Is a network of niches the answer to business survival?

With the latest economic crisis, the phrase “too big to fail” has been bandied about as a mantra of justification for a businesses right to exist (or be “saved”) yet, something is starting to sound inherently wrong about “economies of scale” in today’s networked market.
If there is one thing that is clear from The Long Tail, it’s that focused, niche products and services can find their customers easier and more efficiently today than ever before. Communities can pop-up almost anywhere, where like-minded consumers can meet and discuss their passions, without any intervention or support by business (such a community has popped up on this site for fans of WMMS, a rock radio station that dominated the Cleveland market in the late 70’s).
So, as we watch big banks, big car companies, the titans of Wall Street falter, the question of what will survive isn’t as important as what is the business model of the future. I’m starting to think it’s not WalMart, Best Buy, or even Target- although Target has done a better job of finding a target to market to.
It’s pretty obvious that deregulation came along with a total disregard for anti-trust as well. It was deemed anti-business to try to make sure that there was true choice in the marketplace.
The first place to really see the failures of this policy have been the very companies that fought regulation the hardest: the media giants. With deregulated markets we saw the elimination of competition in newspapers and the dumbing down of the press at the exact same time as we moved to an information economy. The answers of big business were to give us less info- at a time when people were virtually drowning in it. The same happened in TV and Radio broadcast, with an appetite for bigger audiences, the money believed the answers were bigger broad market programming, when audiences were increasingly able to pick and choose what fit them best.
The same has happened to mass-market retailers, who can easily be out-maneuvered by niche internet retailers, as long as the shipping costs aren’t too high, or the need to experience first hand a big part of the buying experience.
Even preferences in shopping experiences have changed from big malls to lifestyle centers, with big box “power centers” losing some of their appeal.
All of this points to a future that probably isn’t in the hands of the giants anymore- but to the most adroit marketers who have built a network of other symbiotic businesses to support each other. Working together as a loose network to promote unique experiences, products, services are going to not only be keys to business survival, but of communities, who can’t afford to trust those companies that are “too big to fail” yet still do.
The survival of social networks and open source development depends on the number of users/size of community that adopts the service and contributes. In business, the number of connections that are built, and the sharing of support functions like marketing- will work the same way.
The answer to success in this new economy is less about getting big, but in getting connected. Relationships are more important than ever and the best way to build your business may be by helping someone else build theirs as long as there is reciprocal behavior. Networks of independent businesses are part of the model of Amazon and EBay, two of the most successful online marketers. Google is making inroads by giving away services, software and social connections in return for relationships that can be exploited softly as time goes by.
While we’ve been teaching and preaching the benefits of Web 2.0 for several years, we’re just starting to push our clients to reach out and work together with other similar small businesses. If Goliath is going to fall, it’s because either he’s gotten so big as to miss opportunity- or that the guerrilla’s have organized to out network and out maneuver him.
Just as the transfer of electrons at almost no cost and high speed has changed the media markets, over time, some of our big cities may find that they are having a hard time competing with smaller walkable communities as gas prices rise, as people’s time becomes more valuable and our love of big loses its luster.
Yes, too big to fail now, may be the kiss of death very soon.
It’s time to think of your network and working on your niche.

How Newspapers can become relevant in a Web 2.0 world

The prognosis is not good for newspapers, when in fact, they should be kicking butt, but, these mass creators of content are totally clueless. From Media Week is an analysis of what’s happening to the newspaper industry:

Shrinking newsrooms. Falling operating margins. Double-digit declines in ad revenue. American newspapers today are awash in ink—but the ink is red. Soaring newsprint prices and stalled ad business have, in fact, led analysts to call this year the worst for newspapers since the Great Depression.

A recent Pew Research Center survey illuminated the sorry situation. More than half of 259 papers polled reported cutting full-time newsroom staff and the news hole over the past three years. Large dailies have been hit hardest, with waves of layoffs sweeping through the Atlanta Journal-Constitution, The Washington Post, the Tribune and McClatchy companies, and others.

Buyers Want Newspapers to Reinvent Model

And if you read the whole Media Week Wake for the industry, you’ll be even farther down the wrong road than the papers are as they toodle off to meet their maker. Newspapers should be thriving right now- because they are content creators- and content creators are the mac daddy of the digital world. The problems extend way beyond their model of delivery-  they’d do well to go read Nicholas Negroponte’s excellent, 1996 book “Being Digital” to get a clue.

Usually, as an industry is in decline, the best version of the product appears. This hasn’t been happening in newspapers due to fundamental flaws in the idea of separation of editorial content and the business side.

Look at Google to get a clue. 70% of users ignore the sponsored ads- probably like 70% of newspaper ads get ignored too. The difference between the two- is Google understands it’s brought to you by those advertisers and does everything possible to make their ads relevant to the content on the page.

Take that model and look at your delivery of content and ads in any newspaper. No connection whatsoever.

Instead of learning about their readers, newspaper editors have for years thought it was their job to teach us about the world. That kind of arrogance today just doesn’t cut it. There has to be a quidpro-quo in the exchange of news and ideas. We’re not talking TO our audience, we’re talking with them.

Tell that to editorial boards around the country.

Next- we’re living in a world of information junkies. People are in constant contact via computer, pda, phone etc. How any newspaper can live on a “Daily” news cycle is nuts. The actual paper they print on is their biggest mistake. Think about it. A Kindle is $359, the cost of a years subscription to a paper- highly subsidized by advertisers who aren’t getting any feedback at all-is around $200- instead of delivering a one directional piece of daily garbage to the door- doesn’t it make more sense to give them a Kindle with a 2 year commitment? And, then charge advertisers via pay per click?

Instead of increasing content, most are shrinking their news hole. That’s the last thing Google would do- shrink the number of responses it gives. Sure, no one looks to see who comes last out of the 1,287,000 results, but, the reality is- people want more content, they want video, photos, charts, links to relevant information to explore and verify if you are indeed giving them “all the news that’s fit to print” (or in this case “distribute”). The value is in knowing your customers better by watching what they read, what they click on- and then giving advertisers access to the exact customer they are looking for.

No advertiser needs a million impressions of anything. They need buyers. This is where newspapers haven’t made any advancement at all. Even the New York Times who seems to be getting it- still serves me with the same ad for a Westin hotel at the bottom of my iPhone reader- over and over- even though I don’t often stay in hotels- and there isn’t a Westin anywhere near me. Sorry- NYT, you are missing your role in selling the ad right.

Even when Newspapers do build in “Web 2.0” features- few give the consumers who comment any “Respect” back. I’ve not seen a newspaper that provides a subscribe to comments feature via e-mail- which I believe can be easier than adding a feed. Few allow you to build back links to your site- a reason the most savvy bloggers leave comments. And lastly- they insist on limits of 3000 characters- or some other arbitrary “control freak” tendency. Sorry- but space on a hard drive shouldn’t be an issue - you want the people on your site, writing away- for as long as possible.

Some people don’t mind when the Cheesecake Factory hands you a menu that’s full of ads, but any kind of Pop-up, drop down, walk-over or auto-play ad on your site is intrusive and offensive. Newspapers may be desperate for ad revenue, but getting in my way of ease of use doesn’t make me like an advertiser more. It also doesn’t help if it’s not relevant (see above). Car dealers who are used to screaming in their TV ads seem to love intruding on my web reading: here is a hint: STOP.

And if you can’t give up on your multi-million dollar printing press dinosaurs, at least, think about this: design matters. The great copywriter Howard Luck Gossage said “people don’t read ads, they read what interests them, and sometimes it’s an ad”- so how come I can look at beautiful magazines all day long, and most newspapers still look like they were designed either for a LinoType or a comic book? Where is the grace of great typography which we can do faster, better than before- where are the beautiful photos that we can gather 10 frames per second without having to wait for developer and prints? The paper is at the end of it’s existance as a paper- make it great.

Last but not least: CONTENT RULES. While I can get content of the world straight from the horses mouth in any language on any continent at this point- why are you still giving me a menu based on what you think is relevant instead of what I like and need. No, I’m not talking about custom portals- but, figure out how to be intelligent in suggesting other similar content. Give me the links to the sources you used in your research, build a relationship between the news editor and the news reader. It may get dangerous with the best editors building their own following- but, hey, at least they’ll still have jobs, unlike the rest of you if you continue on the path that you are on.


There is more, but this is to whet your whistle. We’d be happy to teach your newsroom on how to survive in a web 2.0 world. That’s what we do at The Next Wave, marketing • innovation.

Hyper local marketing- advertising for a small business.

There aren’t ad agencies bending over backwards to solve the problems of the micro-enterprise unless they want to win awards, because the value equation just isn’t there. Big clients equal big media budgets, small clients equal no media budget, and even though the media budget shouldn’t have any connection to the compensation of an agency, every one would rather have Burger King instead of Benjamins Burger Meister on their account list.

So, if you own a small business, and may want to be big one day- this post is for you. But, right now, you just want customers and have a small marketing budget and need real answers so here we go.

Branding is the most critical decision you can make. They say “what’s in a name” and the simple answer is everything. Yet, I don’t know how often little thought is given to the corporate moniker and the associated mark. This will be what you have to live with for the life of your business. The name needs to be unique, catchy, have meaning, be memorable- and preferablly spellable with out having to go to phonetics.

Here’s the short don’t list:

  • Don’t name it after yourself, in case you ever want to sell the business. Yes- I know it worked for Ford, Chevrolet and Chrysler and Toyota, but, there was no Mr. Scion, Mr. Lexus or Mr. Infiniti.
  • Don’t name it after the location- in case you ever have to move the business ie. Dorothy Lane market has three locations- none on Dorothy Lane.
  • Don’t make it cute using numbers for words or abbreviations- ie. Marketing4Performance or Gold4yaMouth.
  • Don’t limit your business by a technology or what you do- ie. “Muffler Brothers” does complete car care and “Dayton Electrolysis Center” now uses lasers to remove hair.

After naming comes the brand mark. Nike originally paid $35 for the “Swoosh” and thought it would never be as good as the Adidas 3 stripes which actually helped reinforce the shoe. Next Computer paid Paul Rand $100,000 for their logo- only to have the company last a few years.

Rule of thumb- it’s not a good logo if only you would ever want to wear it. Invest in a good design.

15 years ago, the URL wouldn’t make a difference- now it does. It’s preferable to get a dot com address- even though search engines have made this really irrelevant (a good site will be found no matter what). Find something people can spell- like as opposed to

The importance of a website that can be searched and indexed is absolutely critical- and it’s why we teach our Websitetology seminar at least once a month in our market. Small business can’t afford to either have a static website that isn’t updated frequently, or an over the top Flash site that looks uber cool but can’t be updated or found. If nothing else, make sure your business is listed in Google local.

While we could spend quite a bit of time on building a better site your website must have the following:

  • a search tool
  • a way for customers to comment
  • an RSS feet
  • a unique URL for each key concept or product
  • webstats
  • content should be separate from presentation.
  • Blind friendly W3C section 508 compliant

All of these can be accomplished with an Open Source Content Management System. If you don’t know what some of the above mean- spend some time on our websitetology site.

While having a great brand and site are a good start- the real problem is how to tell people where you are and what you do- FOR THEM. It’s not about you- it’s about how you solve your customers problems.

If you are a restaurant- what will be different, what is your value proposition, what kind of experience you will provide. This was dubbed “The Unique Selling Proposition” or USP- and today it is even more relevant. In a web 2.0 world where ideally, the consumer is all knowing of all options available, how will you convince them to buy from you? While paid media was the method of choice for the last century, recent studies are suggesting that 57%+ of internet shoppers are more likely to trust “someone like them” than a professional reviewer. Remember where we said customers need to be able to comment on your site- well, either they’ll comment on yours- or someone elses (this restaraunt lasted a little over a year).

Building links to the community isn’t any faster than building an ad campaign. No one shot silver bullet solutions- it’s a long term commitment to forging ties that connect you to your marketplace. Sure, sponsoring t-ball leagues doesn’t seem like a sophisticated marketing strategy, but for an orthodontist, it’s one way to reach kids that will probably need braces.

Mass media is failing small business miserably. While local broadcast TV used to be a viable solution- with the addition of first cable, then sattelite, then competing IPTV over phone lines- it’s becoming less of a BROADcast and more of a hit-or-miss cast. Local radio is now splintered by multiple formats, owned by a very few companies, providing very little localization. People are tuning into internet radio, podcasts and their own personal music servers (iPods). Newspapers are losing readers in droves in print- and picking up readers online- yet, the ads they serve are just as untargeted as before. Until these media build a marketing profile of their customers to gain permission to provide focused marketing in exchange for their content it’s still a hit-or-miss marketing strategy.

This one-to-one marketing relationship is the holy grail of our current media landscape. The best example of providing meaningful targeted advertising is now coming from “sponsored search” where marketing messages are keyed to the topic you are searching. Google has become a mega brand and a powerful force in media by only showing text ads that relate to the searches you are making. No pretty pictures- just words based on your words. Even though 70% of searchers ignore the sponsored ads, these may actually be the best option for small business available. Even with the spectre of click-fraud, and high cost per click, at least the ad is being served to someone looking for your specific product or service.

Ideally, you are on the first page in organic search. It can be done for any business, if you make the effort. Instead of spending time cold calling or shotgun marketing- work hard at building your site to be the “expert’s answers” to your customers problems. We provide the most complete listing of our competition for ad agencies in Dayton on our site as one way to make sure we are considered in a customers search for an ad agency. You can do the same for your local business, or join in a trade association that keeps a list.

While we’ve spent quite a bit of this post on internet strategy, old fashioned Public Relations (PR) and event marketing should also be part of your plan. Even though readership is decreasing in newspapers- there is nothing like an article on your business to build awareness. Look to become friends with local business writers and bloggers- and be available as a source. Any time there is a new development in your field, make sure to write about it on your site- to share your expertise on the subject.

Knowing your customer: We can’t stress enough the importance of getting at least a name and e-mail address from every single customer. Comment cards in restaurants can be a great tool- but only if you reward your servers for getting completed cards from every table. A simple bowl to enter to win a meal, or movie tickets can be your best source of leads for your next promotion.

If you are still reading at this point- you must really care about marketing your business and want to differentiate your business from the competition. Here is the magic that makes small business work- you have passion for what you do, and love being the best at what you do.

Often times this means not taking yourself so seriously. Seriously. Have fun, make your business the place that people like to talk about, make your ads that you do run- fun, friendly and funky. We once names an electrician “Singing Joes Electric”- only to have it nixed by Singing Joes Wife. After years of struggling as the boring “Electrical Quality Services” he bought an established brand “Jahn Electric” and took over their brand. We’ve run into too many people who want to stand out- yet say they want an ad just like the competitions- don’t make that mistake.

When we do posters for the Second Street Public Market events- people steal them, frame them, decorate their room in the same color palette. When was the last time you wanted to take one of your ads home with you? What happens when customers want to wear your shirt, hang your poster up, or stick a bumper sticker on their car? Business.

We have no problem laughing at beer ads during the Super Bowl- but, when it comes to wiring a kids mouth with braces- why not make fun of it? Marketing is about building relationships- and there is nothing better than humor and fun to break the ice.

So when looking for an agency to work with your small business, look for the one that has ads that you would want to take home with you, the ads that speak on multiple levels, that interest, intrigue, inform or just instigate some sort of emotional connection between you and the brand.

You aren’t hiring an agency to spend your money on media- but to give you a message that people would want to make a part of their life. And remember, the agency can only make an introduction- it’s the execution and delivery of your product or service that will cement the relationship and be the platform for your business to grow.