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.

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.

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.

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.

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.

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.

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.

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.

You never want a serious crisis to go to waste

David Leonhardt, economics columnist for The New York Times, wrote an interesting though somewhat depressing article called “The Big Fix” in yesterday's Sunday Magazine section. In the article he outlined the challenges our country will face trying to revive the economy without the old stand-by growth engines of Wall Street and consumer spending.

http://www.nytimes.com/2009/02/01/magazine/01Economy-t.html?_r=1

One positive in the article, at least for me, was when Leonhardt quoted a statement that White House Chief of Staff, Rahm Emanuel, made a couple of months ago about what is probably the only upside of the crisis:

“You never want a serious crisis to go to waste,”

What Emanuel meant was the that the severity of our situation is so bad that it could actually be a catalyst to make some of the transformative changes we as a country have been putting off for years but are needed if we’re going to get out of the mess we’re in.

That got me thinking. Whether you like it or not the federal government will play a lead role in shaping the future of our economy. However, the private sector, as always, must and should play a lead role as well. One of the ways that will happen is when companies start investing again in programs that put people to work whether that be new product launches, Web redesign projects, software upgrades, etc.

This is where people can make a difference. Whether you’re a middle manager in a large corporation, a software salesperson or, like me, an account guy at a marketing services firm, you, with a little bit of ingenuity and courage can do something to help get this economy going again.

Here’s what I mean.

Emanuel’s quote reminded me of something I read years ago about IBM’s Chairman and CEO, Sam Palmisano. Palmisano rose through the ranks of IBM’s vaunted sales organization. One of the tactics he used to use on sales calls that were not going well was to ask the executives he was meeting what their toughest business challenge was. Then, like any good sales executive, he would get their consent to come back with some ideas on how IBM would solve that problem. He would use that next meeting as an opportunity to ask for the assignment. Essentially, Palmisano was creating an opportunity where none existed (this is what sales professionals call solutions selling).

So, the next time you’re in a meeting with your senior managers or a client, or on a sales call try to create an opportunity where none exists by asking the tough questions. Get them thinking of the possibilities that can be realized by addressing the tough problems they have been avoiding for years and have been holding their business back. Here are some questions to get you thinking:

• What are our/your toughest business challenges?
• Is our/your top-of-mind unaided brand awareness where it needs to be?
• How much money are we/you leaving on the table because of poor customer experiences?
• What are the costs to our/your organization of continuing to delay implementing that customer retention program despite high lapse rates?
• What is the impact of not addressing these challenges on our/your ability to create shareholder value and a healthy return on equity?

Then, and this is the most important part, go back to your desk, cube or office, get your team or department together and brainstorm ideas on how to solve these challenges – now.

No one really knows what the next engines of economic growth will be (infrastructure projects, the digitization of our health care system, etc). What I do know is that nothing makes executives focus like a crisis and if they’re shown a way forward that generates results they will give it serious consideration. You really can’t ask for much more in this current climate.

Now appearing at a browser near you - online advertising 3.0

Despite all the advances in digital marketing, the process by which online ads are produced is still manual for the most part. And, once these ads are placed they are largely static; if updates are needed (e.g., if the ads are not performing well) some level of human involvement is required.

This situation is changing thanks to process and technical innovations that now allow advertisers to serve and update their online ads dynamically (i.e., automatically) by leveraging a combination of predefined business rules, real-time data, algorithms and pre-developed creative assets. The financial and strategic benefits from these innovations, while not yet fully realized, will be huge for the $28+ billion U.S. online ad market.

The next wave – more efficient production = reduced costs for marketers
The amount of time and money that will be saved by these innovations cannot be underestimated: web designers and developers no longer have to build by hand every online ad unit to every size; and agency media managers no longer need to send scores or even hundreds of ad units to web site publishers.

In terms of marketing effectiveness the impact of these innovations will change the game for online advertising. Advertisers can now do complex, multivariate testing and deliver custom, just-in-time creative that is more relevant and targeted to specific marketing situations.

Automating multivariate testing
Advertisers can now test a conceivably unlimited number (easily into the hundreds) of banner creative configurations to identify the combinations of elements (messaging, imagery, call-to-action, etc) that deliver the best results. Previously, this level of testing was highly impractical since the effort needed to create the number of banner versions to generate statistically relevant test results made it cost prohibitive; in most instances costs simply out-weighed benefits.

More relevant, effective and efficient online ads
This is where things get interesting. Marketers can now deliver much more relevant and targeted ads to consumers by combining customized, just-in-time banner creative with a variety of data about their target consumers, including:

• Geography
• Prior online behavior
• Their stage in a multi-step shopping/purchase decision process
• The editorial focus of the web site where the ads will be placed

Here are some examples of how these innovations are being used to deliver more relevant online advertising:

Sequential messaging – banner ad messages change based on where a consumer is in a multi-step shopping/purchase decision process (this is especially useful for highly considered purchases like automobiles, health insurance, etc)

Contextual messaging – banner imagery and messaging change based on the editorial theme of the site where an ad is running (e.g., personal finance, sports, travel, etc) to increase contextual relevance

Geographic targeting – here ads are customized with messaging or imagery that is relevant to a specific state or region of the country

Real-time targeting – ads can also be updated with real-time information (e.g., sports scores, time of day, weather) using live data feeds to create timeliness or a sense of urgency

While many of these online targeting approaches were previously available the ability do it dynamically wasn’t. So the next time you see an online add that is uncannily relevant to your unique situation it probably isn’t a coincidence. Some people may think this level of targeting is spooky. Personally, I prefer this over the alternative – like seeing ads for Brilliant Blonde Shine Shock hair treatment on my Yahoo! Mail sign in page.

So, marketers what's your empathy quotient?

We have all heard of emotional intelligence (EI) and the emotional intelligence quotient (EQ), but should we all be thinking about our empathy quotient? We will if business strategist and adjunct Stanford professor, Dev Patnaik, has his way.

Marketers and consultants have been preaching to their corporate clients for years about the benefits of making their organizations more customer-centric (indeed, many a multi-million dollar CRM project have been sold based on the promised benefits). But it's not always easy with all the internal politics, management layers and departmental silos that sap the energies of so many corporate managers.

An interesting new web site, http://wiredtocare.com/ blog and book by Patnaik makes a compelling case for a different, more intuitive approach to making companies more customer-centric (and prosperous) that is based on the innate human ability to empathize.

More empathy = more relevant products and services

While the idea of becoming more customer focused is not new, after a quick glance through a hard copy of Patnaik’s book (it’s not available in Kindle format - yet) it seems he may be on to something. He goes beyond making the well worn case that companies need to "align" with its customer's by actually showing how managers in several organizations have become more empathetic with their customers.

Patnaik shows how companies that embrace this approach have a deeper, more visceral appreciation for the needs, wants and expectations of their consumers. The ultimate payoff, of course, is that these organizations are able to bring services and products to market that delight their customers.

Many marketers have known this for years. For those that don’t yet get it this could be a useful tool. Now, if Patnaik could just get his book published in Kindle format I’d be delighted too.