Marketers who want to Improve ROI Need to Better Align Ad Budgets with Consumer Media Habits

There’s no doubt that traditional advertising tactics will continue to be a critical part of the mix for many marketers for years to come. That said, whether this practice is based on the efficacy of these tactics (and by that I mean old standbys such as TV, radio, direct mail, etc, but also some of the more aggressive forms of banner ads such as pop-ups and page takeovers), or the fact that the interruptive based advertising model has become so habitual among marketers that it is self perpetuating, is subject to debate.

But what I find ironic is that despite the incredible growth of the Social Web and the dramatic increases in the amount of time consumers spend with digital media, a significant share of ad dollars are still being devoted to traditional formats. Of course, there is plenty proof that these traditional formats are effective at getting messages out. What we don’t know is how effective they are (if at all) at influencing people - but that’s a topic for another post.

The problem is that people do not appreciate the intrusive nature of these traditional tactics and will do anything they can to avoid them. Whether it be putting their name on a do not call registry, adding ad filtering technology to their browser or using a DVR to record TV programming as a way to avoid ads during playback.

People, instead, want control over the content and information they consume. And they want it from sources they can trust; hence the growth of the Social Web.

The good news is that marketers finally appear to be catching on. Earlier this month Forrester published their 2009 – 2014 US Interactive Marketing Forecast. The report predicts that interactive marketing will represent 21% of all marketing spend in 2014 (up from 12% in 2009), which nets out to a CAGR of 17%.

Why? Because they have learned that interactive marketing tactics are incredibly efficient and effective. For example, when Forrester asked over 200 marketers to rank the effectiveness of various marketing tactics over the next three years interactive tactics such as social media and online video topped the list.

What is shocking, though, is that despite this gradual shift of budgets to the digital channel there will still be a significant disparity between the percentage of ad budgets directed to digital (7% in 2009), and the percentage of media time people spend with digital media (34% in 2009). Apparently old habits, even those with significant financial implications, die hard. With that said, I’m going to go watch last night’s Daily Show on my DVR - sans commercials.

McKinsey’s Lesson for Marketers – Focus Less on Push and More on Pull

For years marketers have used the metaphor of the “funnel” to explain the process consumers go through when making purchase decisions. The theory being that consumers begin their journey towards purchasing a product at the top of a funnel where they have several, if not more, brands on their short list.

As they proceed down the funnel, so the theory goes, consumers become more familiar with the features and benefits of each brand. Ultimately, the funnel narrows and those brands deemed less desirable are rationally and deliberately eliminated by consumers save for the one that best meets their needs and requirements. At least, so the theory goes.

For better or worse, this framework has been at the core of many a marketing plan for a good part of the last half century. The result - marketing plans that almost exclusively focus on pushing messages (or offers, discounts, etc) at consumers at each stage of the funnel with the intent of moving them towards a purchase.

The Consumer Decision Making Process in the Digital Age
Not surprisingly, many have questioned the validity of this model on grounds that it’s overly simplistic, too rational, or that it fails to account for the increasing media fragmentation of the digital era. Now, a new study and report from McKinsey validates these skeptics.

The report, “The Consumer Decision Journey,” issued earlier this week was the output of a study McKinsey fielded that examined the purchase decisions of nearly 20,000 consumers across five industries: automotive, auto insurance, cellular carriers, personal computers and skin care. The key finding: the Internet, the rise of consumerism and a marketplace marked by an increasing array of product options have made push based marketing less relevant and, in many instances, less effective.

http://www.mckinseyquarterly.com/The_consumer_decision_journey_2373

The study partially discredits the funnel metaphor and makes the case for a consumer decision making process that is less linear and more bi-directional where the consumer has increasing control over where, when and how they engage with a brand.

But what I find really interesting about the study was the finding that, incredibly, two-thirds of purchase influences during what McKinsey calls the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family.

Two-Thirds of Purchase Influences are Driven by Consumer-Driven Activities

In the Digital Age Consumer Outreach to Marketers is More Important

If anything, the study confirms the urgent need for brands to invest less in push-based advertising campaigns, and more in pull-based experiences that deliver relevant and informative brand-to-consumer interactions where decisions are being made.

The obvious places to start would be by delivering more engaging and usable Web and point-of-sale experiences. It’s also clear that leveraging the word-of-mouth power of the social Web should also be at the top of the list.

While there is clearly a continuing place for push-based marketing, an over emphasis on these types of tactics will not only prove ineffective, they might also indicate that a brand is out of touch with its consumers. In an industry where perception is reality what can be worse?

Who says Twitter doesn't have a business model?

Is it possible Twitter may have finally stumbled into a way to monetize its business? Well, maybe.

According to Reuters, over the past two years Twitter reportedly helped Dell sell over $3MM in products to its Twitter followers who were directed to Dell e-commerce sites from posts they placed on Twitter. Dell, apparently, posts on Twitter several times a week and offers up coupons and promotions to its followers (all 600,000+ of them).

While $3MM for a company the size of Dell isn’t exactly a groundswell, it’s something. And although Twitter is not charging Dell for these referrals it hasn’t ruled it out as something they might consider in the future.

Maybe this is the beginning of a vertical application strategy for Twitter where developers using the Twitter API build apps for companies to hawk their wares in a way that generates Twitter fees (e.g., either on a licensing or per transaction basis).

Another strategy that has been kicked around has Twitter monetizing itself by selling its platform as a tool to track public sentiment about a brand (a product, service, politician, or what have you) or other topics of interest to researchers. The problem, at least as I see it, is that the very free nature of Twitter seems at odds with this approach.

Finally, others have suggested that Twitter be used as a vehicle for delivering targeted ad messages to its users. Whether these would be served up in the context of tweets (which seems problematic) or in custom applications built using their API (which seems more promising) is anyone’s guess.

Whatever the approach, the enormous number of people who use Twitter and the passion in which they monitor their messages makes it an incredibly value platform. Now all it needs is a strategy.

Forrester’s Lofty Vision for the Social Web

Wondering what social networking will look like a few years hence, or how it will impact your business or brand? Then look no further than the recently published Forrester Research report: “The Future of the Social Web.”

The report, penned by social media guru Jeremiah Owyang and team, provides an ambitious vision for the social Web and lays out a roadmap for its evolution starting with the birth of the commercial Internet in the mid-90s.

http://www.forrester.com/Research/Document/Excerpt/0,7211,46970,00.html

After reading the report I’m convinced that if even half of what Forrester predicts is true, it portends dramatic changes for both how people will experience the Web in the near future and how they will choose to engage (or not) with brands online.

According to Forrester, the social Web has grown (and will continue to grow) through five “eras” of evolution:

1. The era of social relationships – starting in the mid-1990s this era involved basic community sites like AOL and social tools such as forums, discussion boards, blogs, etc.
2. The era of social functionality – the period in which we currently reside where our social experiences are moving beyond just “friending” to include richer sharing experiences and interactive applications (like Facebook apps), but with the inherent limitation that peoples’ social experiences are, for the most part, limited to the sites they are visiting at any given time.
3. The era of social colonization – starting later this year as a result of the growing adoption of universal authentication technologies like OpenID, individuals will be able to surf the Web without leaving their preferred social networking platform in a way that will allow them to bring their network along for the ride.
4. The era of social context – starting sometime next year as these new authentication technologies become universally adopted, sites will begin to recognize people’s personal identities and their social networks. This will enable much more robust and personalized social experiences and will result in the social Web becoming the core of most people’s Web experience.
5. The era of social commerce - here’s when, at least according to Forrester, things will get interesting. As a result of the increasing personalization that social destinations will offer, people will be more willing to share personal information with sites in exchange for more valuable and relevant experiences. The result – a self-fulfilling virtuous cycle that will further expand the influence and scope of the social Web as it becomes more meaningful and useful.

Implications for Brands and the Traditional Advertising Model
This evolution will have deep and lasting effects on brand management and advertising as we know it. Already, numerous studies show that advertising is not considered credible and that the opinions of friends and peers are far more important in terms of informing and influencing consumer attitudes towards companies and brands.

By putting even more power in the hands of consumers in terms of when, and under what circumstances, they chose to have brand interactions, it’s hard to see how this trend won’t continue the declining credibility of advertising. Brands, in response, will be forced to shift their focus to building and managing online communities and advocates as a way to get their message out and build equity with consumers.

For brand and advertising managers the message is clear – start thinking now about how you’re going to cultivate these communities and advocates in the future because it’s nearer than you think.

Pandora’s Geo-targeted Ads Latest Example of Online Advertising Beyond the Banner

There’s been quite a lot of talk lately on how some Web publishers are moving beyond standard banner ad formats in favor of customized units as a way to increase viewer engagement and clicks. And no wonder with click-through rates for standard IAB banner formats on the decline across many properties.

One big shift, especially among social media sites, is to integrate ads squarely into page content as opposed to on the periphery of a page like most banner units. For example, social news site Digg just recently began flowing ads into the stream of its page content as a way to increase subscriber interaction.


Another good example of this is music service Pandora.com’s placement of ad units squarely into its music player. But Pandora is taking it a step further by adding geo-targeting to the matter.

For example, this morning while logged into Pandora an ad was served up by the Paper Mill Playhouse, which is several blocks from my house, for the musical play “The Full Monty.” Obviously I was targeted for this ad based on IP information from my browser.

I could only wonder if they are also using information about my music preferences (which as a subscriber is stored in their databases) as a way to serve up ads that would be of interest to me. For instance, knowing I like indy rock an ad for “The Full Monty” makes sense – but for "South Pacific," probably not. Some might think this is a little creepy – I don’t, just a way to deliver more relevant and useful information.

Wolfram|Alpha - The Search Engine of Tomorrow?

It’s been 12 or so years since Google was introduced as the result of a Stanford University research project. In that time the world has gotten used to search results that are based on things like the relationships between multiple Web sites or the number of times a search term appears on a page - an approach that doesn’t always provide the most relevant or useful information.

Now, a company called Wolfram Research gives search users a reason to raise their expectations. Wolfram is working on a new type of search tool that they are calling a computation engine. The difference is that their tool will give users specific answers to natural language questions they submit by collecting, curating and organizing information from a variety of sources rather than directing them to other sites.

An alpha version of the tool was released last month. The illustration of a sample search results page below shows how much different computational based results will be from traditional search results. Whether this will be the next breakthrough in search technology, or just hype, remains to be seen.

http://www.wolframalpha.com/

iPhone Continues to Help Apple/AT&T Profits – While Android Makes Inroads

On a day when both Apple and AT&T reported quarterly profits that exceeded expectations on the coattails of the iPhone, a recent AdMob Mobile Metrics Report shows that Google’s Android is slowly starting to chip away at iPhone’s dominant position.

Android, Google’s open source mobile operating system (OS), deputed this past November with the launch of the HTC Dream smartphone. According to AdMob’s March 2009 report, while growth of the Android over its first five months was impressive, it fell short of iPhone’s growth during its first five post launch months.

Other stats, however, show Android has had a considerable impact on the smartphone market since launch:

• Captured 6% share of the smartphone OS market
• Currently tied with Palm as the fourth largest OS
• Reached the number 10 device in the US in terms of overall mobile ad server requests

See full report. http://metrics.admob.com/2009/04/march-2009-metrics-report/

Do Apple and AT&T have reason to be concerned? I think so.

For starters, last month total requests to AdMob’s US ad servers by Android devices were more than 10% of iPhone device requests. That’s not insignificant.

And the much improved successor to the Dream, the HTC Magic, is due to arrive in stores in several weeks. The new device will include, among other bells and whistles, a 3.2 inch QVGA touch-screen display, a 3.2 mega pixel camera (with Auto Focus), high-speed connectivity and on-board GPS functionality. It looks really cool too.

NYT's Dowd Does Battle with Twitter

The irreverent and sarcastic New York Time's op-ed columnist Maureen Dowd wrote a hilarious piece in today's Times about an interview she had with the inventors of Twitter to find out, to paraphrase Dowd, if they are as annoying as their invention.

Here are a few of the more comical exchanges between Dowd and Biz Stone, one of the co-founders of Twitter:

DOWD: Did you know you were designing a toy for bored celebrities and high-school girls?
BIZ: We definitely didn’t design it for that. If they want to use it for that, it’s great.

-----------------

DOWD: If you were out with a girl and she started twittering about it in the middle, would that be a deal-breaker or a turn-on?

BIZ (dryly): In the middle of what?

-------------------

DOWD: I would rather be tied up to stakes in the Kalahari Desert, have honey poured over me and red ants eat out my eyes than open a Twitter account. Is there anything you can say to change my mind?

BIZ: Well, when you do find yourself in that position, you’re gonna want Twitter. You might want to type out the message “Help.”

Seems like Dowd has some issues to resolve with new technology - here's a link to the full column:

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Digital Books and the Next Era of Innovation

Popular science author Steven Johnson wrote an interesting piece in yesterday’s Wall Street Journal about digital books, how they will change what and how much people will read in the future and the impact those changes will have on innovation.

http://online.wsj.com/article/SB123980920727621353.html

As Johnson points out, we currently have unlimited access to terabytes of data and information courtesy of Google and other search engines. However, the nearly infinite repository of knowledge stored in the millions of books printed since the invention of the printing press are, for the most, outside the searchable Internet.

Game Changers - E-Books and Google’s Book Search Service
That’s about to change. The recent success of Amazon’s Kindle e-book reader, and the progress Google is making with their Book Search Service, are providing the tools and content needed to begin the next phase of the great migration of the written word to the digital format. This next phase, however, will be substantially more profound than earlier phases both in terms of the volume and, in many ways, the quality of the content being digitized.

Based on these developments, Johnson makes some excellent points (all of which I agree with) about the future of book reading:

• Book content (like all searchable content) will be indexed, ranked and commented on by readers
• Authors will likely write chapters (and even passages) in a way that are optimized for search engines
• Books will be un-bundled and many will be sold by the chapter (much the same way people consume songs rather than full albums as a result of iTunes and file sharing)
• Book reading will become social – book content will be tagged and annotated. As a result, people will share comments and insights on book passages (a chapter, a page or even a quote) much like they comment and dialogue on a blog post or newspaper article

Digital Books and the Innovation Revolution
But, to me, by far the most powerful outcome of these developments will be the influence over how people will learn and innovate in the future.

If you believe, like I do, that our economy and culture are becoming more idea and innovation driven, then a world where such an enormous amount of knowledge (book based and otherwise) is indexed, annotated and searchable is truly an exciting development.

So much was argued in Daniel Pink’s 2005 book “A Whole New Mind.” His premise: we are moving away from the information age into a conceptual age where ideas and innovation will be among the most valued currencies. This is a result of the abundance and commoditization of many products and services, the ability to outsource work to the lowest common denominator and the growth of automation. In this new conceptual age, according to Pink, creative right brain thinkers, as opposed to linear left brain thinkers, will be the heroes.

I have no doubt that creativity and innovation are going to be more highly valued as the U.S. and global economies evolve and become more competitive. The wide adoption of e-book readers and initiatives like Google’s Book Search Service, I think, will be very important enablers of that trend. Think of them as force multipliers.

Pizza Hut "Twintern" Program - Who Says There are No Good Jobs Out There?

Who says there aren’t good jobs out there for college students? For instance, Pizza Hut is looking for a college student for their paid summer “twintership” program. According to the job description on careerbuilder.com, the “twinintern” will be responsible for:

• Spreading the Pizza Hut message by collecting and sharing insights and experiences while working for Pizza Hut through social and interactive media: Blogs, Twitter, Facebook, YouTube, New and emerging media
• Monitoring social media for pop culture news, off-the-wall stories or anything else quirky and fun that he or she thinks would be of interest to loyal Pizza Hut fans
• Monitoring social media for any negative Pizza Hut brand mentions
• Chronicling their experiences through video and posting to selected media

Key requirement – study closely last week’s Domino Pizza gross-out You Tube video calamity and get ready to play defense.

This Time it’s Volvo’s Turn to Experiment with Social Media

Major consumer brands are starting to explore ways to integrate social media into their advertising campaigns - last month it was Skittles, and this month it was Volvo.

In Volvo’s case they promoted their new XC60 crossover SUV with a one day only YouTube page takeover to coordinate with the New York Auto Show. To spice things up, the takeover included a live feed of XC60 Twitter updates from the auto show.

This is the first time YouTube ran such a prominent ad on its homepage. This is no doubt part of Google’s (YouTube’s owner) effort to generate more revenue from YouTube which, it has been widely reported, has been a serious drain on Google’s profitability.

While it’s too early to tell what kind of impact Volvo’s gambit will have on XC60 sales, to me this is a great way to raise awareness and create a dialogue with consumers.

It’s almost a certainty that more marketers will follow suit in the coming months with their own social media experiments. As with anything else, there will be fits and starts but it’s only a matter of time before social technologies become commercialized as a platform for highly targeted online advertising.

Universal Music / YouTube Deal Could Help Save the Music Industry

Wired magazine reported this week that Google’s YouTube and the Universal Music Group confirmed the launch of their music video collaboration, Vevo.com, for later this year. Think of it as a Hulu for music videos (which, it appears, was the inspiration for Vevo). Revenues will be shared between YouTube and Universal.

The service will be advertising based and will serve up Universal’s music video assets (including artist interviews and concert footage) that will be of higher quality than the standard YouTube fare that is currently available. In addition, it’s likely that YouTube, and eventually AOL and Yahoo, will also have access to Vevo’s video library. Ultimately, the goal is to add other labels to the service as well.

If it works, Vevo would be a significant win for both parties. For YouTube it would mean the end of Universal’s licensing violation claims. And, as a premium YouTube property, Vevo would likely generate premium fees from advertisers. For Universal it would be a solution to their repeated efforts to monetize their music video business.

Music videos have been licensed to YouTube for several years now. But they have not generated the level of advertising revenues that either YouTube or the music companies had hoped for. This is most likely a result of the motley nature of music videos available on YouTube.

Ultimately, Universal (and the whole music industry for that matter) has nothing to lose by this venture. After years of declining record sales and profits caused by the rise of file-sharing, to say the music business is in dire need of new revenue streams is putting it mildly.

Will the Internet Surpass TV Next Year?

So predicts a research report just published by Microsoft. The study projects that time spent on the Internet by consumers will surpass traditional TV by June 2010. The report was based on research conducted in Europe but definitely has application to the US market.

Specifically, the study projects that by next summer Europeans on average will spend 14.2 hours per week on the Internet versus 11.5 hours on TV.

Other predictions include:

• Over the next five years Internet use on PCs will decline from 95% to 50% as other Web enabled devices such as Smartphones and IPTVs become more widely adopted


• Video capable mobile devices will grow from 31% today to 76% by 2013


• "Connected entertainment” and time shifting will become the norm as three-screen (PC, mobile device and IPTV) integration improves allowing people to watch what they want, whenever and wherever they choose


• Social connectivity will become commercialized and will enable more personalized and relevant online advertising and marketing


• Mobile devices will become the primary point of access to the Internet

Some of these predictions are similar to those reported in a major research initiative by the Pew Internet Project that I posted about in February:

http://marketingmemes.blogspot.com/2009/02/what-will-internet-look-like-in-2020.html

Of course, a good dose of skepticism is warranted with any report that predicts the future, especially one sponsored by a private enterprise like Microsoft that has a lot to gain if these predictions come true.

That said, I see little reason to doubt that most, if not all, of these projections won’t come to pass.

Are Fees for Online News Content in the Offing?

A couple of weeks back I posted about the challenges facing the newspaper industry as they deal with declining ad revenues and the migration of readers to free online sources.

http://marketingmemes.blogspot.com/2009/03/time-is-running-out-for-newspapers.html

Now, the New York Times is reporting that the industry is reconsidering its free content for all business model.

http://www.nytimes.com/2009/04/08/business/media/08pay.html?_r=1&ref=business

At an industry conference last week, newspaper execs explored various options to monetize their content on the Web. Some of the payment models under consideration include:

• Subscription model (e.g., WSJ.com)
  
• Micro-payments (e.g., iTunes)
  
• Content licensing to third-party sites

Of course, in order for this to work, newspapers will to address a major, maybe even insurmountable, challenge: how to get readers to start paying for something that has been free for so long?

Yahoo! TV Widgets – is Web/TV Integration Finally Becoming a Reality?

Several months ago Yahoo announced that it was developing widgets that will allow viewers to integrate Web services into their TV experience. Now it looks like those widgets will finally come to market.

Samsung is now selling the first TV that I am aware of that supports Yahoo’s widgets. The Samsung 7000 will come pre-loaded with four widgets: Flickr, Yahoo News, Weather and Finance and plans to offer up to 30 more widgets within the next few months and up to 100 by the end of the year. Sony, LG and Vizio are also working on widget ready models.

You can see how the widgets will work on Yahoo’s Connected TV site – while not a demo it’s somewhat illustrative:

http://connectedtv.yahoo.com/

The widgets look a lot like iPhone apps and will be readily available for free download. And like Apple’s approach, the Yahoo Widget Engine will be an open platform that anyone can develop on so the sky will be the limit in terms of the number and types of applications that can be created.

Samsung's 7000 and Yahoo Widget Engine will provide access to Web services like Flickr

Time is Running Out for Newspapers

The next year or two (if it takes that long) will most likely be the beginning of the end for many newspapers if they don’t figure out a way to make money on the Internet.

For instance, last week after 146 years in publication, the Seattle Post-Intelligencer ceased operations as a print newspaper, reduced its staff by over 80% and converted to a slimmed down, online only publication.

And the P-I is not the only one. Last month Denver’s Rocky Mountain News shut down completely. And there are a host of other newspapers on the ropes, including the Chicago Sun Times, the Boston Globe and the San Francisco Chronicle to name a few.

Even the mighty New York Times recently had to sell part of its company and seek a $250 million loan from a private investor to help address its financial problems.

Of course, all of these newspapers are grabbling with the same challenge: how do they monetize their content online as more readers move to the Web and information becomes more of a commodity.

There are many ideas floating around about how newspapers can become viable businesses again. Here are a few:

• Make newspaper sites a channel for social media – for example, many papers are using Twitter headline feeds on their sites that are grouped by the sections of their paper to keep readers up to date and engaged with their content
• Publish APIs for independent software developers – the New York Times and a few other papers have taken the lead in publishing application programming interfaces (APIs) that allow software developers to create social media apps using New York Time’s content – for example, here’s a Gmail gadget built using one of the NYT’s APIs:

• Jump on the electronic newsreader wagon by bundling content with the purchase of a reader device – for example, Newsweek Magazine might try to get new Kindle owners hooked on Newsweek's electronic version by giving them a free yearly subscription
• Become more deeply integrated into the communities they serve – for example, the Austin Chronicle has thrived despite being a free weekly by becoming active participants in the Austin music and art scene. For instance, the paper started the South by Southwest Conference in 1987, which has grown into one of the world’s premier music and film festivals

Whatever the strategy, I hope newspapers figure this out; and soon. In my opinion, the role of newspapers in investigative reporting , local news coverage and editorial journalism is too important to leave to the anything goes ethos of the Internet. Sadly, they have had 15 years to figure this out so the prognosis is not too good.

Joint WPP/Google Research Program – Trying to Solve the Media Mix Riddle

One of the aspects of online advertising that marketers value most is its measurability. Whether you’re running a direct response or branding initiative, the ability to measure campaign performance on the Web is generally easier, and more accurate, than most other media. That said, one frustration for many marketers has been the inability to determine the effect of their online ads in relation to ads they run on traditional media, and vice versa.

With that blind spot in mind, WPP and Google announced today that they will be kicking off a research initiative that will attempt to answer that very question. The research will study the combined effect of digital and traditional ads, and how they influence consumer perceptions and purchase decisions. Ultimately, the research should help establish criteria to help marketers make more informed decisions when making media mix and budgeting decisions.

According to a WPP press release, 11 research grants were issued out of a field of more than 120 submissions - press release can be found at:

http://www.wpp.com/NR/rdonlyres/E0AF399A-8450-408C-8BA8-C35D31DAE88C/31197/wpp_pressrelease_google_mar09_guid1f7dc1deb1b4408b.pdf?pageContent_PressRelease

The research topics are quite varied and address a range of factors that come into play when determining the impact of advertising on consumer attitudes and behavior. Here’s a sampling of the selected research topics:

• Effect of Online Exposure on Offline Buying: How Online Exposure Aids or Hurts Offline Buying by Increasing the Impact of Offline Attributes
• Does Internet Advertising Help Established Brands or Niche ("Long Tail") Brands More?
• Targeting Ads to Match Individual Cognitive Styles: A Market Test
• How do Consumers Determine What is Relevant? A Psychometric and Neuro-Scientific Study of Online Search and Advertising Effectiveness
• A Comprehensive Model of the Effects of Brand-Generated and Consumer-Generated Communications on Brand Perceptions, Sales and Share

Personally, I can’t wait to see the output.

Google’s New Behavioral Targeting Service - a Step in the Right Direction on Privacy Issue

A few weeks ago I posted about the pressures being put on online advertisers, and the Web sites that run their ads, to address the growing privacy concerns around behavioral targeting.

http://marketingmemes.blogspot.com/2009/02/online-advertisers-need-to-get-serious.html

Now, to liven up the debate, Google announced last week that it will be launching a beta-test of its own behavioral targeting service on AdSense partner sites and YouTube.

http://googleblog.blogspot.com/2009/03/making-ads-more-interesting.html

Google is not referring to the service as “behavioral,” but instead is calling it “interest-based” advertising. From what I can tell, the beta service will offer two of the more common ad targeting techniques:

• Behavioral – where an inference is made regarding a Web user’s interests based on the Web sites they visit
• Retargeting – the re-marketing to an online consumer who has shown previous interest in a product or service, but for some reason never followed through on that interest

These techniques are no different from targeting approaches used by other ad networks. That said, what is different about Google’s service is the proactive approach they are taking to address some of the concerns about targeted ads raised by privacy advocates. For example:

1. They will be expanding the number of formats and publishers that allow users to click on targeted ads served up by Google for detail on the information that was used to deliver the ads and how that information was collected
2. Users will be give the means to view, delete or add information about the types of ads they would like to see through a tool called the “Ads Preferences Manager”
3. They will be providing users with an easily accessible way to opt-out of future targeted advertising

In Google’s own words, their approach gives users “transparency,” “control” and “choice.” Hopefully, these steps will quell some of the rumblings from privacy advocates who have been calling for greater regulation of the online ad industry which is the last thing we need in the middle of a recession.

New 4A's Book Explores the Differences Between Digital and Traditional Agency Services

Earlier this week the 4A’s (American Association of Advertising Agencies) published a detailed report outlining the differences between digital and traditional marketing and the impact those differences have on agency operations and economics.

The report, “Understanding the Economics of Digital Compared to Traditional Advertising and Media Services,” was primarily written for general advertising and media agency executives but is a great reference for any marketing firm that is making the transition to a digital-centric model.

http://www.aaaa.org/eweb/upload/catalog/pdfs/MG18.pdf

The report validates what a lot of people who work in digital already know; digital is a different and, in many ways, more complex medium in terms of both planning, creative and execution. And while the report’s findings may seem obvious to some, there are a few gems in the report that traditional marketers making the switch would do well to memorize:

• The amount of agency labor required per dollar of media spend is significantly greater for digital than for traditional media - this is true for all disciplines, but especially for creative, media and data analytics
• Digital media requires much tighter integration between creative, media and production – managing these functions in silos like most traditional agencies do will not work with digital assignments
• Digital assignments frequently resemble software development projects – the staffing models and talent that many traditional agencies have are not sufficient for the complexity and size of these types of assignments

As more marketing and media budgets move online, agencies are going to have to make changes in their staffing and operating models to keep up. It’s not going to be easy, but at this point traditional agencies really don’t have a choice if they want to remain relevant.

What Would Nokia Do?

I just picked up Jeff Jarvis’ new book, “What Would Google Do?” In the book Jarvis deconstructs Google to determine how other companies can think the way Google does as a means to replicate their incredible success. His premise being that our economy and society have been so altered by the Internet that the old ways of thinking are not only outmoded but counter-productive. To Jarvis what’s needed is a new way; the Google way.

After reading the first chapter I believe Jarvis may be on to something. However, I think there’s another company that has a story that is just as, if not more, compelling and relevant for businesses that are trying to find their way in the current environment. That company is Nokia. Here’s what I mean.

The New York Times reported today that an astonishing 2.6 million jobs disappeared in the last four months – a rate unseen during the post-war era. This dramatic decline led the Times to speculate that the growing job loss “may reflect a wrenching restructuring of the American economy…and that many companies [appear to be]…abandoning whole areas of business.” A depressing assessment, but probably not too far from reality.

http://www.nytimes.com/2009/03/07/business/economy/07jobs.html?em

This reminded me of a case history I read awhile ago about Nokia and how it evolved over the years in response to changing conditions.

Nokia was not always the mobile communications giant it is today. It actually started out as a wood-pulp mill in 1865 and eventually, through acquisition, became part of the Finnish Rubber Company in the early 20th century.

By the 1980s, Nokia was a conglomerate that manufactured an array of wares including, among other things: paper products, tires, footwear, personal computers, televisions and telecommunications equipment. It wasn’t until 1992 that it decided to divest from most of its lines of business and focus exclusively on mobile communications. This was in response to a steep decline in paper prices caused by the deep 1990–1993 recession.

Today, 17 years later, Nokia is the undisputed mobile phone leader with 40% market share, and was ranked last year by Business Week as the fifth most valuable brand in the world (Google was number 10, but closing fast).

If there’s any silver lining to the current gloom it’s that companies and industries can turn adversity into opportunity. I’m sure it won't be easy, but Nokia is proof that with a little bit of foresight and some good timing it can be done.

Look to Web 2.0 Tools for the Next Evolution in Employee Productivity

Some companies are finally realizing that Web 2.0 is more than just friends re-connecting on Facebook or people Tweeting that their plane just touched down. One day, and it’s coming sooner than you think, Web 2.0 apps (wikis, blogs, podcasts, etc) will also be used by many organizations to improve worker morale, collaboration and productivity.

In fact quite a few innovative companies have been using Web 2.0 tools for several years now for those very purposes. As much was confirmed from a recent survey fielded by McKinsey of 50+ companies. Analysis of the survey can be found on their Quarterly magazine Web site.

http://www.mckinseyquarterly.com/Six_ways_to_make_Web_20_work_2294

Most of the surveyed companies are still figuring out how to integrate Web 2.0 into their organizations. This is to be expected with any disruptive technology. A few adventurous innovators get the ball rolling; they in turn influence the early adopters who validate the innovators and so on. Eventually, the new technologies and the myriad applications they hatch become widely adopted. Thus goes the technology adoption lifecycle.

To me what makes the report so useful was the identification of two factors that can make or break a corporate Web 2.0 initiative (the report actually identifies six factors but I think these two are the most important):

1. The best Web 2.0 initiatives originate with users, not management - for anyone who has designed a Web site this makes complete sense. It’s hard for even the best designer to know what users want without an in depth understanding of their needs. In the context of Web 2.0, it appears this input best comes in the form of the types of grass roots apps front-line employees develop on their own
2. "What’s in the workflow is what gets used” – the survey revealed that employees will not adopt new tools if they are outside of the work processes they are used to using and will view these tools as increasing, not decreasing, their workload

These findings validate Forrester’s highly practical POST approach to planning social technology programs which I highly recommend:

Most companies still don’t know what to do with this new Web 2.0 phenomenon. As a result, they either do nothing out of fear of doing it wrong, or they plan big, management led initiatives that have little chance of success. Hopefully McKinsey’s report will help companies avoid both scenarios.

Personally, I can’t wait for the day when I don’t have to wade through endless emails and convoluted shared network folders to get my work done.

Skittles.com’s Social Media Experiment - Generating Buzz But Not Without Risks

If you haven’t seen it already check out the new Skittles.com homepage - it’s a bold experiment in how to integrate social media into a brand site.

What’s so unique about the page is that the experience is almost completely based on social media content from other sources. User generated messages, videos and other content are pulled to the site from various social media sources such as Facebook, YouTube, etc.

The only “traditional” element on the page is an expandable navigation bar that, among other things, takes visitors to various social media sites based on whether they want to see pictures (Flickr) or chat (Twitter) about Skittles, etc.

http://www.skittles.com/default.htm

Of course this type of strategy is not without its risks. And it certainly places a lot of control over how people will experience the brand into the hands of the unruly masses. But what a way to generate buzz and engagement.

For One Site Fewer Ads Equals Better Performance

Interesting article today on Adage.com about how one site (SmartMoney.com) is increasing online ad performance by reducing the number of placements on their pages.

http://adage.com/digital/article?article_id=134941

According to the article, Smart Money stopped selling one of three ad units (a skyscraper) and saw a 21% increase in click-through rates.

Not bad for a financial site in this environment and a good idea considering the growth of online ad inventory.

The User Experience Gap

You see the statistics and reports about how more companies are increasing their online ad budgets. You see the incredible growth of social media. And you see the high-levels of time spent online by all age groups (even among seniors!)

But what you don’t see are the steady improvements in Web site experiences you would expect considering these trends. For instance, last June Forrester Research published one of its many “Best and Worst” of site design reports.

This particular report focused on 16 B2C sites of companies across four industries: airlines, banks, department stores and MP3 manufacturers. All of the companies were brand names such as American Airlines, Apple, Bank of America and Macy’s (large companies with considerable resources).

Like most usability testing methodologies, Forrester’s approach evaluated basic site variables like presentation, content, functionality and task flow efficiency. What was remarkable about the test was that all 16 sites failed. And this wasn’t an anomaly, at least when using Forrester’s approach. In March 2007 Forrester submitted 16 different B2C sites to the same usability test. That time around 15 of 16 of the sites failed.

http://www.forrester.com/Research/Document/Excerpt/0,7211,45718,00.html

Which raises the question: if the Web is becoming more important to people in terms of the products they buy and services they use why aren’t companies committing the resources to deliver experiences that are commensurate with this growing prominence?

The short answer is that a lot of organizations are investing in improving their consumer sites but are finding that delivering exceptional Web experiences isn’t easy. This leads us to the long answer which is a bit more complicated.

In my opinion there are several reasons why companies fall short in this area. Some are related to organizational barriers and misguided marketing practices. Others have to do with the failure of some teams to use site design best-practices when planning their Web initiatives.

Organizational Barriers – many times the way a company is structured makes it difficult to generate consensus on a Web strategy and even more difficult to sustain it once implemented. Some common barriers include:

• Highly distributed companies without a strong centralized corporate communications or marketing function
• Companies with multiple lines of business with different value propositions and consumer audiences
• Highly silioed organizations

Misguided Marketing Practices – many companies insist that customers are their most valued asset but some don’t walk the walk when it comes to planning their consumer facing Web sites. This is a result, I believe, of marketing practices that sometimes cause managers to focus on the wrong things:

• Product features as opposed to consumer benefits
• Product differentiation as opposed to consumer relevance
• The assumption consumers are purely rational decision makers
• Downplaying the emotional aspect of how consumers consider and evaluate brands
• Underestimating the experiential dimensions of how consumers interact with brands on the Web

Failure to Use Web Design Best Practices – frequently Web teams short-cut critical activities that can make the difference between a decent and a great site. Sometimes this is because of tight timelines or limited budgets. A common result is a Web site that doesn’t meet the expectations of its visitors and is not set up for long term success:

• Design personas to define the needs of various visitor “archetypes” that will come to a site. They are critical and help Web designers create experiences that are based on visitor, not organizational, needs
• Cross-channel scenario maps to help Web planners consider the full context of how a site will complement other media channels and information sources as a consumer moves through a decision making process
• Governance models to ensure a controlled approach to a site’s design, content and management as it evolves - without governance there is no way to say what changes should or should not be made to a site

The gap between consumer expectations and the state of most B2C Web sites presents an opportunity. To seize that opportunity managers need to take a hard look at consumer sites under their charge and ask themselves whether they deliver a unique and valuable experience for their intended audiences. If the answer is no it’s also likely that they are not adding much value to their brands and business stakeholders either.

The New Velocity

For years managers worried about the velocity of their business. The measurement of how quickly they could get their products developed, distributed, sold and consumed. The theory being that the faster the rate of velocity the more efficient and profitable their business. In other words, you turn over more widgets in a year you generate more revenue. You develop and sell 25% more units than last year with the same assets you’re conceivably 25% more profitable, and so on.

Today, with the growth of social technologies managers now need to worry about a new type of velocity – the speed in which consumer sentiment towards their brands might change (whether for better or worse). Social networking tools like Facebook, Digg and Twitter have given people the means to instantaneously and virtually gather to discuss, share their views and spread potentially damaging messages or content about a brand. People, in many ways, are in control.

It goes without saying that this new velocity makes it harder to manage brand perception and reputation. There are many cases of how people in a matter of hours have used Web 2.0 technologies to wreak significant havoc on brands that have been around for decades. One of the best examples being the You Tube video of the Comcast technician sleeping on a customer’s couch while on a service call. Or the legions of parents who this past November joined forces on Twitter to rail against a TV ad for children’s Motrin (the spot was promptly pulled by parent company Johnson & Johnson).

The result is a real-time, mass consumer feedback loop. The impact is greater transparency and accountability for both corporations and brands. To be successful in this new environment it’s not enough that companies develop, distribute and market new products quickly to achieve optimum velocity. What also matters is how openly they engage with their consumers, how well they listen to them and how quickly they respond to their concerns.

Brands that neglect to use social technologies to build bridges to their consumers and monitor their brand health do so at their own risk. In a time of increasing commodization and decreasing differentiation this could be among the best strategies brands have for a competitive advantage.

“Startups, Not Bailouts”

Author and columnist Thomas Friedman wrote a persuasive op-ed column in today’s New York Times about the folly of using billions of dollars of taxpayer money to bailout G.M. and Chrysler. Meanwhile high-tech startups, our best hope for future growth, are finding it more-and-more difficult to find venture capital in the current environment.

Stated otherwise - why we are throwing good money after bad when we should be doing everything we can to bankroll the risk takers who are trying to bring the new technologies to market that represent our best chance for a prosperous future?

http://www.nytimes.com/2009/02/22/opinion/22friedman.html?_r=1

After reading Friedman’s piece I did some research and learned the following:

• 2008 marked the first yearly decline in venture capital (VC) spending since the post dotcom bubble year of 2003
• What’s worse - VC investments in Q4 2008 dropped precipitously from the prior quarter (26%) as well against the two year trailing average
• What’s even more worse (at least for someone like me who works in an Internet related industry) - Internet-specific VC investments in Q4 also dropped by 26%

U.S. Venture Capital Investments 2001 - 2008

See PriceWaterhouseCoopers “MoneyTree Report:”

https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/National_MoneyTree_full_year_Q4_2008_Final.pdf

So basically the story goes something like this:

During the past 30 years G.M. and Chrysler have been steadily losing market share and have lost hundreds of billions of dollars. So what does the government do? It gives them billions of dollars more (the latest installment $25 billion) to prop them up because they are “too big to fail.”

Meanwhile, during the same 30 year period it was high-tech companies (many of them startups) that were among the most powerful driving forces of economic growth. But sadly in this climate of limited resources it’s likely that the next Amgen, Google or Microsoft will have to get in line behind the down and out from Detroit before it will get government funds to invest in new innovations. Seems like folly to me.

Don’t get me wrong, the recent stimulus legislation will do a lot of good for high-tech industries. For example, funds were set aside for rural broadband and the digitization of health care records which is a start. And while the Obama economic team has made some good moves in their first 30 days there is so much more that can and must be done if we’re going to have a vibrant, innovation-led economy in the coming years. In this zero-sum environment giving G.M. and Chrysler $25 billion was not one of them.

U2 CD Leak – Blunder or PR Stunt?

The release of U2’s new CD, “No Line on the Horizon,” is planned for February 27. But it appears they have run into a bit of a SNAFU.

Someone at Universal Music, U2’s music publisher, accidentally put the CD up for sale on getmusic.com.au (the Australian site for Universal’s Get Music online music service) almost two weeks before the official release date. Not surprisingly someone purchased the CD before it was taken down and it wasn’t long before it appeared on peer-to-peer file sharing sites where people are now downloading it for free.

The fact is that most CDs are leaked before official release dates. Which raises the question: was this a blunder or a stunt by U2’s management to generate buzz and pre-empt other leaks to better control publicity around the release?

It’s more than a little suspect that U2’s music publisher “accidentally” posted the CD for sale two weeks before launch. And it has been five years since U2’s last CD (for many artists a dangerously long hiatus). On the other hand, U2 is one of the most recognizable and respected brands in the music business so they’re certainly not suffering from low awareness.

If a stunt, it was nowhere near as sophisticated as Radiohead’s pay-as-you-choose release of “In Rainbows” on its own Web site. Unsophisticated is very un-U2 and considering their strong stance against music piracy it’s likely that this was simply a mistake.

But the fact that it’s a week before the release and buzz is building and people are listening begs the question: when will music labels and publishers accept the future of music distribution and figure out a way to become relevant again?

The Online Ad Industry Needs to Get Serious About Privacy

In a previous post I discussed dynamically generated display ads and how they represent the next wave of innovation in online advertising.

http://marketingmemes.blogspot.com/2009/02/now-appearing-at-browser-near-you.html

Unfortunately, this next round of innovation is potentially in jeopardy. A critical component of this evolving online ad model is a technique known as behavioral targeting (BT). BT involves making assumptions about a person’s interests based on things like the Web sites they visit, their profiles on social networking sites and the types of things they search and then serving them customized ads based on those assumptions.

FTC's 2007 Guidelines
While the data used by BT methods is anonymous, there is still quite a bit of controversy around the technique. Privacy groups criticize it as intrusive (if not creepy). And the Federal Trade Commission has been keeping an eye on BT since December 2007 when they issued voluntary guidelines to Web sites delivering targeted ads in an effort to protect consumer privacy.

Apparently, no one was listening. Last week the FTC issued a follow up report on the issue. The report reinforced the FTC’s commitment to industry self-regulation (i.e., voluntary compliance) but this time added tough words for the online ad industry which it claimed is not moving fast enough to address the privacy issues. They also commented that if the industry does not make substantive efforts to address these concerns regulations or even legislation might be required.

http://www.ftc.gov/os/2009/02/P085400behavadreport.pdf

Concerns with Current Privacy Practices
Privacy groups and the FTC have a host of grievances with current targeted-ad practices:

• They don’t clearly explain what information is being collected and how it is being used
• The explanations are not easily accessible and are normally buried deep in lengthy privacy policies
• They are not convinced that the data collected is completely anonymous
• They are concerned that Web sites are combining personally identifiable data (addresses, birth dates, etc) with anonymous data captured through BT methods

What the FTC is Requesting
The FTC report laid out guiding principles for Web site privacy practices including provisions for:

• Clear, accessible and plain language statements about the behavioral data they’re collecting and how it will be used
• An easy way for consumers to opt-in or out
• Security policies for collected data
• The length of time data will be retained considering legitimate business needs

The report was not specific regarding the types of notice Web sites should provide to consumers. Some have proposed links on banners that lead to an explanation of the data collected, how it will be used and opt-in and opt-out features.

Regulation and Innovation – Rarely a Good Combination
eMarketer is projecting a 300% spending increase in targeted online advertising in the next three years – strong growth in a down economy. A lot of this growth will depend on investments Web sites make in new technologies to enable more sophisticated ad-targeting.

The last thing we need is for the government to dampen that growth by imposing a set of onerous regulations. The online ad industry has a clear choice: figure out a way to improve online consumer privacy notifications or the Federal government will figure it out for us.

What Will the Internet Look Like in 2020?

The nonpartisan Pew Internet and American Life Project recently posed that question to over one thousand members of the digital elite (analysts, policy-makers, academics, technologists and other Internet experts).

Pew asked them if they agreed or disagreed with various scenarios regarding the social, political and economic impact of the Internet ten years hence. The scenarios spanned everything from the effect of the Internet on social tolerance, to the impact social computing will have on individual transparency and responsibility, to the blurring of boundaries between professional and personal lives.

http://www.pewinternet.org/PPF/r/270/report_display.asp

1. More powerful and better designed smartphones will be the primary means of Internet access for a majority of people across the world

The good news: Greater access for all - more people (especially the poor and those in remote locations) will have access to the Web through affordable, readily available mobile devices.

A big unknown: Will governments, regulatory bodies and wireless carriers align behind one universal standard for connectivity? Not likely if the current CDMA versus GMS situation in the U.S. cellphone market is any indication.

2. The ability of digital communications and social networks to rapidly spread information will result in a less socially tolerant global community

What this means: More tribes, more fragmentation, more polarization and more people using the Internet to spread hate, dogmatism and even fanaticism.

On the other hand: Increased access to information can mean more government, corporate and individual transparency and the potential for greater cross-cultural understanding.

Let’s hope this trend appeals to the better side of human nature.

3. Copyright and intellectual property protection will still be elusive

The good: More free online content (is it possible that the Wall Street Journal online will one day abandon its paid subscription model?)

The bad: More regulation and complex IP-control technologies and even more entangled workarounds to circumvent them.

4. As social media grows individual transparency (if not responsibility) will increase and privacy will become an even scarcer commodity

The new creed: “Never trust anyone who doesn’t have embarrassing stuff online.”

But people will still set boundaries: As one respondent commented – “Although society will seem more transparent, most people will guard many…aspects of their lives with great tenacity.”

5. The growth of artificial worlds and augmented reality means that some people will spend just as much time in virtual reality as they do in “real life”

The upside: More realistic virtual environments will be used to drive advancements in education, engineering, medicine and science.

The downside: For some people it will mean increased isolation, alienation and even violence and more sedentary lifestyles.

6. Ubiquitous computing will make it harder for some workers to separate their professional and personal lives

The positive: An always-on culture will have benefits such as time shifting and more employers may finally start measuring results (i.e., completed work) versus activity (i.e., time in the office). And to paraphrase one respondent, it’s not hard to argue that the 9-to-5 workday was an industrial era creation that doesn’t apply in idea driven economies.

The negative: This hyper-connected lifestyle will be bad for familial and social stability, and will increase stress levels and the likelihood that businesses and governments will use technology to intrude into people’s private lives.

For many, especially those in Internet related industries, this is already a reality so as one respondent said: “get over it.”

7. The basic architecture and technology of the Internet will not change but will evolve; a less secure Internet will cause some to create gated communities

Don’t expect a new “clean slate” Internet, it will take too long and cost too much: Improvements will occur gradually as security and performance requirements demand a more advanced platform. Incremental enhancements such as Internet Protocol v6 and the Semantic Web (allowing easier access to online content) will slowly improve performance.

Do expect more “walled gardens” and other restricted areas of the Internet: In response to the increasing frequency and scope of security breaches, large entities and other online communities will create secure environments where members will give up some control and privacy in exchange for added protection and utility.

Bottom line - the Internet will evolve dramatically over the next decade. And for better or worse many of the economic, cultural and social trends that it instigated will become more pronounced and prevalent in our lives. Let's just hope we don't lose control over it against our collective best intentions.

Integrated marketing is harder than it has to be

Many big companies (certainly those in the Fortune 500) use more than one agency for campaigns encompassing multiple communication mediums. A common scenario might look something like this:

• Big brand agency for national TV and print brand campaigns
• Digital agency for Web design, online advertising, email and social media programs
• Direct marketing agency for targeted customer acquisition and retention efforts
• Promotions agency for trade and shopper marketing and field merchandising support
• Multi-cultural agencies for Hispanic, Asian or African American specific campaigns
• And so on…

There’s one critical problem with this scenario. For several reasons when two or more ad agencies are engaged to create an integrated campaign achieving great work becomes hard, not impossible, but hard.

There are many causes for this, but I think the main culprits are:

• Client side practices (especially in the area of briefing) that discourage inter-agency collaboration
• Inter-agency competition
• A lack of cross-trained, multi-discipline marketers on both the client and agency sides
• A cultural divide between the types of agencies involved

In my opinion with one exception these causes are hard to manage let alone eliminate – here’s what I mean.

Inter-agency competition will never go away
Agencies are always competing – it’s part of the business. And they compete on many levels: for the account, for their ideas, for a bigger share of the marketing budget, etc. Agency competitiveness is driven by ambition and ego; hard things to change let alone eliminate.

Training multi-discipline marketers – nice idea, but unrealistic
The notion that multi-lingual marketers can be created through some kind of corporate training program is not only naive, it’s a contradiction in terms. This is especially so with respect to agencies.

We have specialization in marketing communications for a reason. It’s a response to our increasingly complex, multi-dimensional and tech-driven culture. Specialization is an outgrowth of this complexity. As a result each marketing discipline has its own idioms, methodologies and techniques. These are not things that can be learned, at least not beyond a superficial level, through a training program.

Bridging the cultural divide – good luck
Habits, old and new, die hard. Agencies like all organizations are creatures of habit. For example, while some of the big brand agencies are starting to break away from the formula they have used for over fifty years, many still default to the 30 second spot as the central creative device. On the other hand, digital agencies think of interactions and non-linear experiences. While direct shops focus on driving response. Etc, and so on...

Along with these different approaches come different thought processes, value systems and theories on how things should work. The assumption that you can lock these different agency types in a room and they will miraculously and seamlessly collaborate is crazy – it’s mixing like oil and water.

Clients hold the keys to success
I think the best opportunity for getting great, high-impact integrated creative starts with clients. But the fact is that the engagement models many clients have in place are not sufficient to meet the challenges of a multi-agency arrangement. That said, I think there are at least two things client marketing organizations can do to meet the challenge.

1. Consider universal briefing and an inclusive approach to concept development - big ideas can come from anywhere. And in many instances the more agency minds working a creative problem the better. What’s needed is an environment where multiple agencies can collaborate and riff off of each other’s ideas as opposed to working in channel or audience specific silos. Consumers, after all, experience brands across multiple channels and touch points; the creative process should align with this reality.

All too often one agency, usually the brand agency, is briefed on a new assignment before all other agencies (who sometimes are not briefed at all). Clients should consider changing this practice by briefing all agencies at the same time with a universal brief that considers all channels and audiences. Then task each agency with coming up with ideas that both meet their specific channel/audience needs and are big enough to extend beyond as well. Then let the best idea win.

2. Use a program management approach to coordinate inter-agency activities - coordinating and synthesizing the myriad activities a large integrated marketing program involves is a complicated undertaking. Many client marketing organizations, unfortunately, don’t have the right processes in place to effectively meet this challenge.

Here’s where program management can help. Program management is the process of managing multiple projects towards a certain outcome (as opposed to project management which focuses on outputs) and has been used for years to coordinate complex technology implementation and software development initiatives.

In the context of integrated marketing, program management can help ensure that all agencies and client marketers are aligned and working towards a common goal. 

For example, program management techniques would require that client managers focus on orchestrating the full portfolio of cross-agency activities. Instead of looking at things from a channel or audience perspective, client focus would be drawn to the macro level and determining if activities across the portfolio are advancing in a way that best meet the desired business and marketing outcomes.

Another benefit is that program management techniques can be easily learned. There are four key aspects of program management that involve skills that most managers already possess; it just changes the focus and manner in which they are used:

• Strategic planning
• Governance (including definition of roles and responsibilities)
• Ongoing management of project and program level activities
• Financial management and control

Clients should want their agencies to focus on creating great work that drives results – not competing with one another and jockeying for position. The stakes are too high and the budgets are too big especially in this era of limited resources. While nobody likes excessive process I’ll take a little process over the alternative – ineffective and disintegrated marketing that no one is happy with.

Designing a corporate social media program? Plan carefully to avoid mishaps and unnecessary brand risk

It’s not news that many brands are using social media as a way to build brand preference, drive sales or increase customer satisfaction. In many ways social media is becoming table stakes for any brand that wants to generate awareness or stay engaged with today’s Web savvy consumer. These consumers expect it from companies they transact with and, in many instances, will reward them by being more loyal or even advocating on their behalf.

Social media programs, however, aren’t always successful. An October 2008 Gartner report predicts that 50% of future social media initiatives among the Fortune 1000 will be classified as failures. And social media programs do not come without brand risks. Two notable examples of brands that got into a social media storm include Dell Computer Corps’ infamous “Dell Hell,” and Wal-Mart’s fake “Wal-Marting Across America” blog. And, no surprise, the deeper the engagement enabled by social medias the greater the potential for brand risk.

Key issues to consider when planning a social media program
Despite the risks and high failure rates many organizations are still forging ahead with social media. If your company or client is one of those organizations consider the following factors first:

1. Be clear on your business objectives – some examples:

• Improving brand perception
• Increasing customer satisfaction or loyalty
• Creating a place where people can discuss product features or exchange best practices
• Reducing service costs
• Developing a dialogue with your customers
• An early stage warning system for bad customer experiences
• Monitoring social data to gauge sentiment

2. Identify the social media tactics that are best equipped to meet those objectives:

• Managed communities, polls or moderated comments
• Support forums
• Blogs
• User reviews and other user-generated content
• Wikis

3. Develop a plan on how to respond to any unforeseen brand backlash perpetrated by disaffected consumers:

• Disgruntled customers
• Customer complaints
• Negative reviews
• Pranksters

Corporate social media programs can be a powerful tool to build brand equity and increase sales. But they need to be approached in a sensible and planned manner.

Start small with low risk programs such as managed communities or polls. Then listen, learn and adjust. As your audience grows it might make sense to move on to higher engagement tactics such as user reviews, forums, wikis or other user-generated content.

And don’t forget that most social communities don’t just form by chance. In most instances a social media program will not on its own address low levels of brand awareness or Web site traffic. But it certainly can help in those areas if it’s part of a well thought out plan and provides value exchange to your intended audiences.