive moves online. Because your competitors are facing the same problem and the first one that figures it out is going to have a huge competitive advantage.

Now onto the good news….for which there is plenty. Using myself as an example, I can tell you that right now, today, you have a major opportunity not only to increase sales but to cut costs. Most companies have figured out that they need an online presence and their strategy ends right there. Just being online is not going to be enough to cut it. Again using myself as an example….take a page from the Amazon.com or iTunes play book; they both understand what I have purchased and recommend additional products that they think would be beneficial to me. I cannot tell you how many accessories I have purchased from Amazon because they took the time to tell me what else I might like based upon products that I have purchased. Same goes for iTunes; I have found great new music that I likely would have never found without their Genius functionality, which uses my transactional history to recommend new songs that I might like. If you are not leveraging your transactional data to communicate with me as a unique customer….Then I’m sorry but you are going to lose my business. There are too many other companies that put effort into being relevant for me to waste my time with you.

Here’ some more good news! I prefer to be communicated with digitally. That’s right, digitally! No phones calls, no direct mail…meaning no coupons, no catalogs and no letters with credit card offers. I hate all of them, and the environmental impact of all those wasted offers that go into my trash can is downright upsetting. So right off the bat you are getting off on the wrong foot with me. I also hate receiving direct mail offers for products I have already purchased; this to me is horrible example of waste, both financial and environmental. So where is the good news in all of this? Well the good news is that these methods of communication can all be performed digitally; all you have to do is ask! Let me repeat that….All you have to do is ASK! Today most permission based marketers are asking only a single question:

“Would you like to receive special offers via email?”

That’s about as far as most go, sometimes I will be asked as to what my preferences are and that is literally the end of the road. If you simply just asked me, “How would you like us to communicate with you?” I would tell you – Digitally. Here is a side by side comparison of current marketing techniques vs. what I would prefer:

There it is….your digital blueprint. I hope my letter to you has conveyed the following two points:

• You will need to create digital communications strategies.
• There is a tremendous amount of money that can be made/saved by going digital.

Without doubt there is quantifiable evidence that the relevance of communications directly correlates to an increase in ROI. So as you become more relevant to me, I will spend more money with you, pretty simple math here. The less talked about aspect of this whole premise is what was highlighted in bullet point #2, saving money. Digital costs a mere fraction what it costs to do anything in print. An email costs about .002 cents to send vs. .44 cents for just for ONE stamp, that is just a stamp too, no envelope, paper printing….you get the point!

In conclusion I want to thank you for your time Mr./Ms. Marketer, I hope you enjoyed my letter and I hope I was able to provide you with some valuable insight. I very much look forward to hearing back from you in a timely, relevant…digital fashion. Hopefully I was able to not only cut costs but help you drive incremental revenue as well. Just remember, all you have to do is ask!

Sincerely,
Scott Krauss

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Just Not on Weekends

You know that slogan that has hung in USPS offices and depots around our country: “Neither rain nor sleet, nor gloom of night, nor hail shall keep the postman from their appointed rounds.” Well, it seems to be headed for the scrap heap.

Just this past week, the Postmaster General, John Potter, reported to a Washington meeting of congressional staffers a bevy of bad news. Seems that unless the congress acts quickly… the USPS is estimating that they will lose $238 billion over the next 10 years.  Yes, BILLIONS of dollars in LOSSES in the coming decade.

What is going on here?

Potter claims that in just the past year, the USPS has seen a drop in its signature product; first class mail down 26 billion pieces and, as such, that the agency has lost $3.8 billion during that period.  The forecast is, according to the Postal Service, that the decline in first class mail volume will only grow steeper in the coming years. The agency finally admits that is it “unlikely” that mail volume will “ever” return to pre-recession levels. Potter does believe that he can turn things around with the help of lawmakers… who basically will allow him to change the game in terms of customer service and delivery. This includes an end to Saturday delivery… more layoffs … more postal office closings around the country, etc.

If there is any humor in all of this… it is the fact that the Postmaster General enlisted the help of Boston Consulting Group and McKinsey, spending $4.8 million for research to create “50 options” for turning the dire conditions at the Postal Service around.  I don’t delight in the fact that taxpayer money is being used to overanalyze the current market conditions. Once again, there are groups of individuals in our economy that continue to act as if the digital age is a passing fancy, and govern as if there has not been a fundamental and irreversible shift in human communications. As much as some of us want to opine and reminisce about the nostalgia of yesteryear…the I ongoing belief system that communications of all kind, whether interpersonal or commercial ,will revert back to the 1980’s is foolhardy at best….dangerous in the most extreme.

The fundamental problem with the USPS is that people just like you and I are joined with the majority of consumers who are paying most of our bills online. I can’t remember the last time I put a 42 cent stamp on an envelope and paid a bill.  Technology has devastated the core of first class mail which has always been bill presentment and payment. The ease and security built into linking your checking account with online bill pay is not debatable. It is fact.  If anyone believes that the generations to come are going to return to the old method of paying bills….it’s just not factually accurate.  I know… I know… there will always be people who will challenge this view by saying “not everyone” uses an EZ Pass when paying bridge and tunnel tolls.  Not everyone who smokes dies of cancer.  Not everyone that eats too many calories gets fat, etc. However, I would believe that my friends over at Boston Consulting and McKinsey wouldn’t need to spend a lot of consulting time proving out that this trend away from print and postage is only gaining steam as we move forward into this decade.

The fact is, email and social media have had a profound impact on the postal service. Think about the number of emails that you send to friends and colleagues during the average day. It’s incredible. All of that traffic on Twitter and Facebook and other locations on the blogosphere that used to be postcards, greeting cards and letters from home that carried postage. Just think of the fortune it would cost you today to put a stamp on every communication you have with a friend, colleague and family member.  ALL of those communications used to go through the postal service. Now… communication is real-time…. 24/7 and accountable. No need to wonder whether the recipient received the message. Everything in the interactive age is instantly trackable.

Marketers are getting it as well. As costs of print and postage rise… and the data that documents the acceptance and preference for digital versions of catalogs and direct mail pieces mounts…a perfect storm has been created. In a challenging economy, and with tightening margins, marketers continue to work on innovative and cost efficient means to acquire, retain and build the lifetime value of their customers. With each passing year… their target customer becomes more of an interactive consumer. Yes, there are still folks who prefer printed catalogs and direct mail pieces. However these print vehicles delivered by the postal service are no longer the primary commerce connection.  Direct marketers can simply not afford to continue to spend the money they do as their audience shifts away from this medium. Sending more into the postal service mail box has not proven to be cost-effective. Rising costs on postage and printing versus shrinking margins and a highly competitive marketplace mean cost cutting and more efficient media mix is in order…. now.

Sadly, I cannot offer any real solutions to the Postmaster General and the USPS. I believe that the best that they can do is right size their organization for the market reality. The discussions around closing down post office real estate around the country can do much to lower costs. Shifting the post office facility inside of supermarkets and other retail chains makes a lot of sense. Anything that can be done to make the services…more “self serve” would be a step in the right direction. I would accelerate those moves to save as much cost as can be.  Arming more businesses with their own postal meters and machines makes a lot of sense.  And while it might seem like heresy… I believe that with all of that cost cutting, the USPS needs to bring down the cost of first class postage as an incentive for a new breed of communicators to explore new ways to leverage this service in new ways.  The USPS needs to join forces with the DMA to promote case studies on the power of postal delivery.

Do I think that any of this will work for the long term?  I don’t.  I believe that the paradigm shift in human communications that we are living in…is profound and irreversible. Yes… there will always be outliers to changes in behavior… but as marketers and business people, we need to store our Pollyanna memories of days gone by in the closet and confront the new reality. We need to lean in on the interactive tools that will allow us to build the businesses of the future in new and exciting ways.  Instead of denying and bailing out… we need to go back to work in creating and innovating new ways for displaced employees and business models to remake themselves in the new world.

The end of Saturday delivery is only the beginning.  It’s time that those in denial woke up… and started confronting the real issues of life after the postal service.

Al D

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If It Doesn’t Sell It Doesn’t Work

I will always remember George Holtane. When offered the chance to work at Foster & Kleiser, a Metromedia company back then, I jumped. As a recent political science major, graduation meant a momentary celebration before the hard reality of work and the requisite need for money set in. Twelve thousand dollars a year was a lot of money. “We are going to teach you everything you need to become successful in the billboard advertising business,” said George. After a three-month indoctrination in Maspeth, Queens, mostly making leasing and roof leak calls, I was promoted to the Lexington Avenue New York office. At 485 Lex, the sales and creative team held court.

I remember vividly some of the tenured billboard sales guys…Joe Chizzini, Ray Amato, Bob Moran… telling me, ”Listen kid, keep your mouth shut and we will teach you this business. Don’t ask too many questions.” George Holtane and the cigar-smoking Dick Itanaga were two of the best creative directors in the billboard business. Dick was the brasher of the two, having little tolerance for sales types.

George had the dry humor and demeanor of Bob Newhart. Dick, George and I became fast friends. I guess because I wasn’t the typical know-it-all sales guy. I was just a “kid.”

I would love to spend time in their offices. In the days before computers, these guys were true artists, and their offices had the light boards, easels and clip art books to prove it. They made magic happen on a daily basis. George would lament to me all the time, “Those guys doing print advertising have a larger landscape to work with in order to get the job done. I have seven seconds.” He’d continue, “You are traveling down the freeway at 65 miles per hour and I have to grab your attention and sell you in seven seconds. “

“We get paid to sell stuff,” said George one day. “All of this creative work doesn’t mean anything… unless it sells.”

It was as if a light bulb went on in my head. If it doesn’t sell, it doesn’t work.

George never did win a heck of a lot of awards or accolades. He could have cared less. His creative work did sell A LOT of stuff for clients—and that was good enough for him. The many days following in my career placed me in midst of many creative agencies and directors. In all honesty… there have been times when I have found myself at odds with creative directors so obsessed with their craft that they miss the Holtane axiom. It’s not that I don’t appreciate theatre and humor in messaging. It’s just this peculiar problem that I have had all of these years. Seems like I am always questioning whether all of this creative design, copy writing, set design, etc., in the end actually rings the cash register.

I have also observed over the years that the mere thought of questioning most creative types in our industry was to be viewed as pedestrian. (“Surely you don’t understand the nuances of and the role of advertising.”) I have received more than a few “scarlet letters” as a result of having the audacity to question the performance of certain ad campaigns. Back in the advertising Stone Age, there was little measurement or analytics to measure effectiveness. Heck….in a thriving economy (remember those days?)…no one really cared a heck of a lot about performance metrics. Great campaigns were “worth the money.” Everything seemed to be selling—who cared whether or not it was because of a winning creative strategy.

There is no need to rehash the state of advertising and our economy in 2010. Suffice to say, this is age of efficiency, accountability and measurability in all aspects of advertising and marketing. To think that marketing and creative directors can perform their crafts ignoring performance metrics is foolhardy. And yet…I continue to get incoming from a band of creative directors who seem to be lost in a time warp.

Note to all you creative types out there: before you get all hot and bothered, please understand that I believe fervently that quality and relevance of messaging is central to selling more stuff for our clients. Back in the old days, creative directors were held in the loftiest of thrones within the advertising arena. Not only did they understand how to create engaging and entertaining campaigns regardless of medium, they seemed to be the only ones in the agency that knew anything about customer need. (I know that there are some of you folks who relish in the nostalgia of those days.)

In the world that we live in today, creating and designing campaigns with little or no desire to monitor effectiveness with the robust suite of analytic and performance tools available to you is criminal. We are here as professionals to provide our customers with superior service. We are charged with the responsibility of understanding our customer’s market sector, competitors and customers’ needs. Chief amongst all responsibilities is using client dollars in the most cost effective manner to “sell more stuff.”

Frankly…if it were me…I would have my analytics team sitting right next to the creative team. In the new world of advertising…your best partners would be this crew. A team that could provide historical insight on the effectiveness of various combinations of content, design, frequency and medium in moving the sales needle for your customer. Nothing wrong with being left-brain focused and high-minded about the creative process. This is in no way intended to limit the level of ingenuity and experimentation utilized in creating campaigns. It’s just that agencies need to be accountable in a new way for the bottom line inside our shops. The days of hiding behind industry plaques and awards given by other creative director associations are over. Awards are nice….but your customer wants results.

Perhaps the revolution needs to start in design and journalism schools. Courses that focus on leveraging customer profile and performance data as a foundation for creative development and execution. Reality demands a much tighter connection between analytics, design and performance. It’s pretty simple: leverage as much audience and historical data as a foundation for your messaging and design. Execute your campaign, and then be ravenous about analytic data about all aspects of the campaign’s interaction with your target customers and prospects. The tools are available today for real time performance updates.

Be in testing and tweaking mode continually, always monitoring performance and transforming campaigns to improve performance metrics. Imagine the day when you and your creative team make your next presentation to your client and demonstrate that you understand their success metrics in all areas of their marketing campaign. When you stand up and show the methodology and data that was leveraged to develop concepts as part of an ongoing learning and adjusting philosophy at your agency. The delight when you report that all of this hard work in learning and monitoring has resulted in a campaigns and executions that have sold the customer more stuff.

On that day….you will have known what George meant so many years ago.

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Digital Agency 2015: Predictions for a Changing Industry

There is little doubt that we are in the midst of one of the most profound paradigm changes within the world of human communications. The incredible and unrelenting shift of consumers and business to the internet platform continues to have a profound impact on an expansive array of related strategies, businesses and individuals. Everywhere we turn these days, there are examples of those who, having been faced with this change in the fundamentals of human connection, have failed to adjust their overall strategies to compensate for the new world order. The road is littered with organizations which have been caught up in a state of denial and have been penalized severely for their lack of innovation and creative thinking. While there may be bailouts for some industries, our own—the marketing and communications arena—is feeling the full force of this change and the casualties are mounting up. The only answer here is a radical transformation of current agency thinking and business model.

The root cause of this turmoil has been the fundamental shift in terms of consumer media consumption patterns away from legacy vehicles –the likes of direct mail, magazines, television, newpapers etc. –to a suite of interactive platforms. The agency model business and profitability model has been built on a foundation of several fee structures. Both inexorably tied to the media outlets that have been the focus of this work. Agencies have always received placement fees as a percentage of media for schedules run in costly platforms like television, newspapers, radio and magazines. Supplementing these media placement fees has been the core creative capabilities that have served to define and differentiate agencies from each other. Whether Ogilvy or Della Femina, creative directors have always been the rock stars of traditional agencies. Individuals who understood more than the unique selling propositions of their customers value offering; they had the unique ability to craft marketing execution in a format and manner that engaged prospective customers in a deep way creating brand awareness , preference and loyalty. Marketers were willing to plunk down major creative, consulting and production fees commensurate with the respective media platforms to execute the creative vision of these agencies and directors.

With an economy that for decades seemed to be on autopilot, marketers paid little attention to the cost value relationship between campaign cost and execution fees. Sales and profits seemed to be growing as a step function to overall media spending. Budgets burgeoned. Agencies increased the size of their human capital to attend to their ever supportive customer demand for new plans and strategies. Agency research departments were sure to provide clients with a steady diet of industry statistics to bolster the overall philosophy that spending aggressively and broadly to boost overall brand awareness and preference was the right thing to do. I remember those days clearly. There was very little attention paid to concepts like channel relationships, merchandising and any sense of return on investment. Few realized that the foundation was being laid for our current crisis back then. I remember being ridiculed for even questioning the relationship between dollar spend and actual unit sales generated. Not important… I was scolded.

Of course in the early 90’s the world began to change with the rise of a small and inconsequential media platform called the internet. Surely this would be the playground for the technological elite and nerd population. A small segment of the consumer population would embrace the new platform… there was no need for alarm. Some traditional agencies added interactive wings to their organizations to address the need for website and banner builds. Always being careful to relegate this discipline to secondary status within the overall agency P&L. If a customer wanted “interactive” the agency would provide the capability. In that way the legacy agency could still insulate the core legacy media P&L from any thought of dollars shifting from their clients legacy media schedule to this new platform. Surely there would be incremental budget dollars available to support this new initiative. No customer would be foolish enough to fund this distraction with dollars putting the core strategy “at risk.” The age of denial gripped the agency and marketing community at that moment. No one would accept that a day would come when that “nerdy” platform would become the pivot point for all media and communications. Even today…many believe that legacy media is going thru a “cycle,” and that someday…the pundits who are evangelizing about a return to legacy media will be “proven right.” The media landscape continues to be littered with the remains of those whose denial of reality caused not only their own demise…but that of their customers.

The Perfect Storm Comes to Pass
The stage had been set for the perfect storm. An economic recession, shift in media consumption patterns and an omnipresent era of denial collided and threw the entire industry into chaos. In every paradigm shift, the market provides for those who embrace new thinking to profit. Who would have thought that a couple of “egghead nerd types” would redefine the advertising marketplace? And yet that is exactly what Google has done to the marketing and advertising community.

With no loyalty to the old world…the folks at Google realized a fundamental requirement for consumers was their need to find products, services and information quickly and efficiently. The pre-Google internet spoke about surfing the web…an aimless journey from one website to another. Google saw the futility and frustration of a consumer who knew that the internet provided “all of the answers”…but was disorganized. Google moved past the Yahoo’s and Microsoft’s, creating a new way to find information that delighted its users. The team also figured out a dynamic way to monetize all of this searching by offering advertisers positioning at the key intersection between need and solution. The rest is the history of the systematic draining of billions of advertising dollars away from legacy media of all kinds into the search world. Dollars once within the control of traditional agencies. Funds that were once commissionable to a wide array of agencies…now suddenly gone…never to return.

Audience movement away from legacy media platforms…meant declining circulation and viewership. Advertisers have been very democratic with their media spending. Where the consumer goes…the dollars must follow. The challenge in all of this, of course, for traditional agencies has been the relative cost of interactive media and production. Placement fees for interactive media pale in comparison to that of legacy media. The major production costs around building and executing campaigns in this new world are a fraction of their broadcast grandparents. Coupled with the financial dynamic has been a dearth of agency personnel who truly “get“ the interactive pallet of offerings. Traditional agencies continue to hear the sucking sounds of budgets leaving the legacy media world to the new suite of offerings with no solution in sight.

In light of the market conditions…we are seeing two strategies deployed. The first is that many agencies are racing to add “interactive” to their names. The hope here is that if we call our agency “DiGuido Interactive,” we will be perceived to be in the center of this phenomena. The second strategy being deployed by mega-agency holding companies is a consolidation move. Here the thought is that if we build a bigger boat…we won’t feel the pain as much. The flaw in that thinking reminds me of those who were arranging deck chairs on the Titanic. My prediction is that without dramatic change in the next 24 months…we will be witness to the a era of demise and devastation within the agency business and profitability model. In the next five years…many will not survive. When we ring in the year of 2015 only few from today will be leaders.

Change is Gonna Come
The fundamental changes in the agency model that must happen in order for your company to survive may seem radical today. Like it or not…we must deal in the real world and realize that the consumer has embraced a new communications channel and will not return to the legacy world. With each passing year, those consumers that were the stalwart of the purchasing population are dying off leaving behind them a new consumer that doesn’t look at legacy print, radio, broadcast in the same way as their ancestors. To believe that your agency will continue to pivot its strategy and business model supporting the old world is a road to ruin and death. Interactive, which was always a stepchild to your legacy media practice, must now become center stage in the DNA of your company. You must start with planning strategy, media and messaging in and around the interactive platform. Legacy media can still play a role in your overall plan…but must be relegated to a supplemental role in the overall plan.

Data to Reign Supreme
One of the benefits of the economic recession has been the rise of a new level of tracking, analytics and accountability in the media and marketing world. To think that your agency can continue to command significant fees for consulting , creative and media placement without the proof that this strategy and dollars are generating the return on investment that the client demands are foolhardy. All that you recommend must be tied directly to the proof that dollars spent are moving the needle in the desired direction for your client. Take all of those creative accolades and awards down from the shelves in your lobby. The client today and much more so in 2015 really doesn’t care about all of them. Ring the cash register. Grow sales and profits for your customer in a cost-efficient and effective manner and you will be a survivor mid decade.

Never before will there be greater demand on the need for your agency to build a robust analytics and research discipline. As we have said in the past; your customer will demand a new level of accountability. As such, your research dept must work with internal planning and creative teams to insure that all of the work being done by your company for your customer is being monitored against performance and accountability standards. Planners cannot plan without an understanding of measurability and metrics of success performance standards. Creative and messaging teams cannot create without an obsession on monitoring in terms of the relationship between creative execution and customer engagement metrics. The age of prima donna and or ego driven production will be long gone replaced by a new breed of creative type that is thrilled when his or her work generates the desired result. Just think about how many folks are standing in line to plunk down billions of dollars within search engines because it makes the cash register ring.

Small is the New Big
With smaller media placement and production fees in the new world, the agency of 2015 will have a much smaller human capital component. The challenge for the HR department of your company will be to create an organization of subject matter experts in all areas of the new media world. Clients are going to demand efficiency, optimization and accountability in their programs in the years ahead. They will no longer tolerate “junior” staff of any kind within your agency. Gone is any concept that you and your team will “learn on the customer’s dime.” Clients will demand excellence from all staff members.
The new account and media team will be asked to be experts of their subject area and more importantly students of the customer’s competitive arena. Clients will rely much more on your agency to craft new and innovative strategies based on a comprehensive understand of market dynamics. All of this means that a new commitment to being students of the marketplace is in order.

The Consumer as Creative Director
The challenge to the Creative Director and team in this new world is life changing. Gone are the print and broadcast landscapes. There are a new generation of producers and script writers everywhere encouraged by the YouTube venue. The internet generation is being bombarded by creativity from all angles. The competition for consumer attention has never been more intense. All of the past credentials are now called into question. Your agency must recruit a new breed of creative and copywriting talent. Hiring evangelicals who understand how to tap into the new platform and engage fellow consumers in meaningful and directional dialogues. This may be to some of you a group of rambunctious “kids” who didn’t go to the journalism schools and/or haven’t been schooled in any of the legacy rules about what can and/or can’t be done. This the age of “no rules.” Our own research shows that consumers are less patient about campaigns. Campaigns seem not to have the same staying power that they once did….”Where’s the beef ?” Today’s consumer grows tired quickly and bored even more so. Creative folks inside your agency need to be in a constant state of innovating and creating.

Technology Takes Center Stage
Technology has always played a tangential role in the overall mix of your agency model. While I have debated many on this topic; my passion remains strident in the belief that the real winners in 2015 will be agencies that have altered their model to not only host technology solutions of their own making. I will go further that the two worlds must collide to form an agency model that builds scalable technology platforms that provide their customers the ability to centralize all of their interactive needs within one shop. Does this mean that your agency will need to have a commitment to building and maintaining an email, search engine marketing bid management, social media monitoring digital publishing, mobile messaging deployment and analytics engines. The answer is YES. Many will scoff at such a suggestion, reasoning that there will always be others who are subject matter expert based companies in these disciplines that can be contracted when the need for the solution arises. Two basic fundamental flaws in that strategy; control and margin.

Agency 2015 needs to answer the demand of the customer for optimization and accountability in the overall marketing and media plan. Without a collection of technology platforms that can share data in real time and measure collective performance…there is no way to answer the customer effectively. Have you ever tried to get disparate technologies …much less different companies talk to each other and share collective insights for the betterment of a customer ? Virtually and literally impossible. You must own up to your technology responsibility in order to succeed.

Somewhere in the last decade we lost our way in terms of the goal of our agencies. Methinks that there have been times when we forgot that we are running a “for profit” business. Our investors and employees should demand greater revenues and profits from our company. Partnering with third party vendors for solutions dilutes our margins from step one. Surely we are not blind to the fact that the new model will demand technology investment which may be sizeable. Owning versus leasing will insure revenue and profitability stability so necessary for our company in the years ahead.

The Model Goes Global
While we are on profitability….while many have read Friedman’s tome on the World is Flat…so few have truly explored and/or leveraged the global workforce to provide greater efficiency and effectiveness in providing economical solutions for our customers. Don’t believe those who continue to throw stones at offshore strategies and employees. It will take work to build the right structure and model for certain. The alternative is reduced profits and marginalization.

Charting a New Course
Very few who occupy the leadership chair at agencies today will make the cut in 2015. The new agency CEO will be a renegade and tireless cheerleader for his company and his people. He will push his people to the limits of their creativity and innovative thinking. He or she will bring new levels to performance standards in all areas of his company. The leader will look past the Fooz ball tables and funky décor of the agency to its DNA as an agent of transformation to the agency’s client. Flair will not be lost…but there will be a heck of a lot more substance. Employees drawn to Agency 2015 will have a new sense of commitment and dedication to their customer responsibility. Will the fun atmosphere and collegial atmosphere of the agency disappear? I doubt it. A new definition of fun will be a hallmark of Agency 2015. A confidence and pride in knowing that what has been delivered truly provided the customer with the solution needed to achieve their goals.

The market has provided us chaos and turmoil. It rests on all of us to move out of our comfort zones and begin anew. Tear down the old and pursue will dramatic zeal and courage this brave new world; knowing that the doubters will be everywhere spewing the FUD that characterizes those who are the laggards in our industry.

There is no white knight coming to “save” our industry. I plan on being an exciting force in the agency world in 2015. I hope that some of you will join me.

Until then.

Al D

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Relationships Matter

It’s a complicated world today…between internet, mobile, and social technologies; as a marketer it’s often difficult to know where, when and how to target your prospective customer. There seems to be an endless supply of ad networks as well as contextual and behavioral targeting solutions all promising the same thing: Target Marketing. Each solution, designed to give advertiser’s the ability to target, re-target and re-re-target their prospective customer, based primarily on behavior.

Entire industries have been built on the technologies that support these efforts. Are these methods effective? Of course they are, Forrester Research predicts that Display Advertising alone will grow 10% by 2013 in terms of marketing spend. So obviously there is ROI to be had by investing your marketing dollars here.

However, things seem to be changing yet again. Last month Ad Age Digital ran an article titled “More CPG Players Embrace E-commerce” which explained major players such as Proctor and Gamble and General Mills will be rolling out e-commerce initiatives in 2010. Big deal? Yeah, I think so. Considering P&G to date has revenues of about $500 Million across their current e-commerce sites and CEO Bob McDonald thinks that he can get to 10 times that. $5 Billion in revenue from e-commerce is certainly nothing to scoff at, even when you are doing $80 Billion a year in traditional sales.

So why would a CPG company like Proctor and Gamble want to go head to head with their own channel partners? Mr. McDonald was kind enough to provide that answer: “The eventuality is a one-on-one relationship with every consumer, and obviously e-commerce needs to be a big part of that.” Yes that’s right…the world’s largest CPG brand just identified that they need to create a one-on-one relationship with their customers.

The value of a transactional database proved to be too alluring for companies like P&G to pass up. By providing customers a away to directly interact and purchase, P&G is laying the foundation for creating a database filled with rich customer data. And with that data they can begin to create those one-to-one relationships with their customers. They will know what you bought, what you like, what you searched, what you viewed and what you dislike. Then the CPG companies can begin to communicate with their customers is an extremely relevant fashion. (Considering myself a bit of an email buff, I cannot see how email is not a tremendously valuable tool here to help CPG companies communicate with their customers.)

And if that wasn’t enough…it gets better. No longer does P&G need to have their products listed side by side with their competition as they would say, in a retail email. No, they have complete control of the branding and product listings in their messaging. Having complete control of that messaging allows marketers the ability to create a brand experience with their customer base that will foster the one-to-one relationship.

This is the essence of what we preach at Zeta, we are what you would call relevance evangelists. Look up any Al DiGuido article and you will see what I mean. Today, marketers are sitting upon a wealth of information…some choose to do nothing with it and some are getting the picture that in order to compete in today’s world you need to be relevant or you are going to be left by the wayside. Time, money and effort need to be invested to create these solutions however I think the alternative (being tuned out completely) might be a bit more costly in the long run. So when you see companies like Proctor and Gamble and General Mills, who for decades never sold directly to customers turning to e-commerce to build relationships with their customers…Hopefully you get a slight glimpse into the future. The future is digital…the future is relevant and the future is why relationships matter.

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How to scare up a traffic boost this Halloween

With Halloween fast approaching this coming Saturday, along with it comes the usual wave of last-minute costumers eager to make a cleaver, funny or scary splash on the 31st. “Halloween” is consistently trending on Twitter, and there is an exponential jump in Halloween-related searches, so now is the time for savvy marketers to pull something out of their bags of tricks.

Zeta Marketing Solutions for the Halloween holiday

• Top seasonal retailers HalloweenMart and Spirit Halloween have a web-based retail environment in dire need of a refresh.
  • HalloweenMart suffers from a bland layout, with no notable call-to-action, compounded with oversized images that further distract from the product listings.
  • Spirit is at the opposite end of the spectrum, having an overwhelming number of category listings, field entries and a harsh color scheme.
    • Create a revamped website based entirely on a dynamic usability study, whilst conforming to their established brand identity and product lines.
    • To drive additional traffic, the retailers should create some branded content for distribution directly to customers
      • Halloween-themed twitter profile templates (downloadable wallpaper, icons, color layout instructions, etc.)
      • A photo-editing suite that “Creeps-out” a portrait you upload, inserting some Halloween-themed images (smoke, bats, pumpkins, etc.) on top of your picture
• While costume retailers seem to be fairly active on twitter (smart move) the other important aspect of Halloween (Candy) has gone unrepresented.
  • Hershey’s, arguably the largest candy brand worldwide, has no active twitter presence. While they do have a corporate profile, there have been no updates at all.
  • Mars also has failed to create a Twitter profile.
    • Both brands should take obvious first steps (Create optimized twitter profiles, update constantly, and link to profile on website homepage, etc.)
    • Tweets should highlight seasonal recipes created solely with their products.
• Costumeideazone.com; the first site that appears in organic search results on Google under “Halloween Costume Ideas” should make better usage of their company Twitter account to build brand awareness and drive traffic to their site.
  • Currently the account has only 13 Tweets and 14 followers
  • To foster fans’ creativity; Costumeideazone.com should host a Twitter based contest where users submit their most unique, original and creative ideas with the winning costume being furnished by costumezone.com or a partner
    • The contest will be cross-promoted on the costumeideazone.com where users can submit their entries and ultimately vote on the winning idea
• Costumeideazone.com should offer weekly newsletters via email marketing throughout the month of October in anticipation of their highest traffic month
  • Capture visitor’s email addresses by partnering with a site that actually sells costumes such as halloweenexpress.com to offer discounts and specials

Posted in Brand Strategy/Creative, Email Marketing, Online Advertising/ePR, Online Marketing, Social Media, Technology, Uncategorized, Zeta Buzz | No Comments »