A recent reviewer of a RFP/RFQ response wrote this in the evaluation/scoring:
Plan provided is NOT a marketing plan it is a Operational plan. RFP is for Marketing not a replacement of the Administration.
People who think marketing is something separate from operations shouldn’t still be in business anymore. That myth should have gone away a long time ago. Wisdom from Leo Burnett should be a good starting place, and he died in 1971.
“What helps people, helps business.”
“Before you can have a share of market, you must have a share of mind.”
“We want consumers to say, ‘That’s a hell of a product” instead of ‘That’s a hell of an ad.'”
“The sole purpose of business is service. The sole purpose of advertising is explaining the service which business renders.”
“The greatest thing to be achieved in advertising, in my opinion, is believability, and nothing is more believable than the product itself.”
Considering the potential client runs a service business, funded with tax dollars, and is getting a failing grade on every count, (a local school district) a new operational plan and way to communicate the new way of doing business is the key to changing perception and their fortunes.
Marketing does not exist in a vacuum, it’s interrelated to everything a business does. Looking to management guru Peter Drucker, who died in 2005, we find yet another quote:
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
If that doesn’t tell you that an operations plan is marketing, you should reexamine your boss credentials.
Everything a business does, reflects upon its brand. And the brand is a story that the world tells each other, based on what they think they know about it. Apple, Nike, Google, the great brands- have a story that people can share without a whole lot of prompting- and for the most part, it’s a positive one. Sure, each has its detractors, but overall, the Q-score and the buzz line up with the company vision and goals.
To me, Apple started out as a “bicycle for the mind”- a tool to exercise your further your ideas and to help you share them. Nike reached into the competitor in all of us, and gave us an uplifting mantra- “Just do it” and Google, knew long before the rest of us, that with great power, came great responsibility and stated that their goal was to “Do no evil.” It’s take over a decade for most people to understand the power that Google had harnessed.
Click to download a printable PDF
Great companies do great things and communicate those things often and consistently. But here’s the key- it’s not through words or ads- “actions speak louder than words” should be the mantra of every ad agency across the globe. Doing good is doing well. Talking about yourself is just talk, and often times, boorish.
Need an example of actions speaking louder than words? I was at a minor league hockey game last night. I’ve been around hockey for at least 50 years, playing and watching. In a freak instance, a players stick was flung into the stands, and a fan caught it. Granted, sticks can cost as much as $300 these days- but, the team had the nerve to send down a team official to take the stick back. The crowd booed for at least 5 minutes. Considering the home team was down 2 goals, the players had to wonder why they should be trying their hardest to win- when they were getting a steady raspberry. Would a marketing-centric company dare to ask for the stick back?
The story that the fan will tell now is “I got hit by a players stick flung out of the rink” and they came and took it away. Or, the proper response, “I got hit by a stick at a hockey game, while sitting in my seat, and they came and checked to see if I was OK- and offered to let me come down after the game and get it signed by the entire team.”
We went up to Chicago yesterday to the “Facebook Fit” bootcamp. Every event at 5 locations through the nation has sold out- with about 900 people getting a peak at what will probably turn into a much more efficient system of teaching the masses how to serve as their own media planner/buyer.
If you can make it to the one in Austin- which still has tickets available (it’s their home base for this roadshow) go.
Facebook is far from being the first to self-serve sell media- Google and Yahoo have had automated systems in place for years. What Facebook has done is made really complex targeting based on huge amounts of psychographic, demographic, geographic, economic data tied in with buyer behavior information- accessible to all. Forget Nielsen, Arbitron, Media Audit etc- their data is in real time, and the tracking is precise.
John Wanamaker famously said “I know that half my advertising money is wasted, I just don’t know which half” with Facebook analytics, it’s really easy to tell what works and what doesn’t. And when it comes to reach- while other online advertising has a 38% effective reach- Facebook is claiming studies show they have an 89% reach.
When you also realize that all you need is a smartphone with a camera to make “a Facebook ad” with a visual and a few words of copy- ad agencies grip on “media buying” is almost as obsolete as Wanamaker’s dictum. If everyone was on Facebook- many marketers problems would be totally solved, but sadly- internet penetration isn’t what it should be in the US- and smart phones aren’t in everyone’s pocket.
Which brings us around to old school conventional media and media sales. There are a ton of options for every business to buy media- with or without the help of an ad agency. Of course, there are also people who think because they can rent the Adobe Creative Suite- they can instantly make great ads. Newspapers in our area did away with the agency discount decades ago- and the 15% commission model never really worked that well- encouraging buying quantity over quality to pad agency revenue. The real question is if media sales forces are still relevant?
We’ve seen massive consolidation in both TV and radio- with the idea that having a sales force sell multiple stations makes better business sense. Often agencies find they are competing with media reps trying to go to clients directly- with deals to make quotas and fill airspace. The Next Wave is wondering why media outlets haven’t gone to self-service online buying systems- with a totally automated sales and insertion system. Long gone are the days when reps picked up tapes from agencies- and why are they still serving as go-betweens to enter in schedules into a computer to see “if it will take the offered price” - when online dutch auctions have been selling space online for years.
Media properties should be focusing all their efforts on building relationships in their local communities and providing invaluable information in real time- be it news, concert info, local events etc. The return of the DJ, VJ, real news person is here- as always connecting with social media and web. If done right- local media can have a a renaissance. If done, business as usual- there is no hope for local media when going against a verifiable advertising media provider like Facebook.
We were invited to a pitch today. The potential client has grown quickly and out grown the agency they had. This is always an unfortunate situation, but, it’s always better to refocus early, before things get totally out of wack.
In a fast growth market, there are certain places a brand wants to be: first, biggest, most well known. Ideally, all three. The problem comes when you’re none of the above and searching for an added edge to continue your growth. This pitch was a bit different, in that we weren’t given much time (a week) and we weren’t given a brief, it was more of a capabilities presentation. Of course, the first question coming out of the audience (it’s a franchise organization so there were a lot of bodies in the room) was have you done work for someone like us before? The old catch 22 question which is why the old industry adage of “it’s better to be lucky than good” often comes to play in matching agencies to clients. Or, as they also say- it’s not what you know, but who you know.
In our background research we were finding that they are in a segment experiencing phenomenal growth. They’re on the map as a one to watch. The problem is, the number one player in their field, carved a niche away from the original number one by offering a very clear point of differentiation and then proceeded to own the niche like it’s the main event. The number two and three brands have been busy trying to out niche the leader and our potential client was trying to play leapfrog on the very same platform.
Stop.
This is what challenger brands should never do. Don’t play follow the leader. Don’t assume that what works for the leader can be copied, duplicated or improved- need proof, how’s Barnes and Noble really doing vs Amazon in just the eBook reader market? Never mind the selling of books. If you are going to be a challenger brand, the most important thing that you can discover to build a strong brand DNA is your brands “unique selling proposition,” a concept developed by Rosser Reeves for the Ted Bates Agency in the fifties. Brands that find their USP find that their products and services are much easier to sell and have a conversation with their customers because there is no cloud of confusion surrounding their products. Apple is a great example of a challenger brand that still isn’t the biggest by market share, but has grown from near bankruptcy to the most valuable company in the world based on the USP of products that are beautiful and easy to use. Google has grown by proving itself useful. Neither were first to market, but both found that by sticking to simple messaging they could own a position that could be unique to them. You’d think that other computer companies would figure out that ease of use is important, but it hasn’t happened yet.
While McDonalds and Burger King and sometimes Wendy’s, Hardee’s, Jack in the Box and countless others fought to be “THE” burger chain, Subway grew to have the most outlets by focusing on a more approachable business model with easier entry for franchisees. Five Guys is making all the burger joints look twice at trying to be something for everyone, as they stick to the knitting of making a better burger. When McDonalds began, there were no chicken nuggets, salads or coffee bars, it was burgers, fries and milkshakes.
If you want to be a challenger brand, that’s fine. But, the truly great understand that to steal a phrase from designer/author Marty Neumeier, in his book, “Zag“, “when others zig, zag.” He stresses the need for radical differentiation. It’s not just enough to talk about a strategy, you have to actually have one. Five Guys isn’t winning the burger wars because they have free peanuts, it’s because they hyper focused on a better burger and a simplified menu in a no-frills space.
Challenger brands that find their USP and convey it in a clear, differentiated voice, soon find themselves in a category all of their own. Find your USP, or find an agency that you can talk to about finding it, and you’ll be on your way to success.
A few friends on Facebook (a walled garden- a wasteful place to have meaningful discussions) had a discussion about the end of newspapers. Most of them had been in the business or still are. There were lots of repeats of the standard sky is falling misconceptions about why newspapers are dying:
young people don’t read newspapers
giving away content online is a mistake
releasing breaking news before publication devalues the print edition
advertisers aren’t advertising in them because they’ve moved to more trackable methods
the economy is bad
local businesses don’t advertise anymore
how can newspapers compete with aggregators and bloggers who steal their content
The problem is, all of them are missing the core issue- newspapers were never the best way to distribute news, they were just the best solution when there was no internet. Stop thinking of news as content to go in a “paper” and you begin to solve your problems.
Let’s look at the limitations of the original newspaper:
There is a deadline for “publication” that was fixed. If the story was going to be covered it had to be in process before 7 or 8 pm to make the midnight press time.
Newspapers have limitations on space- with additional costs to run longer stories. They can’t run video, audio, or most importantly update after the publication or engage in 2 way discussion.
A huge part of the expense of creating a paper was in physical equipment- and supplies. Printing presses, ink, paper, distribution had to be covered by advertising and retail sales, before the cost of content creation was even factored in. It lead to exclusivity and a monopoly in most communities.
Because of the costs of distribution- and the length of the supply chain, you didn’t have to compete with other papers in your community- unless people wanted to read day old or two day old news. Only a local paper could get the content to you quickly and keep it relevant.
Reaching back to a brilliant book from 1996, “Being digital” by Nicholas Negroponte, there is a single axiom that must be understood: “Bits not atoms.” In other words, things that are created digitally, shouldn’t be converted to atoms- paper with ink unless it enhances their utility. Very few things fit this axiom when it comes to news or advertising.
The only value proposition a local news outlet has anymore is to connect a community and to be able to really know each of their readers well. Since we’re no longer creating a one size fits all general newspaper- with a fixed size and lifespan, we must become the go-to resource for local advertisers selling atoms (physical goods) that people in the community want and need.
Even here- the problem becomes that everything is one click away to be bought from someone else online. Showrooming, the practice of going to stores to see the product and then ordering it online from someone cheaper is a major problem for those that sell commodities that don’t have a short shelf life (fresh groceries) or are too big to ship inexpensively (furniture, weight sets, car engines). So the market for advertising locally has become smaller- services, local restaurants, the arts, hospitals and health care, sports teams, they become the people who need local advertising the most- but, most of them have caught on to building friends and followers via social media - and can’t afford the newspapers overhead to be included- this includes the legions of sales people that news outlets employ to sell space in their finite paper or finite TV commercial space. Outdoor has seen a resurgence since it can’t be ignored, skipped, missed or requires a subscription.
Note: Google lets advertisers buy their own ads without the help of a legion of salespeople- and, Google knows their readers/users really well by tracking behavior, serving up custom content.
Getting back to local news organizations, they’ve been acting as the anti-social media for so long: one way communication, highly controlled, exclusivity, monopoly in their media space, that they’ve become irrelevant. That’s a big part of why newspapers have lost their value to advertisers. But, there is one big factor that many in advertising forget and don’t like to acknowledge- the fallacy of composition: just because you are online and all your friends are online- doesn’t mean everyone is.
There is a digital divide. Besides being a country with pathetically slow internet connections, we’re not universally wired. We’re not even close- and to the people who don’t have a connection, they still depend on the printed edition. The problem is, they are generally not in the key demos advertisers want. This is why the idea of running community newspapers as a non-profit community service is becoming more relevant and interesting to those who think about the value of a well informed public- from everything to the important decisions on who to vote for, to understanding the issues of the day.
Advertisers who want to be considered good neighbors, who believe that a healthy, well informed community is good for their business may begin to have a reason to advertise and support a publication that improves their community if it is also able to serve as the community hub/forum that set the agenda for the community.
Civic pride and civic duty are the keys to journalism of the future as well as community building. The monetary value will follow the utility of the content, not the other way around. Seth Godin has said over and over that he’s made more money by giving away his ideas and that the widest dispersion is the best when it comes to his content. He’d rather sell you 10 copies of a book for a buck each and have you give them all away, than sell you one for $20. The value is in the connection and the value the journalist adds with that connection- that inspires patronage and pride in the product, not because the ads are useful or the coupons save the reader money.
In Dayton Ohio, we’ve been watching the experiment by Cox Media of trying to integrate TV, Radio and Newspaper under one roof since late 2011. TV and Radio are both facing the same fates, except broadcast TV has been giving away its content for free since TV’s inception as has radio. In the UK they paid for these services with a tax on TV sets and for the longest time independent broadcast wasn’t possible. The same thing that’s happened to newspapers with the net has happened to TV- now anyone can distribute video, on demand, and not have to own a transmitter or a license from the government, enter YouTube, Vimeo, Ustream etc.. Radio has been made irrelevant by iPods, Pandora, Spotify, etc.
Once again, the key to being relevant to local advertisers is local content. The non-profit public radio station understands this and has local people on the air, talking about local issues and events. For profit radio doesn’t even have to have a person in the studio all day anymore using voice tracking and programing from Texas.
What’s most funny about Cox is that they still think there is a difference between print, radio and TV- not realizing all of them can be engaged on a single device called an iPad. Yet, they maintain different sales forces, different rates and different websites- all adding costs and no benefits to the end user. Integrate and refine your messages to a simple, single stream and engage in the old One-to-One marketing idea and you may become relevant to your advertiser again.
Local advertisers need local media. Local media needs to have and know it’s local audience. Only then, will the two connect again.
And, just as Seth Godin says you make the most from giving away your insight, I’ve given my local media a gift in this post, I just don’t think they are ready to accept that their way is D.O.A.
With Google about to spend $6 billion to buy Groupon it looks like validation of this business model. But, as a local business person, why would you choose to use Groupon in the first place- and will it be a good investment for you?
To understand how Groupon works- it’s a no upfront cost advertising tool. And while that sounds great, The stinger is you are going to get 25% of what you would normally make on a sale. That’s a VERY high cost of advertising. No one would jump into a deal and say spend 75% of your gross price on advertising- in fact, much over 10% and you better be selling things that have crazy markups like booze, diamonds or some professional service (I haven’t hear of a brothel using Groupon yet- but, that’s the kind of business that would do best with this marketing ploy).
The beauty of Groupon is it’s the ultimate sampling/awareness tool. The cost is the killer. Take the local Ben & Jerry’s franchise that offered $8 of ice cream for $4. I give Groupon $4, they give Ben & Jerry’s $2, and Ben & Jerry hope I don’t redeem the coupon (which is the only way they make money- unless they convert the Grouponee into a regular customer). There is also a transaction fee- which further cuts into their margins. So- since we already go to Ben & Jerry’s they just treated us to 1/2 price ice cream. We live nearby. They haven’t grown their market at all. It cost them $6 dollars to sell us $8 of ice cream- and this is a recipe for going out of business.
Now, if B&J had religiously collected emails, sms, and addresses from customers- and built a customer loyalty program- even using tools like Foursquare, they could have made us very happy with a Buy One Get One offer- and only spent 50% of their margins. Or rewarded all frequent customers with 20% off- and been ahead. No payment to Groupon, no mad rush- followed by a lull, and targeting a much more relevant demographic. Because unless you have a lot of locations- Groupon probably over delivers your market as well. While you and I live in an internet connected world, there are a lot of Americans who still by ice cream that don’t live and die by the browser. In fact, 1 in 12 can’t even get access to high speed internet in this country even if they want it.
Groupon doesn’t change one fundamental rule of business- it always costs more to acquire a new customer than to retain an existing one. Remember that.
So, when does Groupon make sense? If you have an innovative product that no one else has and you need people to sample it- this works well for professional services, hair, nails- where one fantastic job can convert a customer. It also works to introduce people to your new lasagna pizza (the “Pizzagna” - don’t say it fast) that no one else has.
Launching a brand new company- may also be a great way to minimize your initial customer acquisition time, but at a very low price. Remember, it’s always easier to drop prices than raise them- and your $4 deal on an $8 garbage burger may just end up being the most you can ever expect to charge again.
Doing a little searching- here are some recommendations from another site:
* Do the math and make sure the discount you’re offering won’t damage you financially. Don’t be bullied into offering a steeper discount than you’re comfortable with.
* Are prepared to serve a large influx of new customers; you may even need to hire more staff temporarily. If quality and/or service might suffer with more business, think twice.
* Come up with incentives for those new customers to come back at full price, or offer a more modest discount.
* Understand that many companies use companies like Groupon simply to acquire new customers and are willing to break even or even lose a little money on their offerings.
There are many people who think Google has lost their mind offering $6 billion for Groupon- this writer included. Yes, they gain 3,100 sales people- which Google is desperately in need of, but, almost anyone can build the Groupon model into their business with minimal effort. This type of deal brokering has been done by others - here’s a link to 50 Groupon like sites.
There are a lot of out of work radio, TV and newspaper account executives that Google could hire and train for a lot less than $6 billion. As it is, Google is already the leader in directing customers to business online- but, does an absolutely horrible job of teaching people how to use it’s tools effectively. Sometimes technology still doesn’t beat personal, face-to-face sales. Every city should have a Google office- just like Apple has rolled out their Apple stores- where Google can show off it’s technology, train people to use it properly- and build real relationships based on trust. Somehow, with Groupon’s huge windfall- along with their high costs, I can’t see this model staying viable for more than a flash in a pan.
If you need to devise better ways to reach new customers, look into CRM, talk to a company like The Next Wave (us) on how to market in the digital world, but, be very careful before committing to Groupon.
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