Richard Branson interviewed by Seth Godin

For the small business person aspiring to grow, it is inspirational to see Richard Branson on Open Forum speak about checking the bills monthly when his business was still small. Note that the interviewer here is none other than marketing guru Seth Godin. Any business seeking to validate return on marketing investment needs to understand how the money is being spent. In larger marketing organizations brand managers don't always see the actual invoices. It's a good practice to be sure marketers see the invoices if they are to held accountable.

2008 Marketing predictions and 2009 trends

Last year, I suggested watching these trends in 2008. No, I did not predict the recession, nor did I predict that the primaries and election politics would be so engaging.

10. Mobile Marketing. i said we are still in the experimentation mode. I think this is still true, although the footprint is expanding. The U.S. still lags Asia. Look for more advanced promotional marketing, and movement beyond the test and learn stage in '09

9. Green. Still a hot topic as the year ends, but the discussion seems to have wanted as economic anxiety has risen. It will stay on the radar in '09.

8. Creativity. It's time to get creativity back in our marketing programs. Not just great creative (the art) but creativity as marketers, bringing new approaches and ideas to the market. There's so much untapped potential with the capabilities marketers have today versus just a few short years ago. I said that a year ago and not much has changed. Lots of potential here for marketers!

7. Investment Thinking. I said, "Marketing measurement is ready to hit the mainstream and move beyond lip service...it's not that creativity doesn't matter - it matters a lot. But as a means to an end, and the end must be measurable." Result for 2008 - it's still true and some progress was made in '08. Look for increased accountability in 2009 as budets tighten and accountability increases.

6. Mass Is Dead. I said, "We've all heard it. It's true. The writer's strike, if it lasts, will be the proof. No one will miss network or even major cable shows after a while." Result" On target. Does anyone really miss Lost or American Idol?? Targeted media is the trend. SBTV.com for examle, :)

5. Direct is Alive. Online. The ability to converse with your customer in a 1:1 opt-in world is like finding a haystack full of needles. Still true.

4. Integrate. I said, "Integration of marketing processes into the selling process. Integration of all marketing element from strategy through execution, across media, web, promotion, packaging, etc.. It's all about marketing systems. Connect the dots so it all makes sense, then measure every step." Marketers are trying, although not many have solved it.

3. Narrowcast. Such a cool trend. "Micro-media networks are like micro-breweries. You may not always like the taste, but you have to experience them. Look for targeted messaging to grow rapidly as networks expand and begin to appear in places you've never thought of -- how about your local bank or dry cleaner?" Love this. Still true for '09. More to come!

What, no #2 or #1? I told you I'd try to keep it short. And leaving out #1 and #2 might spark your own creativity. What else will happen in 2009?

Long tail search marketing has history in old forms

Long tail search on the web has existed in traditional print for years. Well, sort of. Small niche vertical publications have existed
For years. These niche publications were created to reach specific consumer or B2B audiences and to allow marketers targeted, efficient advertising opportunities. It's a crude version of the long tail search concept online today. The difference is that the current online approach offers much more data andeasuremt of return on marketing investment.

ROMI visibility heightened

Marketers will be pressed to demonstrate results as budgets are challenged, and it will be hard for those with pet progams to defend retaining them unless they can demonstrate return on marketing investment. My favorite marketing statement, "Facts Find Funding" is truer than ever in these times.

Long tail Search Offers ROI

Great comments by Bill Tancer of Hitwise on the importance of understanding the long tail of online search behavior. His comments in "Sizing Up The Long Tail of Search" are backed up quantitative data to support his contentions. He shows that the long tail begins after only 18 seach terms out of 14 million, with those 18 terms comprising aobut 3.25% of searches. Tracer notes that if you had a complete monopoly of the top 1000 search terms you would still miss out on about 90% of all search traffic. Then for fun he notes that "if search were represented by a tiny lizard with a one-inch head, the tail of that lizard would stretch for 221 miles." Ultimately, the point is to validate that almost all search activity is beyond the reach of owning the big single keyword for your business.

Marketing Witz - Brand Strategy and Measuring Return on Marketing Investment (ROMI): Are You First In Line? Marketing during Recession

Marketing Witz - Brand Strategy and Measuring Return on Marketing Investment (ROMI): Are You First In Line? Marketing during Recession

Return on Marketing Investment for Small Business can exceed Big Business

Warrillow & Co., who was recently acquired by The Conference Board, comments in their most recent e-Mail newsletter about the ability of small business to survive in the tough economy because, unlike their larger corporate counterparts, most small businesses are not dependent upon bank borrowing to improve return on equity. Marketingwitz is thrilled to see that Warrillow appears to be thinking about balance sheets over income statements, as suggested in an earlier (3/16/08) MarketingWitz post.

ROMI, return on marketing investment, can be very favorable for business with healthy balance sheets in turbulent economic times. Most small business operate with positive cash flow and thus are not as dependent on the banks for day-to-day operating capital, and only 11% of small businesses, per Warrilow, rely on bank loans to acquire or start.

With more and more layoffs in the corporate section, and 516,000 new unemployment claims last month, look for a surge in new startups. The economic rebound will start on Main Street, not Wall Street.

Marketing Ins & Outs in Down Economy

Outs: Conspicuous Consumption, Indulgent Foods, Exotics (unless healthy), Spas, McMansions, Exuberant Expectations, Hummers,

Ins: Cocooning, Family, Home and Hearth, Home-baked, Safety, Value, Steadfast, Trusted, Reassuring, American, Security, Education, Self-Reliance, Heroes, Home Repair, DIY

Is your brand message aligned?

Maintain Business Databases for Optimal Marketing Performance

Interesting video interview with Eric Groves of Constant Contact advising businesses on maintaining business databases. Worth a view on SBTV.

Content Was King

"Content is King" has long been the mantra for successfully driving visitors to web sites under a paradigm that declares that consumers and customers will flock to sites with the most relevant information. This model generally worked as long as marketers could promote sites and generate initial visits. The fallacy is that the "Content is King" model lives in the old push model of content delivery. The advent of social marketing capabilities and the corresponding ability of consumers and customers to generate their own media/content leaves the content push model behind. Generating traffic and return visits is becoming a function of the ability of your audience to engage and immerse themselves by interacting with one another within your online environment. If content was King, "Place" is now Queen. Is your site a recognized and compelling Place for your customers to congregate? Increase your ROI on web marketing investment by offering a compelling Place rather than exclusively pushing Content information.

One more comment - I love the phrase "consumer generated media" rather than "consumer generated content". First labeled by old compadre' Pete Blackshaw (Nielsen Online), "user generated media" focused on the notion that users create media for consumption by others, making the process an interaction rather than simply a push of content.

Marketers Must Innovate as Economy Tightens

When times are plentiful it's easy for marketers to become complacent. As the economy becomes increasingly challenging every business is looking for new revenue streams. Now is an excellent time to evaluate your current sales and marketing strategies, and look for new innovative approaches. Yesterday, I heard a sales manager bemoan the recent drop in new customer orders. Yet it was apparent that he wasn't modifying his approach to new customer acquisition. As the economy changes, what changes are you making?

One way to consider new alternatives is to assess each of the traditional 4 P's and ask whether your offerings match the current times: Is your product offering appropriate or is there a new feature or way to combine your product/services for your target customer base? Are there new markets that offer new places to sell? Pricing is an obvious lever in tough times, but think about creative ways to bundle offerings rather than simple price competition. Think about all of the terms in your contracts that might offer new ways to be creative. Are your promotions communicating to your customers in the right way? Are they supporting your core value proposition or competing with that proposition?

Now is a great time to evaluate your marketing approaches to maximize return on every dollar spent.

Yellow Pages ROMI versus Online Marketing

A new thick Yellow Pages book was dropped on my front lawn this week. The two thoughts that immediately entered my mind as I bent to pick up the book were: 1. Where will I put this huge book?, and 2. How much money have all these firms wasted? With the exception of perhaps some very local retailers, most of the money spent on ads in the Yellow Pages has been a waste. If you need a number, find it online. If you need to find an address or hours of operation, check the company website. The premium for Yellow Pages ads is just too high. If you're a samll business and want to fund an online marketing effort, cancel your Yellow Pages ad reallocate those funds.

Marketing return during slow times

As the economy continues to struggle business investment will decline, furthering the economic woes of 2008. Marketing spend will be a casualty. This need not be bad news for marketers, except for those locked into an old model where success is dependent upon size of budget. Successful marketers will be fine-tuning programs to demonstrate and expand programs with positive ROI. Not measuring return on marketing investment? What's your excuse?

Negative Advertsing in Politics versus Consumer Brand Marketing

One further comment on politcal brand marketing. See the excellent comments at http://hbswk.hbs.edu/item/5937.html which discusses the role and value of negative advertising in political elections versus consumer product marketing. From my perspective, the zero-sum winner-take-all nature of elections differs markedly from the consumer marketers trying to grow categories and take share from competitors in an environment where products rarely change formulas and no formal deadlines exist.

Democratic Party brand value proposition

Stepping aside from the typical post about Marketing ROI, today's comment is on political branding. Regardless of your politcal inclinations, it's a fascinating situation to watch from a brand marketing perspective. Did you see the speeches by Hillary and Bill Clinton over the past two nights at the Democratic convention? It's a classic case of attempting to integrate all brand messaging into a cohesive brand value proposition. In this case, built around the candidacy of Barack Obama. The brand messaging has been fractured in a highy public way during the competitive primary season. As with any brand shifting it's core communication, the key question is whether the target audience finds the new messages (from Bill and Hillary) relevant, cohesive, and believable. For the Democrats, time will tell. For your brand, is your messaging consistent?

Online Marketing ROI: A Web Site ROI Mental Model

Mental models and analogies often help explain software and technology when experts are explaining solutions to business owners who are not technical experts. One of the dangers is that as technology changes those mental images must adapt to reflect the new state. For the past decade the primary mental model for the traditional web site has been a traditonal house. Thus, the use of the term "Home Page" as a point of entry to a web site, with a variety of rooms for "Visitors" to "Enter". We spend countless hours perfecting our Home page because we know that the entrance is the most important moment to make a positive impression.

The model has changed. The rapid evolution of Search as the primary method of traveling the web and the advanced use of SEO tools to drive users to pages of a site means that many visitors to web sites no longer visit the home page as the point of entry to the site, if at all. I sugges that that the new mental model in no longer the Home, but the Apartment building. Any particular visitor may visit any particular apartment (page)as the point of entry. As the site owner, all of your apartments must be optimized and prepared to make a positive impression on the visitor, and each apartment (page) must consider where you want the visitor to go after completing the visit to that page. So, maximum ROI from marketing investment in the web site must consider optimizing across the site and not simply the Home Page.

Let MarketingWitz know what you think about this updated mental model.

Marketing ROI: Don't Talk to Strangers

One of the most basic lessons from childhood applies to internet marketing strategies as well as how to behave as a kid. Remember being told "Don't talk to strangers?" Apply this lesson to your internet marketing strategies to generate increased ROI. Collecting visitor and customer data is important to help segment your audience and then communicate effectively to each segment, and personalizing your communications will generate an even stronger conversion rate. Aberdeen Group has validated this in a recent study, concluding that personalization improves response and is an effective tool used by best-of-class marketers. So, get to know your site visitors, invite them into the site, capture user data, and communicate with these visitors in a way that reflects and demonstrates an understanding of their needs. This will result in increased conversion rates and improved ROI. In short, talk to your audience and don't talk to strangers.

Transactional Consumer Data can drive Marketing ROI

Credit card companies and other firms with transactional data mine that information to generate targeted marketing communications to generate high ROI campaigns. As marketers this is what we try to accomplish. But let's take the power of transactional data farther. What if, in addition to marketing to consumers based on mining transactional data, we put the informative power of the information into the hands of our consumers? Scary? Perhaps. Consider this. If MasterCard, Visa, or American Express were ubiquitous and able to capture all of my transactions (ok, Amex may not have the retail footprint), and track changes in spending behavior, what would it be worth to me to view these trends? I'd certainly be open to using my MC or Visa exclusively to be sure the analytical information delivered to me represented my full spending.

Think about the power of this exchange: In return for my commitment to increase my 'share of wallet' (transactions) with my credit card provider, they deliver to me compelling information about my spending behavior patterns. Suddenly, my credit card provider is an asset as my partner in managing my lifestyle spending rather than simply being a transactional cost center. By changing the thinking and approach to how the data is used, this could take the relationship to another level and generate a powerful ROI to the credit card firm.

Note that this could also work in other realms. If my local grocer provided a comprehensive analysis of my grocery shopping trends (think of charts similar to your mutual fund reports) I would be more willing to provide 100% share of my grocery shopping to that grocer to ensure that the information accurately reflects my total behavior. (Hey, I've been eating more veggies, and less meat....but I'm buying more ice cream these days.)

The key point is that marketers can enhance ROI by recognizing the power of the data that they own and how that data is presented to customers.

Brand Value

Brand marketers can learn about ways to drive the ROI and value of their brands by learning from other disciplines. For example, in the world of business acquisition and sale the factors that are used to analyze core business valuation can be used to assess the strength and potential ROI of an existing brand. Buyers and sellers will conduct a SWOT anaylsis of the business, just as brand marketers anlayze the competitive strength of brands. In the acquisition world, the multiple used against EBIDTA is generally larger for larger businesses than small businesses. So to, this general rule might be applied to evaluate the relative strength of a brand. Larger share brands are generally (although not always - strength in a key niche can be valuable) more valuable than lower share brands, and there has been sufficient research conducted to document the strenght and added value of being the share leader. Business valuations typically also look at the concentration among key customers. Too much business with a core customer may lower the overall valuation because of the increased risk. This holds true for brands - too much concetration with WalMart can be dangerous for the brand. Business valuations may be lower for business where the owner is sole rainmaker and future sales are at risk when a change in control occurs. For brands, brand value may be at greater risk when a brand spokesperson or long-term brand leader has too great a role in the personality of the brand. So,take a moment and see what you can learn by looking at your brandin the eyes of a potential buyer.

Marketing Benefits the Community

Today's Post is a bit of a diversion from our core topic, but still an observation of Marketing. I was in attendance at a local awards ceremony last evening where organizations were being honored for programs that represent collaboration to enhance the local community. It was great that four recipients were a collaborative client team that I've worked with, but what influenced me as I listened and learned about what various organizations were doing for the local community, was that it reinforced a fundamental belief that there is a great deal of good to done in the world. And, importantly, the marketing professionals can and do play an important role in many of these achievements. As I listened, I was encouraged by the passion and commitment demonstrated by the individuals who comprise these collaborative efforts. So, my message to everyone today is that while marketing may often be demonized and, at times may be used for less than honorable goals by less than honorable people, marketing can and is often applied for the betterment of consumers and citizens. Go Marketing!

Will brand personalization generate profit?

Interesting comments are popping up in the marketing literature regarding the advent of personalization of brands. This trend has been growing over the past several years and has become more prominent as technology permits efficient implementation of persoanalization. Jim Holbrook, CEO of eMak, summarized the shift toward personalization of brands in a recent eMak e-mail, saying "Now its about brands conforming to consumer preferences, rather than consumers being conformists." In other words, why wear an Izod logo shirt or a Nike cap, when you can personalize your blue jeans to your exact style and size, wear a personalized cologne, and create your own pizza combination (including naming and posting the pizza combination for others to view)?

As consumer marketers, this trend toward personalizing the brand experience is exhilirating because of the many marketing opportunities that it creates (can't you feel the energy of the agency creative teams buzzing on this topic?), but care must be taken to ensure that both short and long-term ROI can be generated from impact of personalizing the brand. Can it be achieved? Yes. But not in every instance. Marketers should evaluate the cost structures implicit in personalization and ensure that the consumer response will justify the operational impact. Ask whether the personalization of the brand permits the brand to command a premium in the marketplace.

Marketing Dashboard

A Google search on "Marketing Dashboard" generates 285,000 responses. That's a phenomenal number given the relatively few businesses that actually use a marketing dashboard.

After speaking with several marketers recently about the use of dashboards, I came to a seemingly obvious but critical conclusion. A dashboard is only as good as the data feeding it. A marketing dashboard is only useful if it ties to the marketing objectives and performance goals of the organization. Without this connection between marketing data, marketing objectives and business performance metrics, the dashboard is only a sexy gadget. Generally, marketers love gadgets. But this one won't gain you any support without the proper alignment.

A short but nice overview of marketing dashboards can be found on Chief Marketer. Of course, you could also read the 285,000 links on Google.

Are You First In Line? Marketing during Recession

How often have you heard the question “should we increase or decrease our marketing and selling expenditures when the economy softens?” We’re in recession. The politicians may not use the word, but it’s clear that the market has slowed and growth has stalled. Today, with business orders soft for many companies, there is concern about how long the economy may be in the doldrums. The value of the dollar remains weak (and I have a trip to Paris in a month!), Bear Stearns is getting a bailout, and 8% of mortgage holders can’t make their monthly payments. Many project a protracted slowdown before a recovery. So what do you do with your marketing budget as you try to protect your profits?

You may be looking in the wrong place for the answer. The answer may well lie in the state of your balance sheet rather than your income statement. We’ve all seen it: sales are soft and in order to achieve our net profit for the fiscal year we reduce expenses. When sales soften, marketing and advertising budgets are among the first to go. It’s the easiest, least painful expense reduction in the income statement. It typically means the fewest reductions in labor costs as well. At the same time (how often have you heard this?) business leaders will say “I know I am mortgaging future sales and wish we could have kept our marketing spending at current levels. I wish we could spend even more.”

Take a look at your balance sheet. The answer to your approach to marketing and sales spending during this soft economy may be answered, in part, by the health of your overall business as indicated by your assets and liabilities, not your revenue and annual profit lines. If the economic slowdown has strained your existing capital resources and you’ve taken on additional debt burdens to fund your operations or growth plans it may make sense to hold back on marketing and sales expenses. But if you’ve been taking care of business and your balance sheet remains relatively healthy despite a near-term slowdown, and if you believe the economy will eventual begin to heal, accelerated (or at least maintaining) marketing spending may be an advisable strategy.

Why? As the market turns and returns from negative growth businesses will experience increases in orders and production requirements, inventories will build, labor requirements will begin to increase and the flow of dollars through the economy will increase. Whether your business delivers goods and/or services to consumers or businesses, those customers will begin to increase demand for your needed product. You need to be first in line when that demand occurs. You need to be positioned so that the customer reaches out to you to meet that need at the very moment that they are ready to return to the market. Be prudent, but stick with your customers through the tough times and they will stick with you through the good times.

Marketers talk of being first in “mind share”. You want to be in position to be the first among your competitors to be contacted. Better yet, you want to be in contact with your customers when they recognize their need to place an order. If you’ve taken care of your balance sheet, now may be the time to use efficient, effective marketing strategies to tighten relationships with your customers.

Are you first in line?

If this was interesting, take a look at Seth Gdin's comments about how to craft your story during a recession.

Marketing Witz: Spiral of Expectations

Marketing Witz: Spiral of Expectations

Proof of Retailer Power in Packaged Goods

Is here any doubt about how the power has shifted from manufacturer to retailer in consumer packaged goods? Just look at what happened to Cott's stock when it was reported that Wal-Mart was shifting shelf space away from it's Sam's Choice brand produced by Cott's in favor of Cadbury Schweppes beverage brands. Cott's stock dropped 20% in one day and 38% the next day when the change in shelf space was rumored. What's so striking is that the market reaction was base on the anticipated impact of a change in allocated shelf space alone, not a delisting. Smart markets, yes. Powerful retailer, absolutely.
Here's the story as reported in the Financial Post.

Marketing Strategy Must Guide Media Tactics

I was a guest speaker at class of college students in a Media course. I was speaking about the changing media environment and the challenges of measuring return on investment in both traditional and online media (note: isn't it time to stop calling online media 'non-traditional'?). It struck me as I watched the faces of these students that, as talented as they may be, how difficult (and interesting) their future careers in marketing and media will be.

"The media" is fracturing into finer and more granular targeting opportunities and tactics.
1. The media opportunites are more measurable than ever before.
2. Measuring the right thing is critical for each and every media vehicle.
3. There will be more and more data available for analysis.
4. Availability of analytical tools and resources to crunch the proliferating data will continue to increase.

This may seem overwhelming. How will marketers handle all of the potential data and information? The answer lies in staying strategic. Solid strategy will dictate what to measure and how to approach the mutlitude of media opportunities. Without solid strategy to guide decisions, the media space is a huge toolbox of tactics. Only solid strategy can define the task and guide which of these tools to use.