Manhattan Marketing Maven

10 Things That Won't Happen in 2012

As the year winds down, allow me exercise my older, crankier, opinionated and contrarian side in looking at the year ahead. Here are 10 things that won’t happen in 2012 in no particular order. 

Mobile Ads Will Explode.  Consumers still either resent them or can’t exactly figure out how to use them. Brands can’t efficiently buy them or measure ROI or engagement value. Look for the bulk of ads to remain embedded in games and in apps. 

Facebook Will Grow Exponentially. The focus will shift from 800+ million users to the quality of the experience and the virility of sharing. Brands will figure out how to get more of their messages through the EdgeRank filter and how to prompt brand advocates posting original brand-oriented messages and/or passing along posts crafted by brands. What is said, by whom and to whom, will replace the fan count as a measure of brand page success. 

QR Codes Will Blossom.  Too many different or not enough code readers, no technical standards, low consumer penetration and poor customer experience will doom this technology. Magazines and others will continue to use them as a badge or signal that they are tech forward, but few consumers will buy that act. Even if you build it; they will not come. 

Groupon Copycat Competitors Will Succeed. The bloom is off this rose both in terms of local merchant satisfaction and the inability to scale and customize the product or the deal for national brands. The business model was set up for onesies at the local level. It cannot easily accommodate brands with thousands of stores or franchisees. 

Retailers resent the 50/50 revenue share. And they aren’t seeing enough upsell to justify the steep price cut used as a buying lure. Plus, they doubt whether coupon redeemers will become repeat or regular customers.  Gross volume will drop. There will be a shakeout among the me-too and also-ran players. Social networks, payment vendors like PayPal and major online merchants like Amazon and eBay will emerge as Groupon killers. 

Appetites for Apps Will Grow. With 1 million available apps and more than 100 million downloads from iTunes alone, nobody needs any more apps. The number of apps downloaded and used once or less is ridiculous. Consumers will edit their apps into two buckets; useful time savers and entertaining time wasters. Anything else will go by the wayside. New variations and new competitors will emerge. Some will gear content and user experience to reflect different expectations and behaviors for geared specific devices like iPhone, Android, iPad or other tablet formats. But if an app doesn’t help or doesn’t distract it’s a goner. 

Banners Will Die. In spite of being widely ignored, brands will continue to pump dollars into banners primarily because they can. Banners, like billboards, are a media format every marketer understands and one that media agencies love to buy. And even though the metrics prove that banner blindness is endemic and that there is no positive ROI for using banners to build awareness, marketers will spend against them to demonstrate their commitment (to their bosses) to the digital medium. 

Mobile Payments Will Reach 50 Million Subscribers. In spite of the incredible utility of mobile payments, the lack of technical standards, limits on smart phone penetration, competing technical and processing systems and tentative uptake by consumers and retailers will retard the growth of this channel. Mobile payments will not take off with a hockey stick curve like Google+ did. Instead we will witness a fog of uncertainty and doubt as the competing interests fight it out, make confusing claims and build daisy chains of retailers and allies. When the battle is settled and a single standard approaches, mobile payments will generally replace credit cards, wallets and checking/debit accounts. 

Email Saturation Will Occur. Everyone uses it. Most of us opt-in. Retailers rely on it. Email is the ubiquitous reliable retail channel that consistently delivers personalized offers. Email will become even more segmented, more targeted, more tied to expressed preferences and purchase histories and more integrated into social networks, search and loyalty channels. SPAM has pretty much been controlled. The email workhorse will continue to perform as expected and measured. 

TV Budgets Will Migrate to Digital. Not! TV remains the only way to simultaneously accumulate mass audiences and quickly tap into the mainstream culture. Digital channels complement, enhance and supplement TV. In some segments, TV viewing takes place on digital devices and is tweeted or posted in real-time.  But marketers aren’t seriously reallocating media dollars anytime soon because they are committed to both the reach and the content that TV provides. 

Zuckerberg will Give Up Social Engineering. The debut of Timelines is proof positive that Zuck & Company have a vision, an agenda, a platform and the willingness to impose their perspective about how we should think about and share our lives. Maybe he thinks that since he invented Facebook and convinced us all to use it, that he has the right to shape the form and content of how we express ourselves. Don’t expect user-centric design or functionality from Facebook. Expect them to re-design and impose their vision whenever they like and present it as innovation and improvement. If things run true to form, each new iteration will provoke considerable user push back and privacy concerns. 

 

Lessons from the Disruptive Dr. Ross

Dr. Robert Ross, one of the great marketing characters of our time passed this week at age 92. Dr Ross (nee Rosen) was a self-made man, a showman, a huckster and a visionary who took on the medical establishment… and won. I had the opportunity to work with him on the launch of Ross University Medical School, the first for-profit medical school.

Robert Ross was bigger than life. Physically big with a Foghorn Leghorn gait and distinctive voice, he was a cross between P.T. Barnum, a courtly uncle and Don Quixote. A natural people person, he could charm a humorless eastern bloc bureaucrat, a Washington lobbyist or a young account guy. He had friends in every sector of our society and all around the world.

He knew how to manipulate the system and he did things that others thought were down right crazy like importing men’s suits from Romania or hawking an herbal concoction to reduce snoring. He saw the opportunities of globalization and constructed 3-way deals that no one thought was possible. And he successfully made a frontal assault on the entrenched medical establishment that was dead set against an off-shore for-profit medical school. His legacy is the thousands of fully trained, credentialed and certified doctors and residents now at work across the US.  

He taught me that there’s nothing more powerful than a disruptive idea wielded by a disrupting personality. Brands that make noise and even brands that polarize get disproportionate amounts of attention and affection than brands that play it safe and follow the category leader. It’s a lesson that we often forget in the monkey-see monkey-do world of digital marketing.

2011 Economic Outloook

Allow me to get a jump on the year-end economic pundits. Digital marketing strategies in 2011 will be played out against a background of macro-trends in the US culture and the economy: Here is my pessimistic, common sense short term forecast for macro-economic activity affecting brands and marketers.

1. People are searching for things that are real and reliable. They are looking for something/someone to believe in. Skepticism rules. Brands must be authentic, genuine and real to get an honest opening for interaction.
2. Time seems to be moving faster and faster with attendant growing stress levels. We're on a merry-go-round and we can't control the speed. Brands that provide simple and proven solutions or comfort and direction will have an advantage.
3. The economy will be in shambles for the next 18 months. Europe’s troubles will catch up with us. Fundamentals have changed; but the implications aren't yet clear. Caution will rule most sectors. Downward price pressure will continue into the foreseeable future.
4. Everyone is nervous and worried even if they are keeping a stiff upper lip. Unemployment will not be fixed anytime soon. People will watch their spending very carefully. Firms will cherry-pick, prune and selectively upgrade their staffs.
5. Consumers will indulge themselves in idiosyncratic ways; often by splurging on things big and small. Positioning your brand as an affordable or permissible indulgence will resonate.
6. There will be ferocious competition for attention, mind share, actions, downloads, opt-ins, usage and any form of customer engagement. Copy-cat tactics won’t work and even novel ideas will work only once.
7. Consumers will realize the limits of technology as they embrace smaller, faster, more complex devices. Cost and bandwidth are the gating factors. Early adopters will lead the way but overall uptake will be tepid in spite of spectacular brand wins.
8. Toys will not make life easier or make people happier.
9. A significant segment, especially at the high end, will continue to chase the newest, coolest, stuff.
10. Everyone will have boat loads of data even though they are not be sure how to read it, measure it, apply it he or keep it secure. Privacy will become a contentious issue on a broad scale.
11. Clients will only want to spend what they absolutely have to. All kinds of inventive measurement approaches will be employed to justify spending.
12. There is a growing popular sensation that things are much more screwed up than we’ve acknowledged. The new Congress will exacerbate this feeling and few solutions to economic issues will emerge from Washington. Brands are resigned to finding ways to muddle through, hoping that unforeseen forces won’t dislodge, displace or dis-intermediate them.

 

 

Sales Funnel Dies

The sales funnel, the oldest, most illustrated and beloved marketing paradigm passed away today of old age. Originally, constructed to approximate the rational buying sequence for B2C and B2B customers, the Funnel leaves no immediate heirs. 

Shopping was never really linear. Prospects take multi-directional, multi-dimensional and idiosyncratic paths to surface needs, identify buying criteria, list potential solutions and fall in love and purchase. Easy digital access to product information, testimonials, video demonstrations, user-generated or professional reviews, peer opinions and comparative pricing tools creates a more dynamic, unpredictable and emotional landscape than the Funnel ever portrayed. 

The implications for marketers and merchants are that marketing strategy, messaging and media must shift. The number of inflection points has multiplied. Rather than aim messages or media units at a particular point in a reasonably predictable cycle, marketers now have to array their brands in ways to cover a much larger, expanding and morphing digital Main Street or mall and interact rather than interrupt. 

A shift in consumer behavior to digital channels was documented in a recent study of more than 2000 US shoppers, titled “2010 New Shopper Journeys Survey,”  conducted by Carat and Microsoft Advertising 

The two big take-aways are

1. Brands have to engage customers across 3 or more screens. During a buying cycle and use each channel and each digital meme to its best advantage. Brands will meet customers in several settings during the purchase time frame so that specific aspects of the brand story and value proposition can be parsed through specific digital assets. 

2. It’s Not Over with a Purchase. Customers almost instinctively use digital and social media to share and validate their purchases, review and recommend products, comment on customer service and plan subsequent shopping expeditions. In the survey, 48% of responders recommended a brand by name and 30% recommended a retailer. And while this fundamental behavior has always been true, technology accelerates the speed and scale to increase the impact on future sales.  

The Funnel is dead. Customer behavior is in-flux. The search for a new paradigm has begun.

 

 

 

 

 

16 Predictions for 2010

The dawn of a new year is an opportunity to look ahead and guess what will happen next. Some of these predictions might seem obvious, some reflect by own perspective or pet peeves and others just might catch you by surprise.  Thanks to Sherie Anderson who helped with research and front line analysis.

These 16 predictions and prognostications are offered with wishes for happiness and health in 2010. 

The Recession Won’t Go Away.  2010 will be as challenging financially as 2009.  Credit and employment will be tight. Every expense will be scrutinized and delayed if possible. Temps will trump full time players and everyone in every sector will be looking for a deal. Downward price pressure, enforced by bean counters eager to save their own jobs, will rule the marketing sector and probably the entire economy. Emphasis on new customer acquisition will change slightly to retention because it’s cheaper and has a much greater ROI impact, though since so few marketers are good at retention, expect more propaganda than productivity. 

Traditional big ad spenders – banks, automotive, retail, airlines and CPG – will spend cautiously, flap their lips about CRM, experiment with social media and find a hundred new ways to package and promote discounts and deals. B2B marketers will hunker down and stick to stuff that works with an occasional foray into social or mobile media to establish bragging rights behind a steady beat of plain vanilla efforts on the CRM front. 

Facebook Will Flourish or Flounder.  Everything turns on their ability to maintain momentum, avoid more ham-fisted privacy flaps and show marketers how to engage and interact with members in ways that don’t feel like advertising. MySpace, with 70 million users, and Friendster have considerable reach and assets even though they’ve been eclipsed by Facebook’s fast march and PR blitz. But frankly no one really knows why Facebook has stormed ahead and in the absence of a sustainable formula, that growth and popularity could disappear as quickly as it come about. There are no doubts that Murdock’s minions and many others are gunning to get back in the game not to mention non-US communities and vertical communities which have begun to show substantial growth.  

Look for a horse race in terms of new applications, new features or new functions and new ways to integrate or manage Facebook and other social media accounts into common work and life flows.  People want to participate but are having difficulty managing different accounts or dealing with the time suck that social media quickly become. A bunch of tools, possibly modeled after TweetDeck, will emerge to organize, manage and connect different social media applications. Along with the tools, expect best practices to evolve for linking your profiles and friendships to achieve specific goals like finding a job, finding a love partner, generating leads or seeding vertical conversations. 

More brands will use social media as standing research panels by asking questions, soliciting opinions or conducting polls and surveys. Some gut checks and qualitative research will move online because you can gather a carefully composed crowd quickly and cheaply and can target advocates, neutrals and competitive users easily. Expect an explosion in A/B testing and even product development testing to take place online and on social media platforms. 

Social Monitoring & Reputation Management Will Grow. In the same vein, everyone will license a data-mining tool like Radian6 and collect the “sentiment” in social media. Interpreting this data will be tricky because the software was built on assumptions and filters that may or may not reflect users reality. But acquiring a tool to mine social media will be the must-have new toy among marketing and IT types in 2012. 

Individuals will soon start agitating for similar tools to monitor their presence, their reputations and their vulnerabilities online. Partly privacy or security driven and partly vanity driven, people are beginning to understand and worry about how they are presented and/or exposed online. The combination of identity theft and phishing threats plus the need to present an appropriate image to potential employers and/or partners will create a need to check what’s online, align what is searchable with who you want to be and  fix or delete the stuff you are unhappy with. 

Sort People In.  The explosion of social media reveals an underlying psychological reality – people want to believe, want to belong and want to be connected. We are social creatures and we want to believe that our lives have meaning, that our actions matter and that we are contributing to something bigger than ourselves. Brands who understand this articulated need and can respond to it or channel it will attract followers, fans, advocates and customers. Brands who can speak passionately about things customers care about can do amazing things. 

Marketers Will Refine Applications for Social Media. Fans sign-up to get deals according to the RazorFish FEED analysis. What isn’t clear is exactly how brands can enter the conversation and display their wares without offending the sensibility of “friends” and others seeking just to connect and communicate. People don’t click on the ads in social networks and they resent brand messages that are artificially shoehorned into their conversation streams. There have to be ways to do it beyond offering to turn on new friends to a discount, but few have been reported. 

Beyond collecting friends, the value of conversations for intelligence gathering, creating content or managing customer service issues is still in its infancy. 95 out of 100 Twitter members never tweet. Looking at pictures seems to be the most popular online activity. And we are beginning to understand dramatic differences in Web and social media usage by gender. Social media is as much about voyeurism and feeling part of things as much as it is about actual participation. Marketers will use all these trends as launching points for campaigns next year. 

Brands will experiment across social media platforms. Some will create major gaffes others will generate viral attention that just might pay off in terms of awareness, preference or sell through. Now that the social channel has been firmly established marketers are eager to understand whom it connects them to and how to use it to achieve business results. The social network that helps brands figure this out and builds creative guidelines and media packages that agencies and clients can understand and sell up the food chain will win massive cash investments. 

Apps Will Shake Out. There are 100,000+ smart phone apps. Most are novelties or crap. Those with scalability, utility and genuine value will be talked about and heavily downloaded. The rest will rot. Given the large number of developers and easy accessibility to APIs, look for a steady stream of ideas that range from even more varied and refined fart sounds to very useful personal utilities to emerge as winners. 

Brands will create endless numbers of apps seeking either first mover advantage or virility. Both will be very hard to achieve. Very few people have sustained needs for single brand or product applications so look for mash-ups and aggregations to appear to super serve vertical needs. Imagine a single app with all the known diabetes drugs on it or an app that searches the net for all the shoes in your size reflecting your style and price preferences. 

Mobile Media Will Putter Along. Strangled by the technology, policies and pricing of the big telecommunications carriers, mobile media will not break out in 2010. Instead a few more brands will attempt to manage the Rube Goldberg-like configurations necessary to mount a mobile campaign that connects online and offline media and/or distributes coupons or discount codes. At this point mobile media is too much effort for too little pay-off for both marketers and consumers. Look for lifestyle brands to try the hardest but don’t expect inter-carrier compatibility, micro-payments, location-based campaigns, trigger promotions, live event interactions or other phone-based utilities to come into being at any scale in the next 365 days. 

We Will Feel the Need for Speed. The Web has gone mobile and increased smart phone penetration will create monstrous demand for mobile bandwidth. WiMax and other bandwidth solutions will soar as we demand more, faster access to sites on the go. This will also require more memory, more agile devices and will require marketers to optimize sites for mobile access and usage. I’d invest in mobile-enabling software because 2010 will see a great shift from static sites to those configured and designed for mobile use. In a year no one will look at sites that break up, look bad or load unevenly on iPhones, Blackberrys or Droids and everyone will expect to view videos, listen to music and quickly search and download data from everywhere.

Search Will Get More Specific. As people demand specific answers not just websites, search will become more refined even as it expands to include video, images and social media postings. Anticipate that vertical search engines will begin to deliver faster, better more accurate results that begin to challenge Google and siphon off search dollars in selected industries. Look for advances in data mining and in the way search engines process huge volumes of information. AI and natural language advances will begin to make themselves known, though the hype will continue to outpace the results. Keep your eye on Wolfram Alpha, which is breaking new ground and lighting a fire under search experts in many ways. Don’t be surprised if someone emerges out of nowhere with a completely different approach to generating search results that turns the market on its head. 

Analytics and Integration Will be Endlessly Discussed.  But no real progress will be made because both topics are directly related to organizational design and politics. Both topics are intensely threatening to the status quo. These topics are perennial strawmen for all manner of gurus, executives and advertising specialists to debate. In reality there is little real appetite for attacking either subject among marketers or ad agencies, though both devote massive amounts of lip service to the cause. 2010 will produce some new products and some new evangelists; another round of sound and fury signifying nothing. 

Email is Old Reliable. E-mail continues to reign as the most accepted and effective digital marketing medium. Privacy, opt-in, deliverability, formatting and creative best practices have bred widespread consumer acceptance accompanied by decent sustained click-thru rates and purchase ratios. Widely understood and widely used, there is research indicating that heavy social media users are equally heavy e-mail users, even though social media has begun to replace e-mail for personal communications among some (mostly younger) consumer segments. E-mail opt-ins routinely grow as do the full range of responses and interactions from consumers. E-mail lists are becoming more available and easier to merge/purge or match back.  Expect the e-mail barrage to continue with increasingly sophisticated segmentation and personalization. 

Grab Your Video Camera. Video is the meme of choice online. It seems that everyone has and uses his video camera to upload all kinds of content online. In 2010, if you can’t be found on YouTube and its competitors you will be invisible. Look for considerable competition among sites vying to rank second. Watch vertical video sites attempt to increase their visibility, if not their utility or viewership. Video will move between and among channels. A YouTube video can easily appear on TMZ or Access Hollywood and visa versa. News organizations and reality shows will mine online video routinely. 

Also look for new ways to emerge to tell stories in video. There appears to be a very broad tolerance for homemade videos and video with very modest production values. Videos will get shorter and be better tagged. Many will be clickable and some brands will try to create (or re-create) a branded online serial aimed at their psycho-demographic target. The Holy Grail is still the video that achieves altitude and is virally passed to zillions around the world. 

Syndication Trumps Destination. Expect brands to seek out syndication opportunities to distribute fully produced videos and to peel off segments and share them with a wide array of sites both to intercept audiences and to improve search disposition. Content and the distribution of content will act like media luring in new customers and validating existing clients. Brands will re-purpose, de-construct and mash-up assets like videos, images, copy blocks, polls, quizzes, white papers and other key assets and seek out venues to distribute them elsewhere on the web with link-backs to corporate and branded sites. This will tactic will simultaneously increase the trolling area for prospects and customers and positively impact on natural search results. 

Get in the Search Game. Natural search has nothing on Dungeons & Dragons or World of Warcraft for mystery, suspense, competitiveness and unpredictability. In fact the best practitioners are the same guys. Search is the most intriguing marketing game by far where brand strategy meets technical prowess influenced by intuition and aggression.

The semantic web, policed by Google, is still the Wild West where fortunes are made and lost in a nanosecond and where skillful manipulation rules the day. But the business impact of search is not frivolous. Given the widespread use of search and its relationship to brand awareness, preference and purchase, mastering the semantic arts, understanding the need for careful tagging and operationalizing the “taxonomy is destiny” mantra is critical for every brand. 

Brands Demand Orchestration. Going to market is no longer a matter of crafting messages and buying media. Brands need to craft communications strategies that take into account the channels, the media and the target mentality then plan, design, parse and orchestrate the messages over time, geography and channels in the face of competitive activity and increasing noise-to-signal ratios.   We live in an always-on 24/7 mass media culture where the number and variety of stimuli is too many to count and where everyone has set their personal filters to filter out the vast majority of messages, offers and ideas. Technology has enabled both the flow and the filtration, so marketers have to have a keen sense of the environment and the audience mindset in order to identify, reach, engage and persuade customers. This is an act of composition and orchestration that is fundamentally different than before and which requires a much broader view of audiences, media and creative assets. 

Deeper Data Dives. It is finally occurring to brand marketers that a broad range of things can be predicted with accuracy on the basis of data and behavioral modeling. The recession has forced consideration of these “black arts” heretofore practiced only by direct marketers and data wonks that have developed a science around CRM and behavioral targeting. The types, quality and richness of consumer and B2B data collected legally and in compliance with privacy laws is staggering. Used for good by skilled data guys, these terabytes can dramatically improve customer engagement and satisfaction. Look for more brands to try deeper data dives in 2012 yielding better business results, though the number of true believers will remain the same.

The Marketing Job Market Sucks -- But Don't Panic

Advertising and marketing have been devastated and decimated in the continuing recession. Nielsen reports ad spending is down 15.4% the first half of 2009 compared to last year. Everyone has a bunch of friends out,looking and anxious.  Every agency and marketing organization has shed jobs and many will continue to pare down staff and freelance slots.

Jerry Bernhart, ace DM recruiter, surveyed 418 unemployed executives during the first week of September and found that searches are taking longer than before and that marketers' were out of work almost twice as long as the national average 28 weeks versus 15.5 weeks. 

More than half of unemployed ad folks reported looking for a new gig for 7 to more than 10 months. And as you might imagine, the higher the rank and the salary sought; the longer the search. A third of those seeking $200K plus salaries reported being "on the beach" for 10 months or more. There is plenty of reason to worry.

But, says my friend Kimberly Bishop, one of Businessweek's top 100 recruiters,don't panic and don't do crazy, desperate things that can sabotage your search. She cautions candidates to “differentiate yourself and stand out from the crowd but not by being obnoxious or by being a jerk.” 

Kim’s Top 5 search killers are: 

1. Don’t force yourself on someone’s calendar. Don’t invite yourself using Outlook. Don’t pressure an assistant. Don’t show up unannounced. Don’t make threats or demands. Don’t send gifts, novelties or packages. Don’t beg. 

2. Don’t pretend you have a relationship with a recruiter. Don’t drop executive names. Don’t say you are a distant cousin. Don’t masquerade as someone else to get through the phone screener. Don’t pretend someone the recruiter knows referred you. Don’t pretend to be a survey-taker or a customer service representative. 

3. Don’t spin or spill a sob story. Don’t discuss your conditions, your medications, your mortgage, the state of your relationships, your immigration status or your creditors. Don’t suggest that there will be dire consequences if you don’t get an interview. Don’t whine. 

4. Don’t go over the top. Don’t send over-the-top letters, videos or creative presentations comparing your career to famous actors, professional athletes, national political figures or Nobel Prize winners. Don’t exaggerate or claim credit for others’ work. Don’t brag.  Don’t use profanity. Don’t sing, recite, rap or whistle. Don’t make up heroic or mythical stories. Don’t denigrate co-workers or former employers. Don’t share information or materials that are proprietary to former employers. 

5. Don’t ignore the basics. Craft a perfect resume. Prepare for the interview.  Anticipate the questions.  Have your elevator pitch ready.  Cite examples of how your experience matches the job description.

There are lots of good reasons to freak out. But it's a waste of time and energy. It's not productive. Marketing continues. Firms need entry-level, mid-career and senior experts to help them. The smart players know they can gain share by advertising and marketing when competitors hesitate. 

There is an enormous pool of good will, advice and potential contacts in your network. Don't be bashful. Use what's available to you and never let them see you sweat. Good luck. 

 

 

 

It's Time to Celebrate Jerry's Kids

Along with the French, I love Jerry Lewis.

The schmaltz, the cheesiness, the has-been performers singing long-forgotten big-band songs, the B rolls of guys in white coats holding test tubes, the drum rolls and the tote boards that will conjure up the ghost of Ed McMahon, the lame local anchors and the tear-wrenching appeals all signal Labor Day to me.

I imagine a great national catharsis focuses on Jerry and his kids as I participate in the morbid health-watch to see which diseases and which side effects of treatments Jerry himself will display each year. Jerry and MDA have staked out a position and for 30+ years they have delivered on it and raised zillions to fight muscular diseases. There's nothing better and nothing more reliable and nothing more comforting than watching Jerry and his shtick on the Love Network including the parade of firefighters, convenience store owners, oil companies and other random sponsors presenting those over-sized checks at random moments during the Labor Day weekend.

So this year don't just sit there -- dial the number or type in the URL on your screen and help Jerry!

Happy Labor Day.   

Measuring Marketing Magic

Marketing remains one of the elusive frontiers for performance management. For years marketing performance measurement (MPM) vendors have been working both sides of the aisle -- the CFO and the CMO -- in an attempt to define and measure marketing's magic and graft onto the marketing department the same fiscal discipline imposed throughout the corporate structure.   

For the last eight years VisionEdge Marketing has been surveying MPM issues and their 2009 report entitled, "Closing the Gap Between Marketing and Business" concludes that 

1. Marketing still has a long way to go to align with the business it supports and measure performance
2. Marketing departments still lack the skills to run themselves like a business
3. When  the marketing department measures; its not measuring the right customer-centric stuff.

You can get a 20% discount on the full report by clicking here.

These are sobering conclusions especially in a recession when every dime of marketing spend is under intense scrutiny by corporate and brand bean counters looking to hold back every marginal idea and expense. It also reinforces the stereotype of marketing guys as frisky kids masquerading as grown-ups in charge of the fun factory and accountable to no one. 

In practical terms, it seems obvious, at least to me, that the 23 month average CMO tenure documents the fact that CMOs are not playing the game as CEOs and CFOs see it. Few have invested in dedicated marketing operations people, essentially a COO for the marketing department, and even fewer have bought MPM packages or vendor services. And while a CMO's ears glaze over with the first mention of so-called "best practices" nobody is really happy with what gets measured or how they figure out how money spent by marketing impacts on the objectives of the business. 

What has caught on are dashboards. There are lots of them ranging from simple graphs to dramatic colorful eye-candy. But these devices are more show-and-tell than useful gauges of business success. Intended to be a "connection between marketing and business which facilitate fact-based strategic decisions", they are more CYA than FYI. The proof of this is that in spite of the dashboards, few top decision-makers see a clear correlation between money spent on marketing and advertising and sales or profitability goals. Herein lies the challenge -- connect the dots convincingly with enough data and intellectual rigor to withstand questions from the finance folks. 

What gets counted is political. Marketing guys count inputs. Finance guys want them to count outputs. There is also a bias toward counting the sexy acquisition programs rather than the under-loved and lower key retention programs which have a much more predictable impact on sales and customer satisfaction.

Since these are not new issues, I quizzed VisionEdge co-founder Laura Patterson , a serial entrepreneur who learned her marketing and measurement stripes in 14 years of service as a marketing executive at Motorola. Laura believes that CMOs need to build-into their consciousness and their tables of organization "a culture of accountability that's native to marketing." Rather than fear measurement marketers have to think about what they are trying to accomplish and craft measurement methods at the same time they craft big ideas.

Laura argues that this orientation starts with looking at the marketing activities that drive business value rather than simply measuring activity. If marketing programs are tasked to find, sell and retain customers, measurement must demonstrate how they did it or didn't do it and take a stab at explaining why. In her experience CFOs are less interested in exactly hitting the numbers than in marketing guys thinking and planning for results using a disciplined process which includes advance planning and post-campaign measurement. Among her clients, Laura reports a huge shift in perception when marketers create a process and set performance targets at the same time that they develop messaging and campaigns.

For top management, in Laura's view, measuring performance versus plan is table stakes for efficient operations and control. Marketers have to plan for expected results measured in business terms -- leads, revenues, share or market, margin contribution or repeat customers. Measuring the efficiency of the production process or the cost-per calculations of media efficiency are secondary. 

Bottom Line: The C Suite yearns for CMOs to tun the marketing department like a business. The 2009 Survey shows we're not even close.

 

Are Focus Groups Finished?

Four significant brands -- Tropicana,. Motrin, Facebook and the SciFi Channel -- made serious missteps recently; moves clearly the result of flawed customer research. Journalist Cathy Taylor and creative executive George Parker see this as evidence that focus groups --the dominant customer insight tool used by ad agencies -- are dead.

As a stand alone or dominant tool I agree. As part of a multi-dimensional research or brand planning matrix I'm not so sure.

The premise behind focus groups is to gather target customers and carefully probe their feelings, their  allegiances and their loyalty to the brand. Often sitting behind the one-way mirror you can glimpse the branding process at work. Frequently you can hear the language and the emotions that brand loyalists and those completely unaware of brands use to describe your product or service. 

We've known that these groups are inherently limited for years. There are significant challenges in recruiting that even $100 bucks and a steak dinner can't overcome not to mention the groupthink dynamic that can easily set in with a strong personality or an uncontrollable blabber in the room. Yet there are still very few tools that enable us to see, hear and watch our target customers as they interact with the brand and each other. 

Part of the over reliance on focus groups is a by product of the fact that traditional agency planners have little real training in survey techniques or interrogation methods and even less understanding about how online surveys, social media and guided web surfing can round out a picture of how customers and prospects perceive or interact with a brand. In a 24/7 cyber world no one in their right mind would rely on small numbers of self-selected subjects sitting in a small dark room to determine what a brand should say or how to say it. 

In too many cases focus groups were the stick or the carrot wielded against agency creatives. Groups often determined which execution was recommended but more often substituted for the absent backbone of creative directors. Today in hours, we can A/B test and almost limitless number of creative executions online and get thousands of gut reactions from any number of customer subsets that are statistically valid.  Relying on focus groups even fto intimidate creatives is folly.

Effective brand planning is dramatically more complex and must account not only for an exploding number of customer touchpoints; it also has to understand and mine the customer experience to have any validity. The idea that ads are the brand is ancient, even if far too many brands and too many agencies still believe it. The artificial reaction of small numbers of customers, advocates or prospects is way too unstable a sample to risk significant media investment or brand exposure. Focus groups are flogged by those who lack the skills or the imagination to create more robust insight for brands. So in this regard, focus groups are finished.

In conducting research and undertaking brand planning, you must consider and/or include most of these eight dimensions to get a fair understanding of your customer base or the audience you wish to influence.

1. Purchase histories and CRM data

2. Web analytics and online behavior or click streams

3. Customer service themes and frequent issues

4. Data from standing or ad hoc online survey panels or fan/club sites

5. Traditional media metrics -- ratings, page views, 800 number volumes, time spent data

6. Guided web interviews and task-oriented surfing, eye-tracking, heat-mapping

7. In-depth 1-on-1 high value customer interviews

8. Focus groups composed of carefully defined audience segments reflect the brand's geographic and psycho-demographic reach

To fall back on flawed focus groups as the bedrock brand insight tool is the prescription for getting it seriously wrong.

    

Managing the Customer Experience

Every so often you have an encounter with a brand that reminds you how little marketers think about customer touch points and how difficult it is to control and shape the customer experience.

And while every agency blabs about their skill at brand stewardship, integrating channels and carefully crafting customer experiences, all it takes is several sequential interactions with a brand to discredit this claim.

CRM  or no CRM, very few brands think through and map the range of customers’ interactions with the brand and the result of these interactions on brand awareness, preference, purchase or loyalty. Branding experts talk about the essence and the expression of the brand but very little of their philosophizing gets built into the plumbing of service delivery and what happens where the rubber meets the road.

Consider my experiences with Empire Blue Cross Blue Shield of New York, administrator of

New York

State

’s Child Health Plus program, over a 5 day period:

1. I get an officious form letter from Nora D. Vitolins-Roullier announcing that my daughter’s health care coverage has been dropped for non-payment. It comes out of the blue as a surprise.
2. I grab my bill file and checkbook and investigate.
3. I call Empire and fight my way through an excruciating phone tree
4. I talk to Mary who tells me that the letter was in error and that everything is fine. “The computer” screwed up the billing. She promised immediate re-instatement and a confirmation letter in 48 hours. She almost apologized.
5. I try to fill my daughter’s a prescription. The system shows us as “disqualified”.
6. I call Empire and fight my way through an excruciating phone tree
7. I talk to Karen who tells me that while the billing error was rectified and we are re-instated, the computer misread my income and I owe $758 for service from January through April 2009. So I now have to pay up to be really re-instated.
8. I carry on.
9. Then I ask if I can the bill. I’m told that I can’t pay the bill till the computer issues me a new bill and that I could call back and pay by phone in 36 hours.
10. I carry on some more.
11. 36 hours pass.
12.  I call Empire and fight my way through an excruciating phone tree
13. I punch in countless numbers, get disconnected twice and finally pay the bill by talking to a human at JPMorgan Chase by phone.
14. She says the payment will post in 24 hours.
15. I get the reinstatement letter by mail.
16. Take 2 at the pharmacy. I get one of three scripts. The other two are disallowed, even though they are the same meds she’s been taking for 5 years.
17. . I call Empire from the pharmacy counter and fight my way through an excruciating phone tree
18.   I talk to Aaron at  8p ETon Friday night. He tells me that the authorization for these meds didn’t transfer when Empire changed PBM providers on January 1. And while he didn’t know why, he would investigate and call me back, but I could not get the medication till at least 48 hours later on Monday and I probably had to have the doctor re-prescribe the meds and get a new prior authorization since the meds were not on the Empire formulary.
19. The bills I paid by phone arrive by mail. I can’t make any sense of them.
20. I mobilize the doctor who calls Empire
21. He fights through an excruciating phone tree and calls me with an OK.
22. I call the pharmacy to see if the problem was resolved. It wasn’t, they tell me.
23. An hour later, Aaron, who I spoke with on Friday night, calls me and says the situation is fixed. He explains he doesn’t know how it got broke or how it got fixed but it is. He volunteers to call the pharmacy and square things up. He does.
24. I call the pharmacy to double check. They say everything is copasetic.
25. We walk two blocks and actually pick up the 2 remaining scripts.
26. New billing arrives by mail saying I owe $843 not the $758 I paid.

Now think about the arc of emotions and feelings that this action sequence might provoke. You pay for a decent service and you count on it. You are surprised that your service is interrupted unexpectedly. You seek service and you are disappointed. You are confronted by annoying technology that frustrates you. When you finally make contact you are treated politely by robots that don’t really know and don’t really help you.  Then somebody surprisingly helps you. You get what you were initially after. They send you a bill. This is not exactly the formula for brand intimacy or loyalty.

Brands need to execute on the brand promise not only in ads but downstream – where transactions take place and where the battle for brand purchase and loyalty is joined. It starts with an attitude. Either you are a brand that understands me, helps me, meets me where I need things or you are not. This can’t be faked or masked by snappy graphics or punchy lines.

I refuse to believe that since everyone hates insurance companies my bruising brand experience was inevitable. Marketers, especially those endangered CMOs, need to assert quality control over all touch points and anticipate the likely service needs and emotional results of day-to-day business. Infusing the delivery system and the customer service system with a genuine brand ethos will pay off much faster and much better than accumulating thousands of online “friends.”