Advertising Metrics Must Change with Advertising Models

Marketing measurement and key marketing metrics will change dramatically over the next 5 years. A recent study on the future of advertising conducted by IBM suggests that "the next 5 years will hold more change to the advertsing world than the past 50 years." These changes wil necessitate changes in traditional marketing metrics. Impressions and reach will diminish in value as metrics while deeper individual lead relationship metrics will evolve and become more critical strategic marketing metrics. The IBM study describes this scenario:

Imagine an advertising world where ... spending on interactive, one-to-one advertising formats surpasses traditional, one-to-many advertising vehicles, and a significant share of ad space is sold through auctions and exchanges. Advertisers know who viewed and acted on an ad, and pay based on real impact rather than estimated “impressions.” Consumers self-select which ads they watch and share preferred ads with peers. User-generated advertising is as prevalent (and appealing) as agency-created spots.

Four key drivers of this change are identified as: Attention (consumer in control), Creativity (user generated), Measurement, and Ad Inventory (increased use of emerging exchanges). How is your business set to handle this change? Will you lag or lead?

Increasing Internet Marketing ROI Via Link Building

Moving from a broad strategic marketing post (see previous post) to something more tactical, do you know how strong the SEO effort is for your brand web site? I came across this web post and it is a simple overview of key issued related to link buidling for SEO. A quick read with references to other sources. Utlimately it's about increasing the ROI of your online marketing efforts.

Levitt and Drucker on Marketing - Old definitions still apply

A marketing definition that is often overlooked:
"Because its business is to find and keep customers, the business enterprise has two - and only two - basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are 'costs'." (Peter Drucker)

Theodore Levitt said it differently, but a nice comparison of the selling versus marketing.
"The difference between selling and marketing is that selling is getting rid of what you have, while marketing is having what people want." (Theodore Levitt)

As you conisder these two comments, here are two thoughts for the day to consider:
1. Are your marketing metrics and marketing efforts tied to innvoation in your origanization?
2. Does your sales team market your products by solving customer needs or are they selling your inventory?

Jet Blue Tweets Discount Air Fares - New Promotion Approach

Jet Blue and United have starting using Twitter for discount air fare promotions. This is an interesting test of an approach to generate marketing ROI from Twitter. As reported in this USA Today article, Jet Blue is sending out Tweets, typically on Mondays, announcing reduced airfares on unsold seats. The trick is that followers must react quickly to capture these discounted rates. (By the way, love the name "Cheeps" even though it may be too downscale and may cheapen the brand equity.) A recent tweet offered a $9 fare from JFK to Nantucket. It's a hihgly targeted approach to fill underutilized and expiring capacity by offering these discounts to a limited audience without widespread exposure to the rest of the market. There's always a new wrinkle for brand marketers... If you are small business, how might you use this approach to promote your brand in your local market?

Free - Digital Marketing Economics

Chris Anderson, Wired Magazine, has just published "Free: The Future of a Radical Price" suggesting that the declining cost of technology will drives digital products to be free because the marginal cost of product approached zero. The application of Moore's law, which suggests that the amount of memory delivered for a given cost will double every two years (a rough statement of the law, not a quote), to the cost of delivering digital products is one of the foundations for the suggestion that pricing will go to zero because the cost to deliver approaches zero.

It's interesting, because the cost appoaches zero but never acheives zero. Therefore, someone must still pay for the cost of delivering the product. Facebook is free, but the servers that house the data cost money. Google is free, but the it costs money to run the search bots, store and serve the data. The marginal cost of a Google search may approach zero, but it is not zero?

So what is the model? If free to oonsumers, there appear to be only one alternative - third party party payment. Third party payment to cover costs and provide profit margin can come from advertisers (the media model), or from a subset of the consuming market. This subset might be fees to subscribers for premium services. In other words, in order to be free to most a few must pay for a premium offering. A second version might be the blades/razor model, the content is free (or near free) but you must purchase the player/iPod/iPhone/Kindle. In the end, "Free" isn't really free, it's the ability to allocate product to a broad population by charging a few or charging in another manner. What do you think?

Zappos Creates Market Value in Amazon Eyes

Amazon is acquiring Zappos.com for $847 Million. With over a billion in revenue (See Forbes article) and reportedly earning $40MM, Zappos has clearly shown that there is profit is shoes. Not only profit, but equity value as well.

Where does all that value come from? Customer service. Zappos has differentiated itself among all shoe sellers by devoted, passionate, exceptional customer service. they successfully took a near-commodity product category and created brand value by differentiating themselves on service - filling a much needed gap in the online marketplace. (By the way, Amazon values customer service and has been a leader in technology solutions for serice - witness their book recommendations.) The lesson for marketers is to look for unconventional ways to differentiate the entire solution bundle (products and services), and you can create real market value.

Marketers enter the Shark Tank

Time for another reality business show. We've already seen Trump's "You're Fired" and Richard Branson gave it a show. This time it's Shark Tank, produced by Sony. Entreprenuer wannabes meet succesful entrepreneurs to pitch thier ideas. It may be entertaining, but will it paint a picture close to the reality faced by most entrepreneurs trying market their business? Here are some other blog posts about small business marketing.

Home Run Derby - a Sponsorship Payout?

Albert Pujols didn't win the Home Run Derby at the All-Star game festivities last night. The event was won by Prince Fielder of the Milwaukee Brewers, son of former major-leaguer Cecil Fielder. But the real question is, did the marketers win? Pepsi, State Farm and others were the paying sponsors. Did they generate a favorable ROI on their All-Star investment? Probably not, at least in terms of direct sales. But direct product sales was probably not the goal. Brand association with this high-energy, contemporary event (the Derby is still relatively new, and more exciting than the game itself) was the goal. In turn, this association and other sponsorships align these brands with the values of the audience. That is, they associate the brand with contemporary, high-energy, mainstream "American" events. This alignment impacts brand choice over time. This alignment impacts trade relationships as well, especially when a buyer is making a choice to promote a brand (Coke vs. Pepsi). So, Albert Pujols may not have been the big winner last night. In the end, I think the sponsors came out ahead.

Twittering for Brand Marketers

Well, it seems that it's been all Twitter in the news lately (or Michael Jackson). Brand marketers are still trying to figure out how work with Twitter. Many wonder if it's worth the effort at all. With the evolution of Web 2.0 social media tools, brand conversations are happening faster and in more places. This challenges marketers who traditionally spend time trying to manage communications rather than planning and participating in the engagement.

Here a couple of real-world things a brand marketer might try if you are still trying to dip you toe in the waters of Twitter.

1. Set up a Twitter account. (Obviously, you can try the water if you don't go to the pool.)
2. Log In, watch and listen. Then post a few messages. (Step into the shallow end.)
3. Begin to Follow others. There are several ways to do this, but two very easy methods include:
A. Use the Search tool on twitter to find people you want to follow.
B. While logged into to your Twitter account, open another window in your browser and type in www.twitter.com/username using the name of the person you want to follow. For example, to follow me, type www.twitter.com/mwitzling When you get to the Twitter page of the person just click the "Follow" button under the photo.

Don't know who to follow? For marketers, try following your competitors, key industry players, and bloggers that you like. Seth Godin is one of the more popular marketers to follow. Follow me if you like.

4. Auto Follow. You can easily set up your account Settings to automatically follow those who follow you. This helps start the potential for dialogue. Once you do this, you are ready for the main part of the pool.

This is not intended as a full training guide, just a push to help you get started. For marketers, it's very easy to move from this point to hosting your own instant "focus group" on Twitter, engage with loyal users, and track key issues.

Good luck!

Seth Godin interviewed

As a quick followup to the previous post, Seth Godin is interviewed by Thomas White on Business Matters radio show. Worth listening.

New Writing and Publsihing Models - Comment on Godin

Seth Godin recently posted a comment about the need for publishing models that allow writers to benefit from their writing. With digital publising eleminating the historical barriers of printing and publishing content, anyone today can publish their thoughts and writing. (Heck, look at this blog post itself.) For the serious "professional" writer, it now becomes more challenging to stand out from the mass of citizen writers, and even more difficult to earn a living writing in the tradtional manner. Godin posits that new publishing models will evolve to allow writers to be compensated. I suggest that new writing formats may be the solution rather than new publsiing models. Perhaps a combination of both.

For those in marketing, what are the implications? Fewer copy writers? Ability to write your own copy? More or less ways to interact and communicate your brand mesage?

No such thing as bad, as long as you can Sell

A statement made by Gill Wagner last week has been sticking in my mind. Talking about sales and marketing in the current economy, Gill said, "There's no such thing as bad, as long you can sell." Too many marketers and sales people are bemoaning the poor state of the economy, but those that keep their eye on the prize continue to do well. Is your brand strong? Is your sales team motivated? Lots of opportunity for those that are willing to push the ball forward. Agree?