April 2010

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Advertising ain’t what is used to was (a little Southernism I made up). Creation of big selling ideas by highly paid creatives and marketing people, broadcast to millions via TV, radio and print was the ad business.  Today, thanks to technology, the ad business is undergoing a diffusion like never before. Digital agencies, though not yet offered a seat at the big table, are new and important players.  Google is the most profitable advertising agency in the world and Facebook is hot on their trail.  And when I say “mobile advertising” does any one company come to mind?  That one is going to be huge…but it’s still to play out.

Buy or Build?

Big traditional ad agencies clearly see the need to offer digital, social and mobile but are asking themselves “Do we buy or build?” Right now they’re doing both: hiring someone smart in each discipline and using them to select cottage industry players who are truly immersed.  Better than last year, which was all “Go out and get me a subservient chicken.”  Or “Find me those nerds who built the US Weekly Facebook poll.”

I’ve long thought that mid-size agencies were poised to win in this diffuse advertising world, but now I’m not so sure. True, they can more quickly parlay a powerful branding idea into a market-moving integrated campaign but the model may not be extensible.

Bud Cadell is right when he says the old ad agency model is broken. It will take open minds, forward thinking, experience, software, an understanding of brand building, and lots of money to fix the process. I’m of the mind that the successful model is more likely to come out of MDC Partners than WPP.  It will be fun to watch though. Peace!

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Spotlight on Social Media was held yesterday in NYC, put on by the Participatory Marketing Network (PMN) and Direct Marketing Association (DMA).  There were a couple of important takeaways every marketer should think about. 

Intent.

Search is still important, no doubt, but it’s a little 2008.  Immediacy – what’s happening now — is the rolling thunder these days, so services like Twitter and Foursquare are the rage but the marketing future is something Rapleaf’s co-founder Vivek Sodera calls “intent driven” applications. Think of a suped up Four Square To Do tab. Facebook will certainly build an intent-based app and others in the VC pipeline will emerge, but just know intent+social+search+moblie is going to pay out lotto style. 

Unanonymous

I know, I know it’s not a word. But it’s a better word then unanonymize, which is the word that clanked like a dropped crowbar off Mr. Sodera’s tongue during his presentation.  Hee hee. That said, it’s a word that wonderfully describes what Rapleaf does. Rapleaf crawls the web and creates single records of an individual’s behaviors, activities and associations.  And surprisingly, it’s not that scary.  They do this using your email address and a cool piece of software. In email or direct parlance they append records using the social web. When I asked to be unanonymized, the Rapleaf software generated 100 of my web proclivities, the first of which was something called “Social Care” a membership I did not recall.  All the rest were spot on. 

Facebook

Facebook also presented at Spotlight and mentioned its 60 million daily logins put prime time television to shame. Sean Mahoney’s case studies of marketer successes were very impressive and prove that Facebook is the “new” digital. Its targeting capabilities are phenomenal.  There are specialty ad and marketing shops opening up just to handle Facebook-enabled selling and they’re worth looking in to.  It’s a cottage industry on the way to becoming transformational.   

Others

Other smart companies worth mentioning include Acxiom, a behemoth company that also transforms social data into social profiles (for targeted marketing), Cisco which has a neat B2B app in its NowVan program (like Kogi BBQ trucks for routers) and Air Miles a rewards program out of Canada, trying hard and having very good success. 

 Michael Della Penna of the PMN and Conversa Marketing and Neil O’Keefe of DMA deserve shout outs for empanelling a great program. Peace..it together!

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David Carr published an interesting piece in today’s New York Times about Nick Denton, his Gawker Media tech blog Gizmodo, and the lost next gen iPhone.  According to Carr, the blog post generated 3.6 million hits on Gizmodo – a site averaging 90,000 hits a day. 

 (Not too long ago, during the tough economy, Mr. Denton decided to pay his staff of writers based upon hits.  The more papers you sell, said the crusty old news man, the more money you make. When the pay-per-readers story hit the wire, Mr. Denton was vilified and some good writers left. Buh-bye, said he.)

The writer who broke the lost iPhone story was well paid for her/his day’s work and Gizmodo’s brand made it to Ohf-rah (Oprah). Eastman Kodak, who serendipitously bought all the ads on Gizmodo for the day, reaped mad dividends in terms of reach. (What’s the opposite of “make good?”) 

Mr. Denton’s maligned approach to paying writers for audience portends things to come in social media.  Media will be bought based on eyeballs.  And media will be bought based on transactions. When this equation makes it to traditional ad agencies you may even find the creative output changing. That is, some of the ads won’t be built for portfolios but for consumer interest and traffic. Social media will soon be monetized based upon consumer interest and sales, not the rate card. And it will be exciting to watch. Peace!

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Back in the 1700-1800s (in the U.S.) if you needed stuff you either made it or went to the general store.  The Sears, Roebuck and Co. catalogue was the next marketing innovation (1888), showing pictures of products and published prices, allowing customers to purchase by mail. Among the 322 pages in the catalogue published in 1894 must have been products didn’t sell and had to be replaced. The birth of ROI? 

Television

The next massive marketing innovation was television. Television commercials which began in earnest in the 1940s became the most popular, effective form of advertising. But can you imaging trying to track sales to media and production back then in the very beginning? “Where’s the ROI? How do you measure this stuff?” Mad men. 

The Web

Fast forward to the Inter-nech. Banner ads and ad serving allowed us to count clicks. 2% click thru rates. Whoo hoo. Click to buy. Whoo hoo. But not everything could be bought over the web. (Discussion of that for another day.) CTRs diminished and web display ads became, so said the salespeople, a branding mechanism.

Social Media

Enter social media.  And consultants. When consultants out-number practitioners you know the market is in flux. The Altimeter Group, some very smart people let me just say, created a social media presenttion ‘splaining how to measure social media via a marketing analytics framework. Here are some of the measurables: share of voice, audience engagement, conversation reach, active advocates, active influence, advocacy impact, customer problem resolution rate, resolution time, satisfaction score, plus a couple of metrics tied to gathering input for product innovation. What’s not mentioned here, something Messrs. Sear and Roebuck might have added, is sales.  I love consultants ( am one) and the Altimeter Group is growing like a dookie, but until they and all of us tie these type of metrics back to da monies, we’re just making paper.

A smart client at AT&T once said to me, “we collect all this data now we have to do something smart with it.”  That’s business. That’s return on strategy. Peace!

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A new study published by McKinsey suggests that the quality of brand management is eroding around the world. One data point suggest over half (55%) of corporations polled are seeking to improve brand management. The culprits are globalization, staffing inefficiency, the increased use of digital media, matrix organization structures (many, rather than one boss) and the perceived need to put more specialists on brand teams.

In a separate study, the CMO Council published this: 41% of client companies said they were working in a “moribund organizational culture“.  So brand management needs to be fixed.  

How about the agency side?

The CMO study suggested 35% of brand companies are unhappy with the integration and alignment of the agency networks with which they worked — so, agencies aren’t faring much better organizationally. At the 4A’s Jay Chiat Account Planner Awards this past year, there was some grousing that clients are fed up with having as many as four strategic planners in a meeting when all the agencies are brought together: one from the AOR, one from direct, one from digital, one from promotion. Add to that all the specialty services agencies must now provide and you can see the garden is growing out of control.

It’s for this reason that mid-size shops have a leg up in delivering inline communication programs. (Not offline or online.) Mid-size shops have the ability to share and play together better — and they have better oversight.

It may be counterintuitive but organizational innovation (and efficiency) is most likely to come from mid-size shops (read KBS Partners, Crispin, Straw Frog) than from the big boys and girls. And when that happens, the marketing companies will hopefully follow suit and better integrate. Peace!

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Within a couple of years many newly manufactured clothes will contain inexpensive invisible data tags.  Much like a scanner tag you find on packaged goods these tags will contain brand name, style, store and price.  What will make them unique, however, is that they’ll be scannable via phone applications.  See a cool pair of shoes on the street?  Just point-and-click and immediately know what the item is. Think of it as a paparazzi for clothing thing.  Sure it will be annoying…but we’ll live with it.

As this service gets more sophisticated and cheaper and the geo-location and privacy implications resolved, manufactures and marketers will be able to aggregate data and read that in Brooklyn, 200,000 people are walking around in Chuck Tailors on Friday but only 75,000 people on Wednesday.  We’ll know black tee-shirts outnumber red 2:1 on Monday and sundresses are really worn on sunny days.

 And don’t even get me started about clothing tags tied to coupons, promotions, search terms or Twitter codes.  I can’t even process that.  For that add two more years. Peace!  

 PS.  This is but one chapter in my worldwide inventory theory.

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I’ve written before about Google’s “culture of technological obesity” saying I think the company is taking on too much outside of its core mission.  Phones, productivity apps, the list goes on and on. The reality is — the dirty little secret no employee will readily admit — is Google is an advertising company.  (Google Doubleclick.)  Eric Schmidt and his peeps know this but it doesn’t play well at cocktail parties. The technology badge is what they wear most proudly.

Of the $6.78B in revenue announced this quarter, the lion’s share was ad generated.  Now don’t get me wrong, I love Google.  I’m not a hater. They need to succeed.  Google really is changing the world for the better. But they will Divest or Trivest at some point.  The company is a 3-ring business circus.  And because one of the rings — most profitable ring – is advertising, and because Google hasn’t been putting all of its efforts into providing innovation in advertising, it will lose market share. Ad revenue will still grow, but Google will lose market share. My bet is Facebook and Twitter will take share. Facebook is already doing it and Twitter has just begun.

 Advertising is about search, yes, but also about referral and context and point of sale (POS).  Twitter may have a leg up by combining all four.  To all the developers at Chirp…advertising still is da monies!  Peace!

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