The State of Marketing

Digital. Social. The Age of the Consumer.

We keep reading about how marketing is fundamentally shifting. Every day there are articles and blog posts about the changing relationship between customers and brands. We experience how new technology has changed the game.

And then there’s the reality of marketing. Brought to you with stark contrast in IBM’s Institute for Business Value latest study.  

Here’s what the study says:

• Most CMOs are not using social media to track current customer sentiment
• Most use traditional marketing research
• Most CMOs believe that by 2015 they will have to show ROI on their marketing investment
• Most feel they aren’t currently prepared to provide hard numbers

Maybe it’s not so surprising that they don’t use digital sources to inform their decisions. But most are not prepared at all to respond to the shifting market and to change the way they run the marketing department.

Perhaps even more depressing is the fact that even if CMOs did all of the right things, they have little or no influence on key business decisions, such as new product development, pricing or channel focus. In short, they’re not included on the main things companies do.

One question that comes to mind is: What will it take to remove the CMOs that don’t get it with ones that do?

Or maybe that’s the wrong question, since the other C-levels don’t seem to let the CMO in the room where decisions get made.

It’s further proof why mediocre advertising is still the rage. And why agencies that cater to and empower laggards makes so much money.

I guess we’re going to have to wait for #occupymadisonavenue.

Can Marketing Adapt to a Depressing Economy?

Income inequality is increasing in the U.S. Lower and middle class incomes have declined for the last 30 years, falling as much as 15% since 2007. At least that’s what I’m seeing more and more in the news these days. In the mean time, wealthy people continue to get wealthier. If people are even talking about this issue, it’s mostly in political discussions. However, this skewing could have major implications for the advertising industry.

The latter half of the 20^th century was the golden age of advertising. We’re seeing proof of that in the wild success of the AMC show “Mad Men.” It was a time of growing economic equality and the burgeoning of an American middle class whose wages rose alongside its social ambitions. When you connect that with the growth of sophisticated communications, such as broadcast TV, marketers had a field day promoting all sorts of things. 

It was a time where you could create a commercial and, if it were successful, you’d create the real product to sell.

That world is disappearing faster than we imagine. For those of us in the marketing industry, we’re looking at a world where a very small group of people can afford almost anything, while a burgeoning group of people can barely afford the necessities. It raises a number of practical and even moral questions (don’t run away ad people, you can deal with it!).

The people in the poorer middle and bottom are going to be more and more price and deal driven. They’re not going to have the disposable incomes for luxury or high-end goods, and they’re going to have to buy fewer things, not more things. Recent reports show people fleeing from cable and satellite TV subscriptions, with providers losing almost 600,000 customers in the second quarter of 2011.

People at the top of the income heap do have money to spend but, from a marketing standpoint, they are fewer and fewer. Marketing to them will have to be more pinpointed and exclusionary.

Which raises a question for brands: If part of branding is to create desire and inspire people to aspire (think cars, fashion), is it right to market this way to people who have less and less money to spend? Or maybe we don’t really care (brands really don’t, they just want to sell).

For those non-luxury brands how do you justify marketing in the face of decreasing demand and return? People with less money will want deals, not brand.

This is where social marketing might bridge the gap. As long as people are online that is. Although if they can afford their Internet connection, smart consumers might band together to share Internet subscriptions with their neighbors through WiFi groups. 

People will look for free content and entertainment. They’ll look for targeted offers and deals. They’ll look for recommendations from other penny-pinchers. They’ll want group buying power to lower prices even further. They’ll want advice on how to feel and live well even as their incomes decrease. They’ll want ways to stay healthy, even if they can’t afford organic food and expensive gym memberships.

Social channels offer ways for brands to do this. It’s not as sexy as advertising. It assumes much longer buying cycle. But it might be the only way to build brand loyalty in an era of decreasing disposable income.

It will mean that we marketers will have to lower our sights as well, to less expensive, less flashy and more meaningful storytelling and communications. It will mean that we’ll have to get our hands dirty and help our clients understand the struggling middle and lower classes, instead of the jet setters we’d rather hang out with.

Or maybe nothing will change. Except that more of our clients will go out of business, which means fewer marketers and advertisers.

But the times are changing, for the worse. The question is whether we’re able to tap into those insights and use them in a positive way for people, businesses and marketing.

Who Sets Your Bar?

I just watched the documentary “Fire and Ice” on HBO’s amazing iPad app HBO Go. I’ll save reviewing that app for a later blog post. The documentary tracked the great tennis rivalry between Bjorn Borg and John McEnroe. What struck me most was the effect that Borg leaving tennis had on McEnroe. 

Yes, McEnroe continued to win, winning grand slams and retaining his number one spot after Borg retired. But that retirement also removed one of McEnroe’s greatest motivators: to play (and beat) the best. Without Borg to set the bar, McEnroe became more enraged and ultimately lost interest. 

In your business (and especially in the digital marketing business), who sets the bar for you? Which people or groups perform at such a high level that they motivate you to push yourself to a higher plane? Can you find inspiration through others’ work and success to make yourself work harder and more creatively? 

I’m asking the question after reading a number of comments by creatives on the lack of break through ideas, especially on the digital side. In the past we looked to CPB and the Barbarian Group, among others, to Wow us. Sites like the FWA and even the Macromedia Site of the Day used to inspire digital creative to push the work at every level. 

A friend of mine recently worked on a site that won the FWA award, and she remarked that she wished she had won it three years ago when it still meant something.

The examples these days seem to register a much smaller blip. Yes we’re not building as many intricate Flash sites with expectations of lots of interaction and time spent online. We know better now. We look at socially integrated campaigns that seem to have much more modest goals (perhaps even attainable ones). We’re looking to do more enabling of commerce or connections. That probably has greater value to customers but it’s not as sexy as Subservient Chicken or Come Clean.  

One example recently, which I noticed courtesy of Adam Cohen, was work for Tesco Homeplus. It sprang from an insight that people were just too darn busy in South Korea to go shopping. However, they all had mobile phones and lots of them commuted via subway. So they set up a virtual storefront in the subway, where people could shop through a mobile phone. Tesco then delivered the groceries to peoples’ homes.

 

How about that for a smart, digital and practical solution?

Like John McEnroe, I need my digital Bjorn Borgs. Who sets the bar for you to make you want to be the best? 

 

Pay Attention!

I found this on a blog last week and found it so inspiring I've taped this list up on my wall, and ordered the book.

I plan on presenting it to every client before every presentation I give or idea I share. What strikes me is how seldom marketing departments actual think about these things, let alone do them in their marketing. Imagine how much better marketing or advertising would be if we, ourselves, paid attention to this list.

[Cheers to the A List Apart blog, from which I'm lifting this section below]:

"In his book Brain Rules, John Medina identifies four significant characteristics of attention:

1. EMOTIONS GET OUR ATTENTION
Attention is most easily gripped by emotions, threats, and pleasures: ideas that challenge our deeply-held beliefs, images that shock or arouse us.

2. MEANING BEFORE DETAILS
We want to know why something is relevant to us. Only then will we be willing to spend the time it takes to understand the details of it. 

3. THE BRAIN CANNOT MULTITASK
The idea that multitasking is a myth seems to be well-established by now, although a decade ago it seemed like multitasking was the inevitable future of human consciousness. We are learning to work with, not against, our cognitive limitations. 

4. THE BRAIN NEEDS A BREAK
We believe in giving audiences freedom, even if it's the freedom to zone out or take a break from one part of a talk to focus on another part. That's how people learn."

 

The Art of War (and Marketing)

I was in a meeting a few weeks ago, listening to someone talk about a proposal for some upcoming marketing.

“We’ll open with a media blitz. Once that first phase has settled, we’ll launch a geographically targeted campaign aimed at certain population and demographic centers. We’ll track all of this through our command and control center that will give up-to-the-minute results of our progress.”

It was only after I left this meeting that I realized that this person could have given this talk at the Pentagon, rather than in a marketing meetings. Which raises the question:

Are we really at war with consumers? 

It also raises another question. The strategy and tactics used above describe 20^th century warfare, one that increasingly relied on great distances between the attacker and the attacked. Think of pilots flying B-52s over Vietnam, cruise missiles in the Gulf War, or drone attacks in Afghanistan.

20^th century marketing modeled itself after the 20^th century military model. In combat we’re seeing that model break down. In marketing, it’s already broken. 

Today we talk about asymmetric warfare. It’s where small groups of relatively powerless people can inflict harm, defeat or outlast a stronger adversary. In marketing, we talk about the Motrin Moms and Kevin Smith.

In modern warfare, we’re seeing a renewed need to actually spend time with local populations, building up their communities and helping them prosper as a way to win the military battle.

In modern marketing, we’re starting to see a beginning of an effort to focus on providing value and utility, as well as help to communities, with great help from digital and social media. Big brands have to stop thinking of attacking its consumers with blitzes (watch out London!) and to start winning the hearts and minds of people instead.

Of course this is what brands have claimed to do for decades. They’ve just done it through carpet-bombing and other violent advertising tactics.

How about this for a new year’s resolution, late that it may be:

Don’t use any military jargon in your marketing planning or speaking.
No more campaigns. No more blitzes. No more executions.

Let’s stop being at war with the people we market to. Let’s bet at peace with them instead.

Changing your language has a profound impact. The landscape has changed and so must we marketers. That is, unless the only thing you’re interested in are more medals to hang on your chest.

Put Your Marketing Team (and Your company) on a Mission

The Electrolux “Vacs from the Sea” initiative strikes me as one of the smartest things I’ve seen in years. Electrolux is not only highlighting an important environmental issue, they’re building the solution right into their product. Talk about solving a problem in a way that’s good for people and good for the company. The reason they are able to succeed in pulling this off is because the Electrolux eschewed business as usual and went on a mission to do good.

Too often we see socially responsible campaigns as something separate from the business. Collecting and donating money to needy causes is good but it almost never has anything to do with the core business. Most of the time, we’ve come to see lots of these efforts as Greenwashing and even trying to buy good will.

There’s a huge opportunity to put your marketing team on a real mission instead. The double upside is that, if done correctly, it will help your customers and help grow your business.

1. Solve a problem. A great place to start is to solve someone’s problem. People love solutions. When your company can provide a real solution to a problem, people will have more reason to both buy, and talk about your company.  Lots of businesses started this way. Just look at the Geek Squad. Unfortunately, when businesses mature they oftentimes forget about the problem and focus almost exclusively on themselves and their products. Finding pain points or problems that even tangentially touch your products increases your relevancy. Put your team on a problem-solving mission.
   
   
2. Deliver great service. Look at Zappos or JetBlue. They both offer commodities so instead, they focus on service. Here’s a quote from Tony Hsieh:
   
   “We decided that we wanted to build our brand to be about the very best customer service and the very best customer experience. We believe that customer service shouldn’t be just a department, it should be the entire company.”
   
   He put his entire company on a mission to deliver personal service and they’ve succeeded wildly. If you looked at your customer base, what would be the things they need most from your company? What level of personalized service or care could you give them that no one else can? Put your team on service mission to make them irreplaceable in the minds of your customers.
   
   
3. Make a cause core to your business. That’s what Electrolux is doing. It’s one thing to say we’re going to donate money to clean up the ocean. It’s another to use what you’re cleaning up in your new products. Electrolux is modeling sustainability rather than just talking about it. By integrating the solution into their products, they’re making the product that much more interesting to talk about, especially for the owners. What types of causes or sustainability could you integrate into your products? This takes the idea of “Baked In” to a real level. And it’s one that energizes both your employees and your customers.

This isn’t just marketing babble; it’s a fundamental shift in marketing. It’s a shift from looking inward and talking about yourself to a position of really focusing on other people and what’s important to them. And that’s the insight: people might like brands, but they’re mostly interested in themselves. If more companies can realize that and focus on the external, we’ll see more marketing that makes a difference. 

Social Media or Marketing: Do Labels Help or Hurt?

I read John Jansch article "Why Social Media Doesn't Matter" on his Duct Tape blog last week with great interest. John's point, to me at least, seemed to be that by labeling this type of customer engagement as "social media," we gave marketing departments another reason to marginalize it. It was just another marketing "thing" that they could check off of their list and relegate to the "done" box.

John's right on, of course. Too many marketers read the deluge of articles and blogs, and attend conferences and seminars on why they need to include social media in their marketing mix. By giving it a label we can pay lip service to it at best, and ignore it at worst.

I agree that social media should be a core competency, a new way of doing business and that the label, social media, matters much less than companies and organizations acting in new ways. But I don't agree we're ready to jettison the term social media just yet.

I think Mark Earls is right: We have to change behaviors in order to change minds.

There are a few great marketing people and groups out there, revolutionizing the way they work, with a focus on customer needs and behavior. Then there are the majority of marketers, both late and early. Most of them aren't ready to change behavior or they way they think. Many still go about doing business as usual, focusing mainly on broadcast print and TV campaigns, and trying to dabble in social media without shifting resources or focus to it.

visual from http://suewaters.wikispaces.com

 
That's why the label social media makes sense. It's why the label digital still makes sense. As long as we're trying to connect to digital customers through analog marketing departments, we need to focus on changing behavior, not minds. Social media, digital, social CRM, or mobile may be the way of the future but we need to frame our actions through specific behaviors we can test, adapt and succeed with, in order to change peoples minds.

This argument makes me think of an old international relations book, a classic, by Graham Allison of Harvard. His book "The Essence of Decision" on the Cuban missile crisis tried to analyze the events of October 1962 through a few different models. These included the Rational Actor model, the Organizational Process model, and the Governmental Politics model.

If you think about it, the rational actor, or hero, would break through the marketing clutter and change direction toward a new way, the social media way. There are heroes like that, including Tony Hsieh of Zappos.

Some marketing departments, though, are thoroughly caught in their own organizational processes. Doing something new happens very, very slowly and cautiously.

Or the focus of the company and marketing is a result off in fighting over budget control, an analogy to the government politics model. If the person who believes in social media wins the budget, then the company usually goes in that direction, but does so without integrating the other groups, a crucial element in success.

So what does this have to do with social media? It shows, simply, that organizational beliefs and patterns end up deciding how well a brand embraces social media. More importantly it shows how great a challenge rational actors face within their own organizations.

Labels are important. While the label social media implies a much greater shift in the way we think about marketing to people, it's a useful one for now, in that it gives us a chance to change peoples' behaviors, both inside and outside of an organization.  When we do that, we finally have a chance to change the way people think about marketing. When we introduce social media initiatives, and do them right, it gives the organization and the people in it a chance to see that the behavior works, that it's important, and that it's worth reassessing how you market to your product and services to people.

Sometimes, that process is a lot slower than we wish it to be.

Are You a Responsible Marketer?

I read an article this weekend by Paco Underhill, author of "Why We Buy" and "Call of the Mall" in which he wrote about our (U.S.) changing retail culture. I'm a big fan of Paco's and I used to buy his "Why We Buy" book for all of my colleagues. I think it's one of the very best books aimed at understanding consumers.

In his article Underhill points out two somewhat distressing trends. The first is that our past culture of vehement consumer spending is over and that our addiction to retail is going through a painful withdrawal and treatment phase. That habit will not come back soon. The second is that the decline in spending combined with the bonanza of online information means that stores need fewer and fewer sales people. Why talk to someone when you can look up 3rd party reviews in an instant on your phone? Of course fewer jobs mean even less spending power, etc., etc.

All this got me thinking: What responsibilities do we marketers have in all of this? You'd think that with fewer goods sold, we'd have fewer marketers but the opposite seems to be true. There seems to be more marketers than ever right now, thanks to the digital revolution. Do more marketers actually make the system more efficient, rather than relying on fewer more expensive options?

The bigger question, though, is if people spend less, and there are fewer of them who even have money to spend, does that impact what we marketers do, which is in essence try to increase sales? One way to answer this is that the plethora of marketers now aims to make sales costs more efficient through targeted digital media. I don't know if that's completely true, but it could be.

Do we ever accept the fact that people will buy less and encourage them to do so? The only time I remember doing this was when I did work for the utility Green Mountain Power. We built some very good interactive tools to help people lower their electric bills. You'd think that would mean less money for the utility, but the reality was that if they could keep peak energy use down, they'd be more profitable, not less.

I'm sure not many of us are having this conversation with our clients, though. And if we did, what would we say? If we say, "You have to market to lower profits," our clients might simply show us the door.

Efficiency, especially around digital, is a great place to start. It will hurt the marketing big guys and help the marketing people taking risks.  But it doesn't answer the question of how what we do digitally may, in and of itself, be part of the job-loss problem.

Stop Speaking Marketing!

When I was a kid and we wanted to take a picture of my grandmother, she’d put on her “picture” face, which was rigid and unsmiling, instead of her normal, nice face. We’d laugh afterwards, because she’d always looked terrible in those pictures. We realized if we wanted a good picture of her, we’d have to sneak one.

Marketers have the same problem. Social media raises the stakes for marketers and makes it easier for people to sniff out, and turn off, when they sense a hard sell.

The marketers’ challenge is to stop speaking to people as if they were your consumers and targets, and to start speaking to people as if you liked them and had an interest in them.

I ran into a marketer yesterday who wanted some advice around social media. Personally, he was totally into an endurance sport, and he would travel around to watch and participate in those events. It turns out that his company was about to sponsor this endurance sport and had put together a special offering to promote the sponsorship. The marketer was totally psyched.

After telling me about this, with the excitement rising in his voice he wanted to know if he could tell people about this on social media. His suggestion?

Go on Facebook and Twitter and write: “Endurance sport special. Click here for sales.”

I stopped him immediately. “Say it on social media in the same way and passion you just told me,” I suggested. He had taken his excitement at telling another person and, instead, put on my grandmother’s picture face. He had stopped talking to me like a person and started talking to me like a sales number.

While I’m picking on this person, I see this a lot. Part of it is also a writing/talking breakdown. Here’s my suggestion:

If you write or talk marketing copy, try saying what you’re writing to another person. Now call someone you like and try saying the same thing. If you find that you’re talking to those people in ways you’d never normally talk to them, try again.

You can be conversational, convincing and selling at the same time. Especially if you’re talking about people have an interest in. On social media, it's too easy to tune out, so what you say, and how you say it, is important. It's important everywhere, it's just more apparent on social media.

So stop talking like a marketer and start talking like a human being.

[By the way, that's not  my grandmother]

The Lazy Marketer

I don’t know why I’m still surprised when I get this type of lazy, impersonal marketing, but I am. You’d think with a tough market you’d see a little more imagination and personalization. It’s too bad this person didn’t show up at our social media event this week.

This week I found this in my snail mailbox: a letter from a local realtor representing a buyer. Nothing wrong with that.

The letter starts: “Dear Mr. and Mrs. Seller.”

Um, excuse me; you know my name since you already printed out mailing labels on the envelope. Mr. and Mrs. Seller. Wrong and wrong again. Then it asked if I was ready to sell my town house, because there was a buyer ready and waiting.

Only problem is: I don’t own a townhouse in my neighborhood. I did, once, but the letter came to my current house, not my old one. [You can read the letter here]

This letter reminded me of a great passage from a Dashiell Hammett book with the Continental Op (I’m a big Hammett and Chandler fan). The Op is waiting in a bar and he reads a sign that says:

“Only Genuine Pre-War American and British Whiskeys Served Here.” He starts to count how many lies are in those nine words, makes it to four, before he something interrupts him.

That’s what this letter felt like. Someone treating me impersonally and wasting my time with something that had nothing to do with me. The realtor did sign the letter, though, as if her signature would show how much she cared.

Compare it with what C.C Chapman and Todd Defren talked about this week. Find out who your audience is, find out what they care about and talk to them in a personal way. There are lots of things this realtor could have done to target her limited audience. She could have walked around three loops with fresh baked cookies and introduced herself. She could have targeted just the townhouse owners with some great advice on improving their houses to sell in a down market.

Yes her client is the buyer, but Edie doesn’t make any money unless she brokers the deal. And to do that, she needs the owners.

Instead she carpet-bombed innocent civilians in a lazy marketing campaign.

Come on, Edie, you can do better next time.